Marston's (MARS) AI Stock Analysis

• Market Cap: £231.53M
• Dividend Yield: N/A
• Average Volume (3M): 1.15M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.50
• Revenue Growth: 3.02%
• EPS Growth: 29.25%
• Country: UK
• Employees: 10,000
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Restaurants
• EPS (TTM): -0.01
• Shares Outstanding: 634,275,450
• 10 Day Avg. Volume: 1,066,789
• 30 Day Avg. Volume: 1,146,306
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.26
• Price to Cash Flow (P/CF): 0.90
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 44.00p
• Price Target Upside: 20.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Marston's overall score reflects a mix of strengths and challenges. Key strengths include strong cash flow management and positive corporate events, such as robust festive sales and strategic shareholder support. However, the ongoing net losses, high debt leverage, and weak technical indicators constrain the score. Improving profitability and reducing leverage would be crucial to elevate the company's financial health and investor appeal.

Positive Factors

Debt Reduction

The sale of the brewery joint venture has led to an increased focus as a pure-play pub operator and material debt reduction.

Trading Momentum

The upbeat statement shows trading momentum has continued into the current financial year.

Negative Factors

Debt and Cash Flow

The main issue remains the quantum of debt (£884m) and that bond amortisation payments will soak up the majority of the new £50m free cash flow per annum target.

Dividend Limitations

Limited scope for a dividend is expected due to the focus on debt reduction and bond amortisation payments.

Marston's Business Overview & Revenue Model

Company Description

Marston's PLC operates managed, franchised, tenanted, and leased pubs, bars, restaurants, and accommodations in the United Kingdom and internationally. The company operates through approximately 1,500 bars and pubs; and approximately 1,836 rooms. It is also involved in the property management; telecommunications; and insurance businesses. The company was formerly known as The Wolverhampton & Dudley Breweries PLC and changed its name to Marston's PLC in January 2007. The company was founded in 1834 and is based in Wolverhampton, the United Kingdom.

How the Company Makes Money

Marston's makes money primarily through its extensive portfolio of pubs and bars where it generates revenue from the sale of food and beverages. The company also earns income from its brewing operations by producing and distributing a range of beers and ales to both its own pubs and third-party venues. Additionally, Marston's engages in leasing and franchising arrangements, where they receive rental income and franchise fees from pub operators. Significant partnerships with other brewers and brands enhance its distribution capabilities and portfolio offerings, contributing to its earnings. The company's business model is further supported by strategic property management and development, optimizing the use of its real estate assets.

Marston's Financial Statement Overview

Summary

Marston's shows positive revenue growth and strong cash management, but persistent net losses and high leverage impact financial stability. Improving profitability remains crucial.

Income Statement

Marston's shows a positive trend in revenue growth with a 3% increase from 2023 to 2024, indicating recovery post-COVID-19 disruptions. However, the company struggles with profitability, reflected in consistent net losses and negative net profit margins over recent years. The gross profit margin is healthy at approximately 54% in 2024, but net income remains a concern, affecting bottom-line performance.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio of 1.99 in 2024, indicating significant reliance on debt financing. Despite this, the company maintains a stable equity base, with an equity ratio of 29.6%. The return on equity is negative due to net losses, suggesting inefficiencies in utilizing shareholder funds for generating profits.

Cash Flow

Cash flow from operations has strengthened significantly, with a notable increase in free cash flow from 2023 to 2024. The operating cash flow to net income ratio is robust, indicating strong cash generation capability relative to reported losses. This positions Marston's well for managing liquidity and funding obligations despite ongoing net losses.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
893.40M	898.60M	872.30M	799.60M	401.70M	515.50M
	Gross Profit
150.40M	489.10M	435.70M	335.40M	74.20M	160.20M
	EBIT
116.90M	151.70M	100.10M	105.80M	-52.50M	20.90M
	EBITDA
175.40M	166.20M	115.30M	296.20M	-34.20M	-250.70M
	Net Income Common Stockholders
-17.10M	-18.50M	-9.30M	137.20M	-127.70M	-359.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
28.40M	45.50M	29.60M	30.70M	35.40M	42.60M
	Total Assets
2.41B	2.21B	2.45B	2.52B	2.47B	2.53B
	Total Debt
1.56B	1.30B	1.60B	1.62B	1.64B	1.68B
	Net Debt
1.54B	1.26B	1.57B	1.60B	1.61B	1.64B
	Total Liabilities
1.81B	1.56B	1.81B	1.87B	2.06B	2.28B
	Stockholders Equity
601.50M	654.80M	640.10M	648.10M	406.40M	248.90M
Cash Flow		Free Cash Flow
66.90M	161.20M	75.90M	-14.60M	-107.70M	3.30M
	Operating Cash Flow
113.00M	207.40M	141.20M	55.50M	-61.10M	67.00M
	Investing Cash Flow
-5.60M	211.90M	-9.80M	-29.10M	197.70M	13.90M
	Financing Cash Flow
-101.60M	-401.40M	-132.60M	-30.90M	-145.10M	-77.80M

Marston's Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 36.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:MARS, the sentiment is Neutral. The current price of 36.6 is above the 20-day moving average (MA) of 35.14, below the 50-day MA of 38.30, and below the 200-day MA of 39.72, indicating a neutral trend. The MACD of -0.72 indicates Negative momentum. The RSI at 52.86 is Neutral, neither overbought nor oversold. The STOCH value of 90.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:MARS.

Marston's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CPG	74 Outperform	£43.31B	39.28	21.72%	1.86%	6.81%	-14.09%
MAB	66 Neutral	£1.44B	9.73	6.35%	―	4.27%	―
JDW	64 Neutral	£683.62M	11.86	16.38%	1.94%	3.70%	57.10%
YNGN	61 Neutral	£441.80M	25.19	1.81%	4.15%	16.73%	-55.22%
Sector *	60 Neutral	$7.23B	11.55	3.67%	4.04%	2.96%	-13.54%
MARS	59 Neutral	£231.53M	―	2.70%	―	3.02%	29.25%

Marston's Corporate Events

Marston’s PLC Announces Total Voting Rights Update

Marston’s PLC has announced its total voting rights as of April 1, 2025, in compliance with the Disclosure Guidance and Transparency Rules. The company has 660,362,194 issued ordinary shares, with 26,086,755 held in treasury, resulting in a maximum of 187,111,255 voting rights. Additionally, it has 75,000 preference shares with 300,000 voting rights. This information is crucial for shareholders to determine their notification requirements under the DTR.

Marston’s PLC Boosts Employee Share Trust with New Purchase

Marston’s PLC has announced the purchase of 506,505 ordinary shares by Computershare Trustees (Jersey) Limited for the Marston’s PLC Employee Benefit Trust. This acquisition, executed over three days in March 2025, is intended to benefit the company’s employees by satisfying share options, including those for Persons Discharging Managerial Responsibility. The transaction increases the EBT’s holdings to 1,681,540 shares, representing 0.265% of Marston’s total issued share capital, potentially enhancing employee engagement and aligning their interests with the company’s performance.

Marston’s PLC Expands Employee Benefit Trust Holdings

Marston’s PLC announced that Computershare Trustees (Jersey) Limited, acting as Trustee of The Marston’s PLC Employee Benefit Trust, purchased 287,566 ordinary shares on 12 and 13 March 2025. These shares, held in a discretionary trust, will be used to satisfy employee share options, including those for Persons Discharging Managerial Responsibility. This purchase brings the total shares held by the EBT to 1,254,101, representing 0.198% of the company’s issued share capital.

Marston’s CFO Hayleigh Lupino to Depart by October 2025

Marston’s PLC announced the departure of its Chief Financial Officer, Hayleigh Lupino, who will remain in her role until October 2025 to ensure a smooth transition. The company is actively seeking her successor, and her departure marks a significant change as she played a crucial role in the company’s transformation into a pure-play hospitality business.

Marston’s PLC Announces Change in Voting Rights Structure

Marston’s PLC has announced a change in its voting rights structure following an acquisition or disposal by Sona Asset Management (UK) LLP, which now holds 5.08% of the voting rights through financial instruments. This development may impact Marston’s governance and strategic decisions, reflecting a significant stake held by a single asset management firm, potentially influencing the company’s future direction.

Marston’s PLC Successfully Passes All Resolutions at AGM

Marston’s PLC announced that all resolutions proposed at its Annual General Meeting on January 21, 2025, were passed. The resolutions, which included routine and special matters such as electing board members and authorizing share allotments, demonstrate strong shareholder support for the company’s strategic decisions. This successful AGM highlights Marston’s stable governance and operational strategies, reinforcing its position in the market and potentially providing confidence to stakeholders.

Marston’s Reports Robust Festive Sales Growth in Latest Trading Update

Marston’s PLC, a prominent local pub group, reported a strong trading performance for the 16-week period ending January 18, 2025, particularly during the festive season. The company’s overall retail sales grew by 3.0% due to an increase in food and drink sales, while like-for-like sales were up by 2.0%, despite adverse weather conditions in November and January. During the festive period, sales surged by 11.1%, with a record-breaking performance on Christmas Day. The CEO, Justin Platt, expressed optimism for the year ahead, attributing the success to a refocused strategy aimed at driving revenue growth through event-driven marketing and innovative pub formats. Marston’s remains on track to meet FY25 market expectations, reflecting its solid market position.