Burgers, pizzas and rotisserie chicken contributed to the 3 per cent rise in like-for-like sales at pub chain Marston's (MARS), which has been working hard on its food offering in recent years. Management has been modernising the menu and tapping into the trend of open kitchens by installing pizza ovens in 60 of its pub restaurants and rotisserie ovens in 40-odd sites. Beyond this, the rise of premium drinks, which has seen punters willing to shell out a little bit more for a craft beer, also moved the dial.
Unlike some of its rivals, Marston's is likely to be less affected by upcoming government legislation allowing tenanted publicans to cut the beer tie with their parent brewery. Chief executive Ralph Findlay says the group started reforming the leased and tenanted division back in 2009, allowing pubs to adopt a franchise model where landlords earn a percentage of turnover - usually 20 per cent - and only have the cost of staff to administer. The franchise model is not captured under the new government laws.
Elsewhere, the company's acquisition of Thwaites helped adjusted operating profits in the brewing division rise by 16 per cent to £10m.
Analysts at Numis expect pre-tax profits of £99m in the year to September 2016, leading to EPS of 13.6p, up from £91.5m and 12.8p in FY2015.
| MARSTON'S (MARS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 152.6p | MARKET VALUE: | £878m | |
| TOUCH: | 152.2-152.9p | 12-MONTH HIGH: | 177p | LOW: 143p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 132p* | NET DEBT: | 167% | |
| Half-year to 2 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 401 | -27.5 | -4.2 | 2.5 |
| 2016 | 444 | 22.8 | 4.2 | 2.6 |
| % change | +11 | - | - | +4 |
Ex-div: 26 May Payment: 5 Jul *Includes intangible assets of £265m, or 46p a share | ||||
