Marston’s – Dividend Increase

Marston's

Marston’s Brewery is a legacy share that I’ve held for around ten years. It’s one of those random ones, where I think I sold the shares, forgot about them going ex-div and then I ended up with a really small number of shares that it would cost a lot to sell, so I may as well just leave them in my account and hope that a dividend increase every year will be forthcoming!

Anyway, Marston’s recently gave their shareholders a dividend increase. Their full year dividend was increased by 4.9% on the 27th of November, so I can’t complain! Not a huge growth rate, but if it’s above inflation, then I’m happy. Inflation is currently around 2%, so yippee for Marston’s increase being more than double that. I am all for dividend increases, as long as the company can afford them, age not crazily geared, and are they are consistently profitable, etc.

Unfortunately, there are some legislative issues happening in the UK right now, which could have major ramifications for people owning shares like Marston’s, Enterprise Inns, Greene King, and so on. About a week before Marston’s announcement, British MPs voted to end the ‘beer tie’ arrangements. This is an old piece of legislation that meant pub landlords would be tied in to a certain brewery’s products, and have to pay super high prices for them, but in return get dirt cheap rent on the premises. What this means in practice is that if you were to set up your own pub as a tied in tenant, it’d cost you around £20,000, but you’d earn only about £10,000-£15,000 salary, which is pretty low. If you set up an independent pub, it’d cost you more like £250k, but you’d be able to pay yourself a higher salary, as your beer prices would be up to 70% cheaper.

So, since the vote went through parliament, brewery shares plummeted, but I’m interested to know what you think might happen over the longer term? This might mean independent breweries or craft beer producers get a huge boost…

Do YOU have any ‘random’ or ‘legacy’ holdings in your investment accounts? What are you going to do with them? What about owning shares in the leisure/retail/brewing sectors, any thoughts on those?

Let me know, leave me a comment 🙂

4 Comments

  1. I just got a few shares of HYH after a KMB spin off earlier this year. For now I plan to keep them in my account but they do not pay any dividends which is kind of a downer. Other spin offs I received pay out dividends and I plan to keep them in my portfolio. Those companies are ALLE, ABBV and MDLZ. For now I have no plans to sell HYH so I guess they’ll sit around for the foreseeable future.

    1. Hey DH, thanks for stopping by.

      What do you think you’ll do with HYH in future? I mean, if they increase substantially, you can always sell them at a decent profit. I am stuck with these tiny legacy shares which I can’t sell, but it’s unlikely I’ll ever want to buy more of their shares… so I guess they are just kind of hanging around! Obviously, I’d prefer to swap the money into something else… it should be working hard for me, no matter if it’s only a small amount!

      Cheers 🙂

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