The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Fairdealer - the calculation of the NAV takes all mortgages, charges and other agreements into account under standard reporting rules. So the Carlsberg "shackles" are taken into account in the NAV.
Likewise, you appear to claim that the Welsh estate has been misreported. What evidence do you have of that?
"You have commented on the declined offer made by Platinum in 2021. That offer was 107p at the 3 rd time and not put to SH's until completely declined by Ralph Findlay."
- It was turned down because it was deemed not to value the company adequately (as stated officially). Yet Platinum still made that offer in the first place, after placing two earlier (lower) offers, so they too clearly agreed that the business was at least worth that in spite of the above-mentioned "shackles".
The market not being confident about the company at present is an indicator of sentiment, it is not hard evidence of the company's health and NAV.
And this is where a takeover would be highly interesting for the company's new owners: if a consortium of parties that together don't need to borrow a substantial amount of money to pay off a large chunk of Marston's debt gets the business, then by indeed making that payment (or part-payment) of the debt, they would then enormously boost its profitability, especially in a period of high interest rates. As interest rates are getting increasingly likely to come down (albeit slowly probably) this year, it makes sense to buy the company sooner rather than later (so long as no money needs to be borrowed for that purchase of course).
Lejjb,thanks for the invitation. RNS invariably tend to provide only the good bits. One needs to dig into the small print.
For instance read the JV agreement with Carlsberg, it may open your eyes! Marstons are shackled to Carlsberg. Any potential suitor will do due diligence and discover any purchase of the property estate comes with conditions Carlsberg must agree.
The Brains estate of some 100 pubs are leased on a management agreement over 25 years. The returns on these pubs is a little opaque as incorporated with Marstons Welsh estate. In the prevailing economic climate the value of the Brain's estate is below the value at the beginning of the Lease agreement. It should also be noted, Brains sold the Freeholds of their estate to Song Capital in 2022. Song Capital will look towards extracting best value from the asset. This could involve restructuring of the Management Agreement.
You have commented on the declined offer made by Platinum in 2021. That offer was 107p at the 3 rd time and not put to SH's until completely declined by Ralph Findlay.
""So a high NAV means a business is comfortably solvent and can comfortably cover its debts""
Mmm the SP has been lingering in the low 30's for a very long time. The market must have doubts regarding such a large discount to asset value!!
Suggest the Director's Going Concern, statement is read, it is carefully crafted in a way that leaves doubts in their minds.
The best hope here is Jason Platt who officially begins a rejuvenation of the Company this week, is able to create the Shareholder value we all want/need.
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And the last officially reported NAV (about 18 months ago IIRC?) was 98p per share. That does not at all factor in the value of Marston’s as going concern.
The SP is just below 34p as of Friday 5/1/24 COB.
Fairdealer - some of my response is in my reply to barchid. For the rest, I invite you to read all the RNSs since Spring 2020 and the Times article(s) from that year as well as the news of the rejected T/O offers of Q1 2021.
Barchid - assuming you are referring to this, https://www.voxmarkets.co.uk/articles/will-this-unloved-sector-perform-like-house-builders-did--907da66/ ,
unfortunately you have demonstrated that you listened to only one half of the material and publicly reported/ commented on the other half.
Key points:
1- the video covers several sectors, bars/pubs being only one of them.
2- the guest speaker said “lots of intrinsic value” for the pubs and bars.
3- The only moment he spoke of Marston’s was to say that it was the listed pub/bar company with the “highest margins” (at 23’00” approx).
4- However, when going beyond his factual claims, that guest comes across as an incredible idiot: when commenting at the majority of the pub/bars listed (NOT MENTIONING MARSTONS EXPLICITLY), he said that the high “NAV [was] offset by debts”. It’s an incredibly stupid statement: NAV / net asset value is literally [assets minus liabilities].
https://www.collinsdictionary.com/dictionary/english/nav So a high NAV means a business is comfortably solvent and can comfortably cover its debts.
Now there are other broader macro considerations also covered in that (very very amateurish IMO) video which do not necessarily paint a fully rosy picture but pubs / bars and Marston’s in particular are not particularly suffering from that direct and indirect (amateurish mostly) coverage, all things considered.
Sorry I need to mention that my post below should have been addressed to lejjb
In your research int MARS did you watch the vox markets video Friday 5th where they focussed on leisure & in particular on brewers and pubs ?
If you had you would have seen them discouraged by MARS because of the debt.
I think it is well worth a watch on youtube if you want to see independent research.
"Anyone who has researched this company and its history since 2020 will know why I’m saying that."
Please elaborate?
I genuinely believe Marston’s will get taken over above 90p per share by July, unless the SP rises organically to that figure before then.
Anyone who has researched this company and its history since 2020 will know why I’m saying that.
Still waiting for the re - rating , I wonder in which year it will appear ?
The LSE.co.uk log of trades is wrong (not the first time it happens), TradingView has shown transactions for that day.
Site not showing buys and sells in the morning....But...plenty of buying and selling in the afternoon.....A bargain ....now rerating....Expect good Christmas trading announcement ,very soon.....
Not a single buy or sell all day? Zero movement?
Https://www.mirror.co.uk/news/uk-news/thirsty-brits-down-400-million-31782414
Https://moneyweek.com/investments/top-stocks-for-the-new-year
Saxman -As Marston supply drinks to the MAB group we also all hope they do well too and Marston and the Brewery will benefit from their equal good fortune. GLA.
Let’s hope so as I am in deep I don’t think it will be as good as MAB
2024 expecting this to be a winner.
Last summary on the Marstons web for 2023 before we enter the growth 2024yr gunning for £1B in revenue.
Pubs to be proud of
Our core strategy and vision is of delivering ‘Pubs to be proud of’ remains unchanged. We achieve our goals, sustainable growth and value creation through our focus on people, experiences and responsibility.
1,414 Pubs and bars c.11,000 Employees £872.3m Total revenue £34.4m Net cash inflow.
2024 is going to be a growth year. Enjoy downing the shorts!
Barchid, I may have not been clear when stating the Brains Leasehold Pubs are of little value to Marstons. THey are held onshort term leases, Ralph Findlay and John Rhys agreed an up front payment ( 6 months Rent in advance). Brains were trying to avoid Liquidation. The terms were on the basis of full repairing leases ( the tenant agreed to repair and in many cases bring some run down pubs up to a good structural standard) there was a handful of Pubs which were so bad and omitted from the final transfer. Those Pubs and for that matter others, were not fully surveyed when the deal was struck. Brains(John Rhys) was anxious to get money in the Bank and Ralph obliged. Brains retained the freeholds on the basis they wished to take advantage of future capital appreciation. That was the story, however within 2 years (2022) the freeholds were sold to Song Capital. Make of that what you will, doubt Song have acquired as a good samaritan, more likely to extract better value from their Tenant!
Turning to the accounts it would do super puffer's limited corporate knowledge the world of good to read the Independant auditor's report. It has some very interesting phrases which could concern any LTH.
Some investors are here seeking a quick profit, but not really interested in the company's long term survival.
As Shorters are getting desperate on here and panic they do really need to read the "official releases" to gain any respect, where the values of Marstons prop. during the pandemic were over £2 billion, something they turn a blind eye to, like they also did not hear or see the Chairman saying the property values during the Pandemic were now to be revalued post pandemic where the Company is making money, and every recent pub sold that was not part of his plans sold recently in excess of current book values. I wonder what the whole estate is going to be worth now to a Profiting environment, not long to wait! GLA. 6.63% gain today in addition to previous gains. Time to re-buy back in shorts before it's too late!!
FD
Indeed it should be noted that according to the results recently put up on their website that net debt, excluding lease liabilities, is currently at £1,185 million down a measly £31 mill from last year (2022 for dischargers benefit as he is usually in the wrong decade), and with lease liabilities debt is £1,566 million which considering the business had prioritised debt reduction a £31mill reduction against their debt figures looks almost insignificant, or a "rounding figure".
I don't think I am misunderstanding anything here but if so I apologise. I always feel nervous when I read the "underlying" EPS is a positive (5.1p) but the "actual" is a negative (-1.5p), there can be good reasons for that but with debt at the levels quoted I think I am correct in being rather sceptical.
As the shorts get burned fast due to the strong buying of Marston shares. We can see on one on here never ever shares a positive view for this or any other share he comments on with the LSE comments message section. The other who he recently agree with and commented sold his Rolls Royce shares at £1.46 and the price of that has doubled since. Shows what two of them know. However true to form I can see the price of Marstons shares doubling in the next two or three weeks, especially when and after the Christmas sales are in, when the new CEO is in, and when the BOE rates are revalued down. GLA.
Do you understand that some here are considering Leases are of value when as pointed out the Brain's element are of no value but a liabilty. Incidentally Drakeford has just announced all Pubs, shops and restruants too have rate relief reduced from 75% to 40%, to plug the Health Service deficit. The affected business are up in arms.
Best to read posts correctly and in context which avoids any confusion!!!
Recovery in progress, bookings for Christmas fully booked, Inflation down to 3.9 %, money broking experts are saying next yr we may see 5 cuts at the B.O.E. what with the CM JV growing fast with new contracts being signed I hear every day, where recently Stonebridge signed including the largest Pub/ Wine bar estate om outlets in the Uk, and the only people being burnt are the small town shorts, some of which have admitted they personally do not now hold any shares -well when they buy them back they will need to pay far more as this share price rises even more into 2024 the Marston growth year as advised on their official web. I will certainly be having a Merry Christmas here. GLA -enjoy.
The debt is attributable to the leases/mortgages on the asserts so I wonder if you are really understanding the financials.
https://www.proactiveinvestors.co.uk/companies/news/1034179/marstons-loungers-and-gym-group-to-see-shares-rally-says-analyst-1034179.html