...in the shape of Britvic (BVIC) & Marston's (MARS) who have both reported updates via an IMS and an AGM respectively.
Britvic suggested a continuation of challenging trading conditions in their core markets which they had alluded to in their previous update in November last year. Despite this they say they are still confident of delivering EBIT in the previously stated guidance range of £164m to £173m, underpinned by cost saving initiatives. I last wrote about this one back in October last year when the shake out in the market at that time had, I suggested, left it looking better value and that it was a reasonably defensive play at around 600 pence.
After today's update the shares seem to have taken the statement quite well, so may be something worse was expected so they are perhaps having a relief rally. This leaves them up by about 5% at pixel time to around 680 pence. So with the final dividend that went xd in December they have given a decent 15% or so return since the low in October - sweet, like some of their drinks. Talking of which I saw the other day they are going to stop making their full sugar Robinson's. This seems to be part of a relaunch aimed at addressing the obvious health concerns about sugary drinks.
Overall this leaves it looking fair value on around 14x & 3.5% yield now based on this years forecasts and a EBIT/EV yield of just over 7%. This puts it in the second quartile of the Compound Income Scores with most items looking fairly average, although it was looking oversold before today so maybe hence the pop. Thus probably a hold for me here rather than a buy now.
Meanwhile Marston's the brewing and pub company reported some good trading over the Christmas period in it AGM, with profitability in line with their expectations. 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 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. While in leased pubs, profits were around 1% ahead of last year. Finally 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%.
This one has had a less fizzy share price than Britvic over the last couple of years as it has flat lined around the 140 to 150 pence region. This is as they struggled to progress earnings, although now for the next couple of years ahead they are forecast to see these rise by around 8% per annum. This feeds into expected dividend growth of around 5% per annum for the next couple of years too.
It therefore looks cheapish on 11.6x and 4.8% yield on this years forecasts but overall it does not score well on my scores ranking in the bottom decile due to its poor cover, finances and earnings revisions scores, where despite encouraging statements there have been downgrades since November. Thus it does not really pass my usual quality tests and as such I would not recommend it other than for the yield and some asset backing from their properties, although clearly there will be plenty more higher scoring candidates out there, cheers.