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MARSTON’S VISIT TO NEW BUILD PUBS, LODGE ETC.: Introduction: • Marston’s has been building new pubs since its 2009 Rights Issue. More than 200 have now been constructed. Locations have been specifically chosen, layouts (south-facing beer gardens, play areas etc.) have been tailored to the retailer’s needs and there is no tail. Lodges have recently been a feature and are expected to be allocated more funds going forward. Trading, capital spending etc.: • At its H1 numbers last month, Marston’s indicated that it would scale back its new openings programme. The group points out that: • The market has been very difficult to read over recent months. Varied weather, an early Easter, sunny Bank Holidays and now the World Cup have meant that comparables have, well, not been very comparable. • Economic indicators are mixed. Retail sales are poor but real wages are now back in growth. A degree of caution may be called for before committing funds. • The ‘car-crash’ in casual dining has yet to work through. More sites may become available and supply may be reduced. • Marston’s has been adding to its land bank and has the capital, the sites and the people to step up its opening programme quickly if circumstances warrant it. • Re discounting, Marston’s maintains that this is endemic and is a reaction to oversupply. Marston’s makes selective offers (often via in-pub table talkers) but does not voucher in the way that the casual diners do. For permanent discounters, it is hard to see a road back. • Customers are loyal only to the discount and it is not possible to give discounts only to wavering would-be customers. All customers may avail themselves of vouchers and margins will suffer. • An alternative to price cutting, Marston’s maintains, is better service, a more pleasant ambience, interesting buildings etc. New Build Pubs: • These should be built to the operator’s specifications re location, size, layout etc. • Marston’s has built over 200 new pubs since 2009. Over 60% of its Destination pubs are less than 10yrs old. Where freehold, these have generated a ‘double digit return’ on capital. It is hard to dispute the group’s claim that this has represented a better use of capital than would have a major acquisition such as Orchid or Spirit. • Freeholds are typically funded and built from Marston’s own resources. A number of freeholds have then been sold and leased back over a 30-40yr period at rents below 4%. There are no covenants. • As regards trading, Marston’s maintains that the food market is reasonably strong, but competition is intense. Themes (if one is to avoid discounting) include premiumisation, convenience and provenance. Venue ‘character’ and the price sensitivity of its patrons tend to be inversely correlated.

http://investors.nationalgrid.com/results-and-events/results-centre#2018

http://webcast.instinctif.tv/886-1178-19760/en

Agreed Fairdealer. Thirdman, I'd recommended all here listen to yesterday's webcast from RF and AA presenting the results. Comprehensive coverage, and the Q&A at the end is interesting.

Marston�s shares have fallen a little on today�s news. � New information comprised the held dividend and the reduced capex next year. The latter could lead to some small downgrades, but it will also reduce debt. � The final dividend could yet be raised and, with real wages in positive territory and LfL sales up (ex the snow) across the company, trading is solid. � Marston�s shares trade at around 7.5x earnings and yield around 7.2%. � The group has an attractive, well-managed and well-maintained estate of largely freehold properties. Wet led units are currently performing well and lodging is a major growth segment. � The company continues to sell product that the consumer would like to buy at a price he/she is prepared to pay. Leisure remains a growth industry and, certainly over the medium term, the group should perform well.

From their email this AM: MARSTON�S H1 RESULTS: Following the release of its H1 numbers this morning, Marston�s hosted a meeting for analysts and our comments are set out below: Trading � historic: � The group maintains that it has produced good results against a backdrop (snow, sunshine, early Easter, late May Bank Holiday) that has been hard to read. � Turnover has been �strong� and the beer business has been �excellent�. Some 90% of MARS� beer now does not go to MARS pubs. � Brewing margin is (and will be) down due to lower margin Charles Wells� business. LfL margins are up across the division � Taverns were good. � Average profit per pub has risen by 52% over the last 6yrs. This reflects the impact of churn. Marston�s does not have a significant tail. � Drive to pubs (Destination & Premium) lost around 1.5ppts in growth due to the snow � Accommodation has been very good. A lodge adds perhaps �300k to a pub�s turnover & smooths this over day parts. Trading & market - outlook: � Revenue and profits for the full year will be higher. There are more shares in issue. Current forecasts have EPS up a little with a marginal rise in the dividend to 7.6p. � The half year dividend was unchanged, and a full year increase is not an absolute certainty � The market is tough, but the consumer is still spending. Supply is down in wet led (which is helpful) but is rising (albeit more slowly) in food � Discounting is �embedded and endemic�. It is not worse than it was around 6mths ago but �is not sustainable�. � Marston�s discounts only very selectively and has focused instead on quality & service in order to drive footfall. � The group focuses on cash margin per visit � as this can be most easily correlated to the cost of providing the service. � The World Cup is a Curate�s Egg. Net, net the impact should be positive. The fall of the England matches (Mon & Thurs) will be helpful but the Sunday lunch match will not be. � There are some hopeful signs. Real wage growth is positive & unemployment is at 45yr lows. Balance Sheet, Cash Flow & Debt: � MARS will open 5-10 lodges p.a. for the foreseeable future. � Capex will be slowed but the landbank will continue to build. When / if MARS decides to step up its opening programme, it will be able to do so. Returns on build are still in the 11% to 13% range � Conversions away from the 2-for-1 format will continue. Langton Comment: � Marston�s shares have fallen a little on today�s news. � New information comprised the held dividend and the reduced capex next year. The latter could lead to some small downgrades, but it will also reduce deb

Wouldn't worry too much.... The country will probably drink its way through it....

The CFO was clear in the webcast this morning (recording available on website) - dividend policy over medium term unchanged. 2 x cover and progressive dividend. Was also clear that no concerns re balance sheet. Much is 2019 'slowdown' is to see what happens re consumer outlook. The Q&A session with analysts is on the webcast too - so many of our concerns here are discussed.

Link to RF presenting today's interims: http://webcast.instinctif.tv/886-1178-19760/en

MAB numbers weren't great. No real guidance on dividend, and margins really being squeezed with discounting getting deeper and deeper. Quite happy with MARS interims today. Added this morning.

• 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.

• 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 estimates Conclusion & 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 defe

From ADVFN: 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 term Trading – 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-dependent Trading – 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 16 Trading – 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 UK Balance 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 hig

April Coffer Peach Tracker shows LfL sales down 1.2% with an early Easter negating the positive impact of mid-month sunshine • Coffer Peach says ‘Britain’s managed pub and restaurant groups saw sales slip in April.’ It says the ‘earlier Easter holidays [which boosted March numbers – that weren’t actually that good] seen as the main factor. • March was actually down 3.1%. It was impacted by the Beast from the East but nonetheless stole Easter from April • Re April, CGA comments ‘Easter, which is always a busy time for the eating and drinking out market, last year fell in mid-April, while this time it straddled March and April. This will certainly have had an effect on sales comparisons, and looks like to have outweighed the boost to trade that the hot-spell at the end of the month will have brought to the pub sector, in particular.’ • Mid April saw temperatures in the middle 20s but this did not rescue the month. • April Tracker shows London fared better than the rest of Britain. April was +0.2% with the rest of the country down 1.6% • Managed pubs & restaurants performed similarly with the former down 1.2% and the latter down 1.1%. • CGA says ‘the only good news is that April trading was much better than the disastrous, snow-hit trading seen in March, when sector like-for-like sales tumbled 3.1%.’ • David Coffer says ‘the results reflect the general feeling of political and economic uncertainty translating into a stay at home mentality. We believe, however, the recent change in the weather and the ‘royal wedding feel good factor’ will lift the mood nationally and hopefully lead into a stronger summer.’ This is a hope rather than a forecast as the NIESR and others are saying that the economy is only growing at around 0.1% per quarter at present.

Power supplier National Grid (LSE: NG) has been a firm favourite among income investors for good reason. Based on analyst expectations for the new financial year, the stock yields a whopping 5.8%. As a comparison, that’s well over four times what you’d get from the top instant access cash ISA right now. Nevertheless, the threat of a Jeremy Corbyn-led renationalisation of utilities, ongoing tensions with Ofgem and the rise in interest rates have hit sentiment towards the stock. Priced just under 1,100p each last May, the shares fell to a low of around 740p back in February, only to recover slightly in recent weeks. Considering that the firm’s latest update contained little in the way of shocks, recent negative sentiment feels overdone. Full-year underlying earnings before interest and tax (EBIT) is now likely to be “in line with expectations” even if headline group EBIT is forecast to be lower due to major storms in the US and remediation costs of roughly £140m. On a positive note, some of this will be offset by changes to US tax law, meaning that the company will pay a lower corporate tax rate than before. It may not be the FTSE 100 bargain of the year but a price-to-earnings (P/E) of 14 for next year suggests the shares look decent value at the current time.

Should read across largely to MARS one would expect

Cont... GNK concludes ‘with our high quality portfolio of pubs, excellent team, strong balance sheet and sustainable dividend, we remain well placed to withstand the external market challenges and deliver long-term value to our shareholders.’ • Langton Comment: Greene King has reassured on 2018 but 2019 may be tough. • There are no comments today (and perhaps none were to be expected) on margins, debt or dividend. • We believe GNK will hold or perhaps marginally increase its dividend in order to maintain its sterling record in that regard. However, with profits down some 11%, there may be some concerns here going forward. • The weather has been unhelpful for 6mths or so. • But GNK has been able to confirm that the bottom has not fallen out of its world. This is reassuring to say the least. • Spirit was an ambitious acquisition. The group’s shares have not performed well since the purchase. Certainly other pub companies have also experienced tough conditions and GNK is addressing its issues re Fayre and Square but the SPRT purchase may, with hindsight, not have been the best of ideas. • Uncertainty is unavoidable and this will extend to 2019 forecasts. These may be trimmed back. • GNK is prima facie cheap at these levels. It is one of the UK’s better-positioned pub companies and, with its shares now trading at a single-digit multiple, this may be an attractive entry point. • However, the direction of travel is negative and the group has to execute on its strategy. There have been some signs of indigestion recently and cautionary comments may put off would-be buyers in the short term.

From ADVFN (Langton Capital view) • Greene King has this morning updated on trading for the first 49wks of its current financial year being the period to the 8th April 2018 and our comments are set out below: • Headline numbers: • Greene King reports that it expects PBT in the year to end-April to be in the region of £240m to £245m. This is broadly in line with market estimates • Greene King reports managed sales in the 49wks to 8 April were down by 1.8% on the same period last year. • GNK says Pub Partners’ net revenue for the first 48wks of the year was down 0.3% on last year • Brewing & Brands sales volumes were down by 0.7% (against an ale market thought to be down around 3.1%) • Managed pubs: • GNK says ‘the weather over the last 12 weeks impacted trading, particularly in our destination food-led pubs, and on an underlying basis, excluding the impact of snow, LFL sales in the year-to-date were -1.2%.’ • The 49wk period represents a slowdown on the 37wk period. Certainly 2018 does include the snow but it has Easter in it too, which was not the case for the first 49wks of 2017 • As this is only a trading update, there is no comment on margins. • GNK says that food took the hit with ‘both drink and accommodation LFL sales were ahead of last year.’ • The company adds ‘trading over Easter was strong with LFL sales up 2.8% against the Easter weekend last year, helped by strong sporting fixtures, especially football and boxing.’ • GNK says that investment is paying off ‘despite the continued challenging market backdrop.’ • Momentum is clearly negative and, while 2018 numbers (though recently reduced) would appear to be in the bag, 2019 could be tough • GNK says ‘we continue to reposition Pub Company to drive growth going forward; we will complete the exit from Fayre & Square by the financial year end; we opened nine new pubs over the year; and we invested core and brand conversion capex in 292 pubs.’ • Other trading data: • GNK says ‘after 48 weeks, LFL net profit in Pub Partners was -0.3% while own-brewed volumes in Brewing & Brands were -0.7%, ahead of the UK ale market at -3.1%.’ • Both number represent a slowdown on week 37 data • GNK adds ‘we remain on track to deliver targeted cost savings of £40-45m, we will have spent c. £160m in the full year in ensuring our estate remains well invested and our disposal proceeds are likely to be ahead of expectations at c. £120m following the sale of three high value leasehold pubs.’ • Overall, Greene King reports it expects profit before tax and exceptionals to be ‘in the range of £240-245m.’ • GNK concludes ‘with our high quality portfolio of pubs, excellent team, strong

Cont.... This economic dataset continues to support our central investment themes. We continue to favour supermarkets, where the market expands faster than additional capacity. It will be interesting to see how sales values hold up now that inflation appears to have peaked. We continue to favour pure-play clothing retailers and the BRC data highlights that non-food online continues to gain share at pace. "In non-food offline we continue to believe that this requires selectivity in investment decisions and we continue to favour good discount and credible self-help stories but the casualty list has lengthened materially in CY2018 as cost pressures, including business rates, and channel shift continue to take their toll. We are encouraged that living standards are stabilising as real wages are likely to grow ahead of inflation, although our euphoria is tempered by the potential prospect of a May interest rate rise."

ShareCast News) - There was mixed news for retailers, pubs and restaurants on Tuesday as encouraging high street research was published by the British Retail Consortium but spending data from Barclaycard painted a more gloomy picture. The BRC-KPMG report showed UK retail sales increased 1.4% in March on a like-for-like basis, improving from 0.6% in February and above the consensus expectation for a 0.1% decline. Year-over-year growth in total sales rose to 2.3%, from 1.6%. Analysts highlighted that the comparatives from March 2017 were relatively soft, with total sales falling 0.2% and LFL sales were down 1.0%. Over the three months to March in-store sales of non-food items fell 3.0% and 4.0% on a like-for-like basis. On a 12-month basis, the total decline was 2.2%. Food sales increased 4.2% in the three-month period on a like-for-like basis and 5.3% on a total basis, which was the strongest since July 2009. Barclays meanwhile showed consumer spending growth slowed well below the three-month average to 2.0% in March from 3.8% in February, well below the three-month average of 3.2%. The heavy snow in the month led to in-store spending growth falling to -1.9% in March, the slowest rate of growth in almost six years. Online growth remained strong at 11.7% versus a three-month average of 12.0%, with online channels accounting for 30.0% of spending. March was also one of the weakest months for pubs & restaurants, the Barclaycard data showed. "On a short-term basis, this poor performance could create negative reactions in share prices of the pubs stocks as they update the market on trading," Barclays analysts said. But they stressed this did not change their fundamental view on any stock, with a preference still for names where greater balance sheet strength is perceived, namely JD Wetherspoon and Greene King, rather than Marston's and Mitchells and Butlers. Analyst Clive Black at Shore Capital said the BRC data supported his positive stance on supermarket groups, though he noted that the comparatives from March last year were relatively soft. "Clearly the early Easter falling into March this year positively impacted sales which made up for the unseasonal weather earlier in the month. The growth in retail sales during March was despite the difficult weather at the start of the month, and again in the middle of March around St Patrick's Day." He added that the data on in-store sales highlighted the further channel shift to online but this was exacerbated as thebad weather dissuaded would-be shoppers from venturing out onto the UK high streets. "This economic dataset continues to support our central investment themes. We continue to favour supermarkets, where the market expands faster than additional capacity. It will be interesting to see how sales values hold up now that inflation appears to have peaked. We continue to favour pure-play clothing retailers and the BRC data highlights