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16/5/2018 07:41 | Langton View:MARSTON'S H1 RESULTS:Marston's has this morning reported H1 numbers to 31 March 2018 and our comments are set out below:Headline Numbers: Sales, including the impact of the Charles Wells beer & distribution acquisition, are up by 20% to £528.1m EBITDA is up by 5% to £95.0m and PBT is up by 8% to £36.3m EPS is in line with last year (on an increased number of shares) at 4.8p The interim dividend is being maintained at 2.7p. For the moment, we continue to assume a small increase to the final payment Total sales (LfLs covered below) are flat across Destination & Premium, up 2% in Taverns and up by 1.4% across Leased & Tenanted pubs. Beer Company sales are up by 29%. Total pub sales, despite the snow, are up by around £600k.Trading Destination & Premium: Total managed and franchised LfL sales are level with last year. Within this, Taverns are up by 2.9% and Destination & Premium units are down by 1.8% All of the Destination & Premium shortfall on last year is due to the snow in late February and March Margin is down by 0.7%. Of this, around 50bps is underlying (this is in line with expectations) and 20bps is due to the snow Average profit per pub was up by 1% Heavy discounting continues in the market as a whole and, though Marston's is not taking part, price rises may not be advisable in the immediate termTrading Taverns: Taverns' LfL sales are +2.9%. This represents a pickup since week 16, at which time LfL sales were up by only 2.6% Wet-led sales held up well, even during the snow. Fewer customers rely on cars & trade is a little less weather-dependentTrading Leased Pubs: Leased income is up 2% on a LfL basis. The estate is performing well. Wet sales are holding up. The LfL sales performance is in line with that at week 16Trading Beer Company: Marston's beer company has increased own-brewed beer volumes by 29%, largely on the back of the Charles Wells' acquisition Margins are lower by around 3% as Charles Wells' business operates at a lower margin with more national customers and it has more licensed brands. In addition, the enlarged distribution business operates at a lower margin. Margins should pick up in H2 Synergies are progressing as planned. The group will generate at least £4m of savings. Organic volumes are in growth. Marson's now accounts for almost a quarter of the premium cask market in the UKBalance Sheet, Cash Flow & Debt: Marston's operating cashflow is some 6% higher H1 generally sees a cash outflow (the final dividend is paid in the period etc.) and the bulk of this should reverse in H2 September 2018 debt should be only marginally higher than September 2017 Pro-forma debt to EBITDA is 4.8x. Fixed charge cover is 2.6x. Marston's pub estate has been valued at £2.1bn. A £30m impairment has passed through the P&L but, for the most part, asset values are higher. NAV is 142p per share The group has concluded its Sept 17 triennial pension review. The deficit has fallen by £10m to £40m and the £8m p.a. deficit reduction payments will remain in place for the time being. The deficit should be cleared by 2021/22. Marston's has opened 6 new pubs & bars in H1 along with 6 new lodges. For the full year, it expects to open a further 9 pubs & bars with no further lodges. Next year's opening programme may be edged back to around 10 pubs & bars with 5 new lodges expected to open The slower rate of openings will save around £25m in capex but it could lead to some minor reductions to FY19 estimatesConclusion & Outlook: Marston's has reassured that trading is in line with expectations. The snow has been little more than an irritant, but the group is considering slowing openings and husbanding its cash a little more actively going forward. The group does not comment on current trading but our understanding is that, whilst April was tough initially, when the sun shone, pubs performed very well. CEO Ralph Findlay comments 'we are pleased to report another period of good growth in revenue and underlying profit before tax.' Mr Findlay says 'strong trading in Brewing and Taverns and Leased pubs offsets the adverse impact of poor weather on 'drive-to' pubs in our Destination estate, further validating the resilience of our model.' Referring to its slightly slowing openings programme, MARS says 'we have made modest and prudent adjustments to our capital plans to reflect the current economic and consumer climate.' CEO Mr Findlay says 'Marston's is a balanced business and we are confident that the medium-term outlook for the eating-out and wet-led pub sectors remains good and that targeting an increased profitable share of a growing market through an unremitting focus on quality, service, standards and value for money remains key.'Langton Comment: Marston's has acknowledged the impact of the snow on its Destination & Premium business. It has nonetheless outperformed the market and wet-led sales have been more robust. Beer sales are strong and synergy benefits continue to be mined from the Charles Wells acquisition. The consumer is under pressure and Marston's is making a couple of defensive moves with regard to capex, new openings etc. Nonetheless, the group's shares trade at around 8x earnings and yield around 6.7%. The group has an attractive, well-managed and well-maintained estate of largely freehold properties. Food and lodging are growth businesses and Marston's shares are not trading on a demanding rating. The company, overall, is selling product that the consumer would like to buy at a price they are prepared to pay. | the deacon | |
16/5/2018 07:34 | Yes, accountancy is a topic in itself. Assets per share after re evaluation (and all of that lo)t were 142p. Think of a number etc.
Try being a RR shareholder when they account for currency hedging movements. They can, and do, show losses of billions even in a good trading year. (they lost £4.6bn in 2016) | careful | |
16/5/2018 07:28 | Like many companies they put all the good stuff in the headlines and put the less positive stuff further down.
On a statutory basis, the loss before tax was £13.4 million principally reflecting accounting adjustments relating to the estate valuation and changes in the fair value of interest rate swaps, both of which are non-cash items. The basic loss per share was 2.0 pence per share. | brwo349 | |
16/5/2018 07:22 | Results look sound. undervalued. | careful | |
16/5/2018 07:21 | I’ll have a drink to those results..cheers076; | ny boy | |
15/5/2018 10:33 | Like this, you mean?
Edit: Ah, corrected. | jeffian | |
15/5/2018 10:31 | cheers CI :)
() | septimus quaid | |
15/5/2018 10:06 | It's all looking good ! | chinese investor | |
15/5/2018 09:15 | SQ - you don't need a premium account !
(less than bracket)img src="http://uk.advfn.com/p.php?pid=staticchart&s=cpc&p=1&t=46"(greater than bracket) | chinese investor | |
14/5/2018 16:14 | This was posted by philanderer on the GNK thread (City Pubs, CPC, related business):
hmm, I was trying to post a CPC chart for comparison but think I might need premium access | septimus quaid | |
14/5/2018 14:35 | We had fish and chips at pitcher & piano at the weekend and it was tasting great, even better with 20% shareholders discount ! | spacecake | |
14/5/2018 13:07 | GNK +3% too, so not necessarily stock specific. Still, a welcome rally | the deacon | |
14/5/2018 13:01 | hoping Wednesday goes well. This is looking better. Always like to think that the rise is because the insiders know something. | careful | |
14/5/2018 12:57 | ALL GOOD ! | chinese investor | |
13/5/2018 20:02 | Just had a meal at a marstons pub/diner.not impressed with quality or service. However, it's popular with families. | hopefuldave | |
13/5/2018 12:23 | Interims on Wednesday ! | chinese investor | |
09/5/2018 07:43 | JDW update today: (Langton)JD WETHERSPOON Q3 UPDATE:JD Wetherspoon has this morning updated on trading for the 13wks to 29 April and our comments thereon are set out below:Headline Numbers: JDW reports for the 13 weeks to 29 April 2018 like-for-like sales increased by 3.5% and total sales increased by 2.8%. The group had begun the quarter at +3.8% suggesting that the run rate continued to slow. The Bank Holiday timing will have impacted this The group says year-to-date like-for-like sales have increased by 5.2% and total sales have increased by 3.8%. JDW says that 'the third quarter last year included the early May bank holiday, but the third quarter this year did not, which is likely to have reduced like-for-like sales by about 0.5% in the period.'More on Trading, new openings etc.: JDW reports 'since the start of the financial year, the Company has opened 5 new pubs and sold 19.' It says 'we intend to open one further pub in the current financial year. The Company believes the market value of our pub estate remains comfortably above the net book value.' JDW comments that it 'has spent £15.4m on buying the freeholds of pubs of which we were previously tenants and has bought back £51.6m of shares in the financial year to date.' The group reports 'the Company remains in a sound financial position. The net debt at the end of the quarter was £754m and is expected to be around £740m at the end of the financial year.'Outlook & current trading: JDW chairman Tim Martin says he believes the UK should leave the EU Customs Union Re trading, Mr Martin comments 'as anticipated, the rate of like for like sales growth slowed slightly in the third quarter.' He says 'we continue to face significant cost increases in the second half in areas which include labour, business rates and the sugar tax.' JDW says 'there is also some uncertainty as to the effect on sales of the FIFA World Cup.' It nonetheless concludes 'we continue to anticipate a trading outcome for this financial year in line with our previous expectations.'Langton View: JD Wetherspoon has reported that trading remains in line with expectations. Trading has, as expected, slowed a little. The group is uncertain as to the impact of the World Cup and it (in common with the industry) faces rising costs. The group's shares have given back a little ground recently despite upgrades following the H1 numbers. Langton suggested taking profits but, at these lower levels, the shares once again offer value. Openings remain at relatively low levels. JDW remains a good operator and we believe that the group's competitors may be feeling the pinch a little more acutely than JDW itself. However, the group does not operate in a vacuum and, if competitors continue to cut prices and offer deals, it could be impacted. | the deacon | |
08/5/2018 10:19 | Great Bank Holiday weather ! | chinese investor | |
04/5/2018 11:15 | Half year results 16th May 2018 What joy awaits us then I wonder - weather (the beast) will no doubt get a mention, sales decline or growth ? | spacecake | |
04/5/2018 10:14 | Liberum - buy. target 130p | the deacon | |
24/4/2018 13:36 | Some thirsty drinkers about, it’s going to 120p short term imho | ny boy | |
20/4/2018 18:34 | It was MARS & WTB last week, the amount of debt currently held is toxic to any future merger possibilities IMHO. | spacecake | |