Marston’s (LON:MARS) Issues Earnings Results

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

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 Trading Down 3.5%

Shares of Marston’s stock opened at GBX 45.37 on Wednesday. Marston’s has a 1 year low of GBX 35.88 and a 1 year high of GBX 69.20. The company has a market capitalization of £287.12 million, a P/E ratio of 4.09, a PEG ratio of -0.16 and a beta of 0.91. The company’s fifty day moving average is GBX 53.68 and its two-hundred day moving average is GBX 56.20. The company has a debt-to-equity ratio of 157.01, a quick ratio of 0.23 and a current ratio of 0.31.

Analyst Upgrades and Downgrades

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

About Marston’s

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.