Marston's (MARS) full-year figures were significantly overshadowed by news that it's selling 202 less profitable pubs to NewRiver Retail (NRR) for £90m - the cash will repay £80m of debt and should cut the annual interest bill by £6.7m. The move reflects Marston's strategic preference for more profitable new-build pubs and management plans to increase expansion here to 25-30 new sites a year.
Operationally, second half like-for-like sales at the destination and premium estate reached 4.1 per cent - helped by the food offering. That off-set a poor first half to deliver 2.2 per cent underlying sales growth for the year at this segment and, accordingly, the profit margin here rose 18.6 per cent to 20.1 per cent, with the underlying operating profit having increased 24 per cent to £70.3m. Although underlying operating profit at the tenanted operations fell 7.7 per cent. The brewing side, meanwhile, saw revenue rise by 12 per cent to £127m - but greater volumes of lower margin off-site trade meant that the operating profit here rose just 3 per cent to £16.9m.
The disposal led JP Morgan Cazenove to cut its 2014 earnings estimate by about 8 per cent - pre-tax profit of £86.1m is now expected, giving EPS of 11.9p (from £88.4m/12.3p in 2013).
MARSTON'S (MARS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 142.5p | MARKET VALUE: | £816m | |
| TOUCH: | 142.5-142.7p | 12-MONTH HIGH: | 166p | LOW: 117p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 147p* | NET DEBT: | 141% | |
| Year to 5 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 645 | 21.4 | 3.90 | 7.10 |
| 2010 | 651 | 52.5 | 8.30 | 5.80 |
| 2011 | 682 | 80.8 | 12.1 | 5.80 |
| 2012 | 720 | -135 | -19.4 | 6.10 |
| 2013 | 783 | 69.8 | 10.3 | 6.40 |
| % change | +9 | - | - | +5 |
Ex-div: 18 Dec Payment: 3 Feb *Includes intangible assets of £248m, or 43p a share | ||||
