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Tue 27th Jan 2015 - Marston’s reports strong festive trading
Marston’s reports strong festive trading: Marston’s has reported strong festive trading ahead of its AGM at noon today. The company said that for the 16-week period to 24 January performance has been ‘encouraging, including good trading over the Christmas and New Year period;. Profitability is in line with expectations. It added: “In Destination and Premium, like-for-like sales were 2.0% ahead of last year with both food and drink like-for-like sales growth of 2.0%. In the key two week Christmas trading period to 4 January trading was particularly strong with growth of 4.8%, including 12.5% growth on Christmas Day. Operating margins are ahead of last year and our plans to open at least 25 new-pub restaurants in the current financial year are on track, with eight openings expected in the first half. In Taverns, managed and franchise pub like-for-like sales were 2.0% ahead of last year, with 2.7% growth over the Christmas fortnight and 5.8% growth on Christmas Day. Our franchise model continues to prove successful, providing motivated licensees with local flexibility and reduced risk while improving the quality, consistency and value of the consumer offer. In Leased, profits were around 1% ahead of last year. In Brewing, performance has been strong with Group Ale volumes up 4% in the year to date, underpinned by a very strong performance in the off-trade, with volumes up 8%. Hobgoblin, our biggest brand, continues to perform well, with volumes up 10% in the year to date.” Chief executive Ralph Findlay: “We have again traded well over the Christmas period, with good sales growth over the key Christmas fortnight for the third year in succession, including serving a record 60,000 meals on Christmas Day. This performance demonstrates that our customers remain attracted to the consistency and value for money we offer, underpinned by excellent service in a high quality environment. In addition, our Beer business continues to perform well, with a particularly strong performance in the off-trade. We remain confident of achieving our expectations for the full year.” Numis Securities leisure analyst Douglas Jack issued a buy note with a 180p price target, arguing the company is “trading well in all divisions”. He said: “Q1 trading is in line, with all divisions in positive territory, even though comps were tough and should ease into H2. As a result, we are holding our forecasts, which anticipate a return to double-digit earnings growth this year, in addition to which the dividend is yielding c.5%. We forecast a return to double-digit earnings growth this year, with net debt/Ebitda falling 0.3x despite the attractive dividend, yielding c.5%. Although comps are tough in H1, they ease in H2 and the consumer backdrop is favourable, with Longview forecasting a 3.5% increase in real post-tax discretionary cash flow this year.”
Britvic reports challenging first quarter: Britvic has reported challenging trading conditions in its first twelve weeks to 21 December 2014. The company stated: “As anticipated at our prelims in November, trading in the first quarter of the FY15 financial year reflects the challenging trading conditions in our core markets. However, we remain confident of delivering Ebit in the previously stated guidance range of £164m to £173m, underpinned by our cost saving initiatives. Group revenue of £304.3m was down 0.4% on last year, driven by a marginal volume decline of 0.3% whilst ARP remained flat. GB revenue declined 1.4%, in a notably more competitive promotional environment. Following a slow start, the quarter ended with a much stronger performance during the peak Christmas trading period.” Chief executive Simon Litherland said: “Our first quarter performance reflects the guidance we gave at our preliminary results in November. Whilst we expect the trading environment to remain challenging, we have strong marketing plans and a significant innovation pipeline in place for 2015. These strong commercial plans, supported by ongoing cost benefits from our major strategic initiatives programme, mean that we remain confident of delivering further profitable growth in 2015 in line with our guidance range.”

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