Leading analyst Douglas Jack, of Peel Hunt, has said that Marston’s strength lies in the management knowing exactly where the company’s growth is coming from.

He said confidence was building around the group and as a result raised his target price to 140p.

He said: “Marston’s has a wide range of profit streams, most of which are stable and cash generative. It is also managing is costs well, and, after an acquisition and a 36% increase in capex in 2017, has a sound foundation to generate circa 10% profit before tax growth in 2018E.

“Net debt/Ebitda remained at 6.0 times in 2017 on a pro forma basis (adjusting for acquisition timing).

“The £60m increase in net debt (despite a positive working capital movement) is not going to convince non-holders that the dividend is not being paid through higher debt.

“However, we do forecast net debt/Ebitda to fall to 5.7 times in 2018E, and believe expansion should continue provided that the return on investment on freeholds remains at 13% to 15%. Christmas bookings are in line, but we believe the outcome is likely to be better than that due to Christmas/New Year’s Day moving from a Sunday (last year) to a Monday, bringing the equivalent of an extra Saturday.

“The timing of the England matches at the World Cup could also not be much better, particularly the 7pm kick-offs on the Monday and Thursday nights, and the draw could lead to a long run in the tournament. This should be most beneficial to wet-led and town-centre pubs/bars.”

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