Marston’s (LON:MARS) Issues Earnings Results

Marston’s (LON:MARS) announced its earnings results on Tuesday. The company reported GBX 2.30 EPS for the quarter, Digital Look Earnings reports. Marston’s had a return on equity of 9.75% and a net margin of 7.97%.The business had revenue of £422.70 million during the quarter.

Here are the key takeaways from Marston’s’ conference call:

• Marston’s said it had a strong first half, with underlying profit before tax up 7.9% to £20.5 million and EBITDA margin expanding to 20.3%, despite cost headwinds and temporary pub closures.
• The company’s new pub formats are performing well, with 60 conversions completed in H1 versus a plan of 50 and post-opening like-for-like sales growth of around 20%. Management said the rollout is now a major growth engine and will accelerate further.
• H1 revenue was down 1.1% year-on-year to £422.7 million, partly because of closure periods related to the format program, but management expects those headwinds to reverse in H2 as all 91 new-format pubs are now open.
• Management reiterated confidence in delivering over £50 million of recurring free cash flow for the full year and said leverage has improved to 4.7x, with the company on track to move toward around 4x by year-end.
• Looking ahead, Marston’s expects like-for-like sales growth in H2 supported by the World Cup, stronger trading from the new formats, and further margin expansion from productivity gains and good cost visibility.

Marston’s Price Performance

Shares of LON MARS opened at GBX 46.20 on Thursday. The firm has a 50-day simple moving average of GBX 53.43 and a 200-day simple moving average of GBX 56.20. The stock has a market capitalization of £292.39 million, a price-to-earnings ratio of 4.16, a price-to-earnings-growth ratio of -0.16 and a beta of 0.91. The company has a quick ratio of 0.23, a current ratio of 0.31 and a debt-to-equity ratio of 157.01. Marston’s has a 52 week low of GBX 35.88 and a 52 week high of GBX 69.20.

Analyst Ratings Changes

A number of brokerages have commented on MARS. Shore Capital Group reissued a “buy” rating on shares of Marston’s in a report on Wednesday, January 28th. JPMorgan Chase & Co. reduced their target price on Marston’s from GBX 85 to GBX 81 and set an “overweight” rating for the company in a report on Tuesday, April 28th. Four analysts have rated the stock with a Buy rating, According to MarketBeat.com, Marston’s presently has a consensus rating of “Buy” and an average price target of GBX 78.67.

Marston’s Company Profile

Marston’s PLC operates managed, franchised, tenanted, partnership, and leased pubs in the United Kingdom. It is also involved in the property management; telecommunications; and insurance businesses. The company was formerly known as The Wolverhampton & Dudley Breweries PLC and changed its name to Marston’s PLC in January 2007. The company was founded in 1834 and is based in Wolverhampton, the United Kingdom.