A leading analyst has forecast that full-year group revenue at Marston’s will have increased 4.8% with the top end of its retail division being the major driving factor (+7.9%).
Geof Collyer at Deutsche Bank said: “We expect brewing to grow its sales by c2%, helped by a robust +6.0% own-brewed volumes, and Tenancies & Leases revenues to remain flat yoy. We expect flat EBITA margins yoy and forecast FY’13 group EBITA to grow c5% and EPS to grow +1.5%. Dividend at the interim results was up 4.5% and we expect it to be up 5% for the full year as well.”
Across its Destination & Premium pubs (68% of managed pubs), the company reported lfls of +2.2% helped by robust lfl food sales +3.7%. For Other Retail pubs (remaining 32%) the lfls was flat.
Collyer said: “We are forecasting divisional revenue of £438m (+7.9%) and EBITA of £80m (+8.3%) with margins just a little ahead of last year (DBE +5bps margins). Tenancies & leases: We forecast -0.7% EBITA growth with a modest 43bps decline in margins. Brewing: We expect a small 5bps of margin expansion and forecast EBITA of £16.8m (+2.4% over FY’12). Once we have two full years of the new divisional split, we will adjust our model.
“Consensus is revised down 2% for FY’14 since trading update. Although the consensus has fallen by c. 2% and 4% for FY’14 and FY’15 respectively since the year end trading update. The result will be closely watched for management’s expectations on FY’14 as they have already guided for accelerated disposals in FY’14 to boost the new build programme. We believe the stock (+3.9% since trading update) could take a hit again if the consensus is revised further downwards to adjust for more disposals. Marston’s, on 12.4x EV/EBITA, still looks expensive relative to the other pub groups. Hold.”
