It’s not a fun time to be a UK pubs and dining stock, with a coalition of the sector’s owners recently urging Chancellor Philip Hammond to take measures to ease the ‘crisis in the hospitality and the high street’. Looking at Marston’s 2018 chart and you get a taste of what’s been going on.
Following on from an even tougher 2017, one that left the stock at a starting price of £1.13, the company has been unable to stall the decline that began back in 2016. Things got so bad that by early September it had found itself at 89.7p, its worst level in more than 6 and a half years. It has bounced back a bit since then, if only slightly, with Marston’s PLC now at a current trading price of £1.00.
The firm’s last update came near the end of July, and did nothing to prevent its slide to those aforementioned September lows. Yet the statement itself wasn’t half bad. For the 42 weeks to 21st July, total managed and franchised pub sales rose 5.2%, with like-for-like sales rising 0.3%. As for the most recent 16 week third quarter period, the World Cup and warm weather helped like-for-likes jump 0.9% despite the negative impact of the football on food-led pubs, but with ‘some offset from poor weather in April’. Remove April and the 12 week period that followed actually saw LFLs up a more than healthy 2.0%.
In terms of Wednesday’s year-end statement, investors will want confirmation that the company is on track to meet its underlying earnings expectations as promised in July. They’ll also be after a further improvement from the food-led Destination and Premium division, where like-for-likes were down 1.5% for the 42 week period against the 1.8% drop seen at the half year point, that slight increase coming despite the negative impact of the World Cup.
Marston’s Plc (LON:MARS) has a consensus rating of ‘Hold’ alongside an average target price of £1.17.
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