Marston’s (MARS) chief executive, Ralph Findlay, reckons that February's cold snap knocked £3m off half-year profits. This seems to be the fallback position for any underperformance on the part of the pubcos at the moment, but we think the two percentage point contraction in the underlying operating margin has less to do with Jack Frost than costs linked to tenancy to franchise conversions, along with lower-margin assets brought in with the acquisition of Charles Wells Beer Business (CWBB).
Snow obsessions aside, underlying trading, though mixed, gives cause for optimism. Like-for-like sales at taverns were up 2.9 per cent during the first half, compared with a 1.8 per cent decline in destination and premium pubs. The beer business remained resilient, with an added boost from CWBB, bringing sales in brewing up 79.2 per cent to £169m. Total volumes sold improved by 74 per cent, with market share growth of nearly a quarter each in both premium cask ale and packaged ale. The acquisition doubled the size of the export business, now around 8 per cent of total volumes.
Analysts at Numis expect pre-tax profits of £107m in the year to September, giving EPS of 13.8p, compared with £100m and 14p in FY2017.
| MARSTON'S (MARS) | ||||
| ORD PRICE: | 105p | MARKET VALUE: | £666m | |
| TOUCH: | 104.9-105.2p | 12-MONTH HIGH: | 146p | LOW: 96p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 142p* | NET DEBT: | 155% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 452 | 36.7 | 5.2 | 2.7 |
| 2018 | 529 | -13.4 | -2.0 | 2.7 |
| % change | +17 | - | - | - |
| Ex-div: | 24 May | |||
| Payment: | 03 Jul | |||
| *Includes intangible assets of £298m, or 47p per share | ||||
