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MARS Marston's Plc

28.25
-0.65 (-2.25%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Marston's Plc LSE:MARS London Ordinary Share GB00B1JQDM80 ORD 7.375P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.65 -2.25% 28.25 28.30 28.45 29.30 28.20 28.70 2,226,821 16:35:25
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Malt Beverages 885.4M -9.3M -0.0147 -19.35 180.42M

Marston's PLC Preliminary Results -3-

27/11/2014 7:00am

UK Regulatory


Marston's (LSE:MARS)
Historical Stock Chart


From Mar 2019 to Mar 2024

Click Here for more Marston

Like-for-like wet sales increased by 2.0%, outperforming the UK on-trade drinks market. We continue to see growth in more premium products, with premium cask ale volumes up 8% and premium lager up 16%.

We achieved a 0.1% improvement in underlying operating margin through moderate price increases and tight cost control.

Taverns

Total underlying revenue decreased by 10.2% to GBP225.1 million, principally reflecting the impact of the significant disposal activity described above, and consequently underlying operating profit was GBP55.7 million. The quality of the remaining pub estate has improved significantly with average profit per pub up 4%.

In our managed and franchised pubs like-for-like sales were up 2.1% on last year and operating profits were up 5.7%, reflecting the continued success of pubs operating under the franchise model.

Operating margin was 3.0% below last year at 24.7%, primarily due to the conversion of pubs from tenanted to franchised models. These agreements generate increased profit but the operating margin percentage is reduced as a consequence of accounting for sales at full retail value.

Leased

Total underlying revenue decreased by 4.5% to GBP53.1 million, principally reflecting significant disposals and the non-recurrence of the 53(rd) trading week. Underlying operating profit of GBP23.5 million was down on last year. The performance of the core estate was strong with like-for-like earnings growth of 3%. Average profit per pub increased by 2% to GBP68,000, and licensee stability remained at over 90%.

As with tenanted pubs, underlying measures of lessee 'health', including rent alleviations, improved during the financial year. Underlying operating margin of 44.3% was down 2.5%.

Brewing

Total underlying revenue increased by 4.1% to GBP132.5 million. Underlying operating profit increased by 3.0% to GBP17.4 million.

Overall ale volumes were in line with last year, with premium ale volumes up 4% and bottled ale volumes up 6%. Hobgoblin, our largest brand, continues to grow with sales up 4% on last year. We have maintained our position as 'category market leader' in both the premium bottled ale and premium cask ale markets.

In the independent free trade, our account base increased to more than 4,150 customers, and premium ale sales to this sector increased by 14%. In the take home market we continue to perform very strongly with volumes up 4%.

Underlying operating margin was slightly down versus last year at 13.1%.

Capital expenditure and disposals

Capital expenditure was GBP142.6 million in 2014 (2013: GBP150.8 million), including the construction of 27 pub-restaurants. We expect that capital expenditure will be around GBP150 million in 2015, including around GBP80 million for the construction of at least 25 pub- restaurants.

During the year we generated GBP143.6 million of cash from the sale of 388 pubs and other assets.

Financing

At 4 October 2014 the Group had a GBP257.5 million bank facility to November 2018, and the amount drawn down at 4 October 2014 was GBP212 million. This facility, together with a long-term securitisation of approximately GBP0.9 billion and the lease financing arrangements described below provides us with an appropriate level of financing headroom for the medium term. The Group has sufficient headroom on both the banking and securitisation covenants and also has flexibility to transfer pubs between the banking and securitisation groups.

The Group has entered into a number of lease financing arrangements which have a total value of GBP158.1 million as at 4 October 2014. This financing is a form of sale and leaseback agreement whereby the freehold reverts to the Group at the end of the term at nil cost, consistent with our preference for predominantly freehold asset tenure. The agreements range from 35 to 40 years and provide the Group with an extended debt maturity profile at attractive rates of interest. Unlike a traditional sale and leaseback, the associated liability is recognised as debt on the balance sheet due to the reversion of the freehold.

Net debt before lease financing of GBP1,040 million at 4 October 2014 is a decrease of GBP42 million compared to GBP1,082 million at 5 October 2013 partially reflecting the repurchase of the AB1 notes in the securitisation. Operating cashflow of GBP127.8 million was below last year principally due to the impact of the disposal activity in the year and an adverse movement in working capital in the period, which is principally in relation to creditors.

For the period ended 4 October 2014 the ratio of net debt before lease financing to underlying EBITDA was 5.4 times (2013: 5.3 times). It remains our intention to reduce this ratio to below 5.0 times, principally through EBITDA growth generated from our new-build investment programme.

Pensions

Our final salary pension scheme at the year end showed a surplus of GBP7.8 million before tax (2013: GBP5.1 million deficit). This position reflects the consistent manner in which the Group has proactively managed its deficit over the last five years, and the closure of the final salary scheme to future accrual from 30 September 2014. The triennial valuation of the scheme was due on 30 September 2014 and we expect to report on this at our 2015 Interim Results.

Taxation

The underlying rate of taxation of 19.6% in 2014 is below the standard rate of corporation tax of 22% due to a combination of: prior year adjustments, the benefit of indexation allowance in deferred tax on property and the lower deferred tax rate of 20%.

The underlying tax rate has decreased by 1.1% from 20.7% in 2013.

Non-underlying items

There is a net non-underlying charge of GBP117.4 million after tax of which circa GBP100 million is non-cash. The net charge includes a loss on disposal of GBP35.8 million in respect of the portfolio sale of 202 pubs together with a GBP1.9 million loss in respect of the ongoing management of these pubs. GBP37.5 million of revaluation surpluses from the portfolio sale were transferred from the revaluation reserve to retained earnings upon disposal. In addition there is a charge of GBP50.6 million relating to non-core estate disposal and reorganisation costs from the restructuring of our operations across the Group, a charge of GBP29.5 million relating to the recognition of onerous lease provisions and associated leasehold impairments, a charge of GBP27.2 million relating to the buyback of securitised debt and a loss of GBP8.2 million in respect of the mark-to-market movement in the fair value of certain interest rate swaps. These charges are offset by a credit of GBP10.8 million in respect of the closure of the defined benefit pension plan, a GBP0.2 million reduction in the interest accrued in respect of the Rank case and a credit of GBP24.8 million relating to the tax on non-underlying items.

As a consequence, there is a statutory loss for the year of GBP50.7 million, and loss of 8.9 pence per share.

GROUP INCOME STATEMENT

For the 52 weeks ended 4 October 2014

 
                                                                                         2013 
                                                   2014                                (Restated) 
                                                        Non-                                  Non- 
                                    Underlying    underlying              Underlying    underlying 
                                         items         items      Total        items         items      Total 
                                          GBPm          GBPm       GBPm         GBPm          GBPm       GBPm 
--------------------------  -----  -----------  ------------  ---------  -----------  ------------  --------- 
 Revenue                                 787.6          27.7      815.3        782.9            .-      782.9 
 Operating expenses*                   (631.5)       (134.7)    (766.2)      (614.7)        (21.6)    (636.3) 
---------------------------------  -----------  ------------  ---------  -----------  ------------  --------- 
 Operating profit                        156.1       (107.0)       49.1        168.2        (21.6)      146.6 
---------------------------------  -----------  ------------  ---------  -----------  ------------  --------- 
 Finance costs                          (73.4)        (27.0)    (100.4)       (83.8)         (0.5)     (84.3) 
 Finance income                            0.3            .-        0.3          1.7            .-        1.7 
 Movement in fair 
  value of interest 
  rate swaps                                .-         (8.2)      (8.2)           .-           3.5        3.5 
---------------------------------  -----------  ------------  ---------  -----------  ------------  --------- 
 Net finance costs                      (73.1)        (35.2)    (108.3)       (82.1)           3.0     (79.1) 
                                                                                                    --------- 
 Profit/(loss) before 
  taxation                                83.0       (142.2)     (59.2)         86.1        (18.6)       67.5 
 Taxation                               (16.3)          24.8        8.5       (17.8)           7.2     (10.6) 
---------------------------------  -----------  ------------  ---------  -----------  ------------  --------- 
 Profit/(loss) for 
  the period attributable 
  to equity shareholders                  66.7       (117.4)     (50.7)         68.3        (11.4)       56.9 
---------------------------------  -----------  ------------  ---------  -----------  ------------  --------- 
 
 
   (Loss)/earnings per 
   share: 
 Basic (loss)/earnings 
  per share                                                      (8.9)p                                 10.0p 
 Basic underlying 
  earnings per share                                              11.7p                                 12.0p 
 Diluted (loss)/earnings 
  per share                                                      (8.9)p                                  9.9p 

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