Marston’s (LON:MARS) Issues Quarterly Earnings Results

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

MARS traded down GBX 3 on Tuesday, hitting GBX 47.80. 3,854,803 shares of the stock were exchanged, compared to its average volume of 4,128,704. Marston’s has a 12 month low of GBX 35.88 and a 12 month high of GBX 69.20. The business has a 50-day moving average of GBX 53.94 and a two-hundred day moving average of GBX 56.19. The company has a debt-to-equity ratio of 157.01, a current ratio of 0.31 and a quick ratio of 0.23. The firm has a market capitalization of £302.51 million, a price-to-earnings ratio of 4.31, a PEG ratio of -0.16 and a beta of 0.91.

Analyst Upgrades and Downgrades

Several analysts have issued reports on MARS shares. Shore Capital Group reaffirmed a “buy” rating on shares of Marston’s in a research report on Wednesday, January 28th. JPMorgan Chase & Co. decreased their price objective on shares of Marston’s from GBX 85 to GBX 81 and set an “overweight” rating on the stock in a report on Tuesday, April 28th. Four equities research analysts have rated the stock with a Buy rating, According to MarketBeat.com, Marston’s has a consensus rating of “Buy” and a consensus 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.