Marston’s recommended as a ‘buy’ despite a slowdown in second half sales

As Marston’s updates the market Ian Forrest, investment research analyst at The Share Centre, explains what it means for investors.

“This morning, Marston’s confirmed a slowdown in its second-half sales growth, but reassured the market that underlying operating profits will be broadly in line with expectations. In a trading update ahead of final results in November, the group also announced that like-for-like sales at its destination and premium pubs grew by 3.1%, with food sales up 3.3% and drinks up 2%. The pub estate continued to grow with 27 new pub-restaurants added this year, with another 25 planned for next year.

“No reason was given for the slowdown in sales by the company, but it may have been partly due to unusually poor weather in August. The steady opening of new pubs and accommodation means the group should continue to benefit from improving consumer sentiment in the UK. With the proceeds of pub disposals being recycled into higher-margin businesses, a strong management track record and good dividend yield, we continue to recommend Marston’s as a ‘buy’ for income-seeking investors.”