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16 May 2023
MARSTON'S PLC
RESULTS FOR THE 26 WEEKS ENDED 1 APRIL 2023
CONTINUED STRATEGIC MOMENTUM: REVENUE AND OPERATING PROFIT GROWTH, POSITIVE CASH FLOW AND CONTINUED DEBT REDUCTION
Marston's, a leading UK operator of 1,440 pubs, today announces its Interim Results for the 26 weeks ended 1 April 2023.
Underlying*
Total*
2023
2022
2023
2022
Total revenue
£407.0m
£369.7m
£407.0m
£369.7m
Pub operating profit
£43.1m
£39.9m
£43.1m
£45.9m
Income/(loss) from associates
£2.2m
£(2.0)m
£2.2m
£(2.0)m
Profit/(loss) before Tax
£(3.6)m
£(7.5)m
£(38.1)m**
£25.6m
Net profit/(loss)
£(2.9)m
£(6.1)m
£(28.8)m
£19.4m
Earnings/(loss) per share
(0.5)p
(1.0)p
(4.5)p
3.1p
Net cash inflow/(outflow)
£11.5m
£(8.9)m
NAV per share
£0.98
£0.71
* All activities relate to continuing operations
**Includes a £34.5 million net loss in respect of interest rate swap movements; a partial reversal of the £109.2 million net gain reported in FY2022
Revenue and pub operating profit growth, despite macroeconomic environment
· H1 like-for-like sales up 10.7% vs last year and up 17.9% vs FY2020
· Drink sales continue to perform well and food sales were encouraging, demonstrating the trading resilience of the Group's predominantly community pub estate
· Increase in pub operating profit: £43.1 million (H1 FY2022: £39.9 million); due to the seasonal nature of the business, the majority of profit is typically earned in H2
· Improved share of CMBC's profits: £2.2 million (H1 FY2022: loss of £(2.0) million)
Positive cash generation, debt reduction, continued NAV momentum and extension of bank funding
· Operating cash inflow of £69.9 million (H1 FY2022: £30.2 million) and net cash inflow for the period of £11.5 million (H1 FY2022: outflow of £8.9 million)
· Continued progress with debt reduction strategy: net debt excluding IFRS 16 lease liabilities reduced by £12.1 million to £1,204.1 million (FY2022: £1,216.2 million)
· Net asset value (NAV) per share of £0.98 (H1 FY2022: £0.71)
· £24.3 million generated from non-core strategic disposals to date at 39% ahead of net book value, with disposals totalling £50-60 million anticipated in FY2023
· Successfully secured amendment and extension of banking facilities totalling £340 million, comprising £300 million RCF and £40 million private placement
· 63% of the £65 million capital expenditure earmarked for FY2023 invested in H1, thereby maximising the benefit in H2
Continued evolution of pub portfolio
· Well-positioned, predominantly freehold pub estate, with limited exposure to city centres and community pubs continuing to benefit from consumer lifestyle changes
· Simplified estate categorisatio
Great results and they unchanged the market clearly no interest, they should be better on this update
The results are not "great", they are OK.
And poor vs other pub chains that have swung back into actual profit. Marston's is still loss making (even though the loss is clearly smaller) in spite of all covid restrictions having been lifted nearly 6 months before that financial year.
Yes, markets have no interest, cannot hold 36p atm.. awful performance BODs and CEO
I'd want sales up 20% at least. I read the results as disappointing considering the headwinds of inflation, interest rates, rail strikes and rising wages, taxes and supplier costs. As someone said compared to other pub chains the results are poor and need to get that debt down quick.
MARS and MAB look like a binary bet on if there is a consumer downturn or not. I think there will be given inflation and fiscal drag and am short MAB. LFL sales aren't keeping pace with food inflation (highest of the lot) so are down in real terms.
I probably wouldn't go as far as shorting it as summer is indeed an enormous contributor to profit, but the case isn't clearly bullish anymore. It's just mediocre IMO.
Agreed that these results are reasonable, but not great.
Positives for me were:
-£12m debt reduction (any reduction welcome but still a long way to go with overall debt at £1.2bn!)
-trading period does NOT include easter or the May bank holidays which seem to have traded well
-board report comment that most of profit is generated in H2 augers well to next trading update, which based on 2022 announcement should be around end July
The RNS does mention a bit about Easter and May BH but still not good enough. If you want exposure to this sector, probably better prospects with Fullers, Youngs or Mitchell & Butlers. Check out their updates and compare.
How is M&B any better? Stands to be a victim of the 'squeezed middle' and the debt position is argubly worse. They report tomorrow so we'll soon see...
F15jcm :"How is M&B any better? "
So M&B results much better received and Jefferies raises Mitchells & Butlers to 'buy' (hold) - price target 270 (170) pence
Anyway, as I said before, read through all results carefully.
I think my post re other pub companies a few weeks back has now been justified. MAB.L have done very well. Their prospects are good and FSTA will catch them up over next year. Both far better value than MARS.
I was at Lord's last week where Marston's have a partnership with England Cricket board. It was clear that everyone was avoiding the Pedigree, Hobgoblin and Banks and paying more per pint (and walking further) to get the independent craft ale. BTW I tried the three Marston's ales that some of our group had mistakenly bought and OMG it was shockingly bad. The craft ale was so much better and needless to say, all of our group were on the craft after 11am.