I bought into these in December last year, primarily for the yield, but also for the potential growth of one of the better companies in their sector.


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Marston's Fundamentals (MARS)

I bought them late on @143p

Oh good, I was very surprised to see them down so much not only because they do seem to be doing things right but with the festive season coming up as well.

I sold some of my long term holding in September @164.28 - so reasonably happy - time will tell.

JP Morgan Cazenove Neutral 143.70 143.70 140.00 160.00 Reiterates

N+1 Singer Buy 0.00 150.30 157.00 163.00 Reiterates

Jefferies International Buy 144.95 145.20 155.00 180.00 Upgrades

WH Ireland Securities Buy 154.00 154.00 - - Upgrades

Numis Buy 155.45 153.50 185.00 185.00 Retains

AGM & Interim management Statement

Trading
Our performance in the financial year to date has been encouraging, including good trading over the Christmas and New Year period. Profitability is in line with our expectations.

In Destination and Premium, like-for-like sales were 4.1% ahead of last year including like-for-like food sales growth of 5.6% and wet like-for-like sales growth of 2.2%. In the key three week Christmas trading period to 4 January trading was strong with growth of 3.3%, following 5.8% growth in the corresponding period last year. Operating margins are slightly ahead of last year and our accelerated plans for 25-30 of our new-pub restaurants in the current financial year are on track, with eleven openings expected in the first half.

In Taverns, managed and franchise pub like-for-like sales were 3.0% ahead of last year, with strong Christmas and New Year trading. Our franchise model continues to prove successful, providing motivated licensees with local flexibility while improving the quality, consistency and value of the consumer offer, and reducing risk for the licensee.

In Leased, profits are estimated to be around 1% ahead of last year.

In Brewing, although volumes are just below last year continued growth in premium ales has benefited operating margins, resulting in profits being slightly ahead.

Net debt and cash flow are in line with our expectations.

We will announce our Interim Results for the 26 weeks to 5 April 2014 on 15th May 2014.

Commenting, Ralph Findlay, Chief Executive, said:
"We traded well over the Christmas period as customers responded to our excellent value festive offers, with 55,000 meals served on Christmas Day - a record. Our performance in the first quarter has been good and, encouragingly, we have achieved growth in each of our key trading divisions. We continue to strive to ensure that our pubs and beers meet the high standards our customers expect and provide outstanding value for money."

Beer: The women taking over the world of brewing

The number of professional women brewers is on the rise in the UK and they are becoming increasingly influential, according to leading industry figures. Why?

Jane Austen brewed beer when she wasn't busy writing novels.

Men dominate brewing now and the industry has had something of a beard-and-cardigan image, but in Austen's day it was part of her household duties and had been women's work for thousands of years.

But female brewers, or brewsters as they are traditionally known, are said to be on the rise again and are being credited with helping reinvigorate the beer industry.

There is no official figure for how many women currently brew professionally but you don't have to look hard to find them.

A woman is the most influential brewer in the country, according to industry figures. Emma Gilleland is head of supply chain at Marston's, the UK's leading independent brewer. It produces over 60 ales from five breweries and she is responsible for the quality of every single pint.

JP Morgan Cazenove Neutral 0.00 149.70 160.00 180.00 Reiterates

Deutsche Bank Hold 148.40 147.80 135.00 170.00 Reiterates

Interim Results

ROWTH IN REVENUE AND EARNINGS SUPPORTS INCREASE IN DIVIDEND


FINANCIAL HIGHLIGHTS
· Underlying Group revenue up 4.5% to £374.3 million.
· Underlying profit before tax up 9.4% to £29.0 million.
· Underlying earnings per share up 10.8% to 4.1 pence per share.
· Interim dividend up 4.3% to 2.4 pence per share.

OPERATING HIGHLIGHTS
· Destination and Premium: Like-for-like sales up 5.7%, operating profit up 18.2%.
· Taverns: Managed and franchised like-for-like sales up 3.8%, core estate in profit growth.
· Leased: Like-for-like profits up 3.0%.
· Brewing: Revenue up 3.5%, operating profit up 4.0%.

STRATEGY HIGHLIGHTS
· New-build development: On target for at least 27 new pubs this financial year.
· Franchise expansion: 65 pubs converted in first half.
· Disposal of smaller wet-led pubs: 286 properties sold for £116 million.
· Market leader in premium ale: Premium ale volumes up 2%.

CURRENT TRADING - 5 WEEKS TO 10 MAY
· Destination and Premium: Like-for-like sales up 4.1%.
· Taverns: Managed and franchised like-for-like sales up 3.0%.
· Leased: Like-for-like profits estimated to be up 5%.
· Own-brewed volumes up 6%.

Commenting, Ralph Findlay, Chief Executive, said:
"The first half year was good and current trading is strong. We are creating a higher quality pub estate which is delivering positive trading momentum and meets the expectations of today's customers. We opened 11 new pub-restaurants in the first half and remain on track to open at least 27 in total this year. Our 100th new pub built since 2009 will open this summer, with 5,000 jobs having been created.

We are beginning to see some evidence of consumer confidence returning in the regions, leaving us confident of making positive progress for the remainder of the year."

Numis Buy 152.30 150.00 185.00 185.00 Retains

N+1 Singer Buy 152.30 150.00 - 163.00 Reiterates

SHARE TIPS FROM INVESTORS CHRONICLE

Harriet Russell
A far-sighted growth strategy that Marston's (MARS) put in place in the wake of the credit crunch in 2009 looks set to step up a gear, providing the prospects of substantial profit and dividend growth from 2015 and beyond along with the potential for broker upgrades, if recent strong half-year results are anything to go by. However, priced at just 10 times forecast earnings and promising a yield of over 4 per cent, the shares do not seem to be taking full account of the impressive outlook for income and growth.

While a recent slew of sales of non-core pubs is expected to result in flat earnings this year, the move provides the opportunity to significantly boost returns by focusing the pub group on its strongly performing managed estate and its innovative franchise pubs. Indeed, the plan is for 85 per cent of profits to be generated from such pubs in coming years.

According to chief executive Ralph Findlay, Marston’s success in rejuvenating its estate since the credit crunch can be attributed to paying close attention to the changing nature of the British consumer. He calls it the 'F-Plan': focusing on families, females, forty-somethings and - most importantly - food. Traditionally, pubs focused on drinks sales because it was a higher-margin business. But Mr Findlay says that has changed. Britain’s average consumer, he says, is looking for the most "bang for their buck" and wants food to play a part in weekly trips to the pub. Mr Findlay also points out many household spending decisions are made by females and described them as a ‘prime customer target’. Much of the pub sector is now slowly catching on to this trend, but Marston's has a head start on its rivals.


Marston's seemed to realise the pub landscape and the clientele was changing as early as 2009. Since then, the group has built over 100 'family-friendly' pubs, investing more than £250m in new sites. And prescience of the move was illustrated last year by the British Beer & Pub Association’s annual pub-running guide entitled which found that pubs with higher dry sales (food) are now better able to boost profitability, as food margins now range from 56 to 61 per cent, compared to drinks margins ranging from 49 to 54 per cent. What's more, the same report showed the highest level of gross profit was achieved by rural-destination pubs and food-led pubs, which are a particular focus for Marston's. Its estate is mostly regional and underlying operating profit at its destination and premium sites - including branded Pitcher & Piano chain - grew 18 per cent in the first half of 2014. This was down to an increased spend per head as well as more customers.

The strong contribution from these 356 managed pubs, accounting for almost two-fifths of underlying profit, helped the group to beat most brokers' forecasts in the first six months of the financial year. Underlying revenue was up 4.5 per and underlying EPS rose 11 per cent to 4.1p, but forecasts have not been upgraded for now. The ongoing conversion of tenanted pubs to the group's innovative franchise model (currently accounting for 545 of the group's 1,078 'Tavern' pubs) has also helped overall performance and has helped limit risks.

However, Marston’s - along with much of the sector - carries a hefty debt pile and has made reducing it a major strategic objective. The medium-term target is to bring the ratio of debt to cash profits down to 5 times and the ongoing disposal programme, which generated £116m in the first half, will help. Importantly, though, expansion plans are also still high on the agenda. The 2009 new-build programme doesn’t look set to slow: this year the group is on track to open 27 new family-focused pub restaurants, 11 of which already opened their doors in the first half.

Share tip summary

It’ll be a fine balance, Mr Findlay admits, between paying down debt and building new pubs, but as consumer confidence returns, Marston's should be well-positioned to achieve growth. Given its increasingly attractive expansion strategy, a hearty yield, forecasts of double-digit EPS growth in both 2015 and 2016 (13 per cent and 12 per cent respectively), and the potential for upgrades, the shares are a buy priced at just 12 times 2014 forecast earnings dropping to 11 in 2015. Buy.

Last IC view: Buy, 143p, 29 Nov 2013

Deutsche Bank Hold 151.15 150.80 170.00 170.00 Reiterates

The Capital Group Companies, Inc. > 4%

Interim Management Statement

Trading
We have continued to make good progress in line with our expectations. The impact of the World Cup was broadly neutral, with higher drinks sales offset by weaker food performance in our pubs, and strong sales growth in the off-trade.

In Destination and Premium, like-for-like sales for the 41 week period were 4.1% ahead of last year, including like-for-like food sales growth of 4.2% and like-for-like wet sales growth of 3.5%. Operating margin is slightly above last year and we remain on track to complete 27 new-build pub restaurants in the current financial year.

In Taverns, like-for-like sales for the 41 week period were 3.0% ahead of last year. Our franchise business continues to perform strongly and now operates in around 550 pubs.

In Leased, like-for-like profits for the 41 week period are estimated to be up 3% compared to last year.

In Brewing, own-brewed beer volumes were up around 1% compared to last year including 10% growth in off-trade volumes during the World Cup.

Net debt and cash flow are in line with expectations.

Commenting, Ralph Findlay, Chief Executive Officer said:
"We have continued to make good progress in implementing our strategic priorities with our focus on investment in new pub-restaurants, the expansion of franchise and the continued development of our premium beer portfolio all contributing to our growth targets. We remain confident of achieving our expectations for the full year."

Forthcoming Events
Please find below the forthcoming reporting dates for the Group, which are also available on the investor calendar on our website, www.marstons.co.uk/investors

Year-end trading statement
8 October 2014
2014 Preliminary results
27 November 2014
2015 Interim results
14 May 2015
2015 Preliminary results
26 November 2015

N+1 Singer Buy 144.50 144.20 163.00 163.00 Reiterates

Numis Buy 143.25 144.20 185.00 185.00 Retains

Why are pub stocks plummeting?