Marston’s is delivering on all aspects of the growth plan that was forged during the previous recession. So with half-year underlying profits up 15 per cent year-on-year, management has kick-started dividend growth – which adds to the allure of the shares’ substantial yield.
Management confidence was boosted by several successes. With 25 new openings expected this year, the managed pub new-build programme helped produce 6.8 per cent divisional profit growth, to £28.3m, while cost controls boosted operating margins by 30 basis points to 14.9 per cent. Meanwhile, the tenanted division grew profits 3.1 per cent to £39.8m, reflecting the conversion of 419 pubs to an innovative franchise model – this 600-strong group of pubs experienced a 13.5 per cent profit uplift. Meanwhile, the growing popularity of premium beer helped brewing revenues rise 6.6 per cent and profits here increased 2.7 per cent to £7.5m.
Group like-for-like growth held strong in the first nine weeks of the second half, too – impressive given that fine weather and the Royal Wedding significantly boosted 2011's comparative trade.
Broker Peel Hunt forecast full-year pre-tax profit of £86.5m, giving EPS of 12.2p (2011: £80.4m/11.1p).
| MARSTON'S (MARS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 99p | MARKET VALUE: | £565m | |
| TOUCH: | 99-100p | 12-MONTH HIGH: | 112p | LOW: 83p |
| DIVIDEND YIELD: | 6.0% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 141p* | NET DEBT: | 139% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 318 | 35.6 | 5.3 | 2.1 |
| 2012 | 342 | 25.2 | 4.1 | 2.2 |
| % change | +8 | -29 | -23 | +5 |
Ex-div: 30 May Payment: 2 Jul *Includes intangible assets of £249m, or 44p per share | ||||
