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Entered around 500p in late November before results. Happy to hold although had I been a trader I could have bought/sold/bought again. Dividend yield is still attractive at 556p but better at 500p. Like the target price set by Liberum. Hoping for a warm Spring and long hot Summer now.
The short position is still showing as 10% of shares, so a lot of buying back to do. The amount of shorters closing positions of course will depend on their entry level and the heat that they are currently feeling
I�m just pleased for investors it�s going in the right direction,to think last week my hand was hovering above the sell button.This was 750 early last year and was shorted on the basis that sales would collapse,down -1.2% for the year ain�t exactly liquidation,and with an encouraging Easter I think it may have turned the corner.
I thought this would continue dropping given the sector outlook. Got out too soon but nobody ever went bust taking a profit is the way I look at it.
You were right to say 530p to 570p was on its way sooner than I thought. Strong momentum now and I guess some positioning going on for the future yield as well as shorts closing rapidly. Liberum has a TP of 690p which would be excellent. Rises following rises are a very good omen.
You might be right Dip. It depends on how many of those shorts are closed. There is bound to be pull back or when investors sober up in the morning. I didn't call it right in January where I thought it would be 570p to 600p. Its sales while slipping have been ahead of the ale market in general and well ahead at that. I wish it wouldn't lazily blame the weather every update. Some goiod weather is overdue and with two bank holidays in May plus the Royal Wedding and World cup there may be some payback for the snow. Surely some UK equity high yield funds would be interested here in taking a position too. Hopefully the Times or Telegraph will give a buy tip tomorrow which could draw in more punters before the weekend.
Falling knife you may hit 5.30 a couple of weeks early,it was sitting at that price around a month ago when it was all doom and gloom GLA
Time to get the vouchers out and head down the pub.
I agree about the upwards momentum Fallingknife1. And, yes, you are broadly right about volume of food sales being profitable overall. However, Wetherspoons' business model works for them, not least because they get loads of extra volume by firmly establishing themselves in customers' minds as an all-day venue (breakfast, coffee, lunch, dinner, beer). They have also often carefully located in town centres (or vice versa). Credit to Tim Martin for this. Many brewery pub co's have instead chosen to build a pub/eatery next to a hotel in their company group, often away from a town centre, which may be convenient at one level, but cant get the same all day volume of sales as Wetherspoons, as you often need to drive there. Pizza is of course very cheap to make, so this is hardly a fair comparison with two chicken breasts or gammon steaks for �10. I may be wrong, but I feel that whilst 2-4-1 or very cheap food works for some companies, a race to the bottom doesnt help and that the overall expereince counts for somethnig. After being driven down for a decade, wages are also rising, thus squezzing margins still further. Even Tim Martin commented on this after his last set of company results were out mid-March.
I am not buying your argument Paulem as Wetherspoons is relatively thriving and they are immersed in the market you talk about.. GNK I assume have higher margins. Your example of 2 for 1 at �10 might hold water if they only sold one per hour.. Their wholesale cost of supply would be much lower anyway. I saw Pizza Express average cost of toppings is �1.50 yet they can wheel out pizzas for �15. A lot of shorts will be closing today. Those who took a position on another PW are getting horsed. If these shorters are flushed out and the divi is safe then we should see some strong upward momentum.
The management seem to be heading broadly in the right direction in the company turnaround, not least by getting rid of the awful Fayre & Square, cheap (in every sense) venues. They have, for example, done this to a place near my parents in Blackpool (Thornton Lodge), and people are coming back to quality. Most of the pub co's seem to be in a cut throat battle to offer cheap 2-4-1 meals, rather than letting people pay a few pounds more for a quality experience. With the minimum wage/living wage and overheads, how can you sell two main courses for �10 and make a profit? Still we have the World Cup, or possibly World War III to look forward to this summer!
Fallingknife. You have inadvertently hit the nail on the head IMO. The problem with the company and debt is that it could indeed be resolved by the disposal of property. It makes me wonder whether this could end up being a reincarnation of the Enterprise Inns situation. Balance sheet items being disposed of has an effect all round, especially if the valuations of the properties are disparate to those represented on the balance sheet. We know certain accounting practices could cause a problem in this respect! Catch 22.
I think some of us might be helping service some of that debt tonight by drinking copious amounts out of sheer relief,and don�t forget the shorters crying in their beer.I understand the debt situation,but honestly if you�d offered me this update just before closing yesterday I would of bit your hand off irrespective of how this ends up today.
A tricky one Cgull because if they slash the dividend to finance the debt then it would be the death knell for the SP. I suppose debt at 4x EBITDA is high but it is a very cash generative company and many of the liabilities are non-current or caused by the acquisition. Perhaps when theys ell off high vale pubs they could use that to servie the debt instead of recycling it into the pub estate.
A very measured and upbeat statement. As others say, it is the debt that is dictating the mid to long-term SP.
I agree Dip and was in the same boat myself. I knew that snow would be rolled out as an excuse. I bought in at 675p mainly for the dividend. I was positive after the January trading update thinking a return to 570p was on the cards but am even more positive today. The key is the term sustainable dividend which will allay fears. It also means GNK is in a select band of Ftse companies that are high yielding but safe if you believe the chairman.. A big jump already and I say there is yet more to come. I am looking for 530p to 550p within a few weeks.
if they can pay down their debt the shareprice will rocket. So far they haven't managed to make big inroads here
+ve statement . But massive jump. Good dividend yield . Bid coming ?
Both drink and accommodation sales up on last year,excellent Easter after the bad weather,at current valuation what�s not to like
A welcome statement from a typically solid company this morning bodes well for future despite cyclical downturn in consumer spending. "sustainable dividend" is the most important element of today's statement along with clearly defined cost saving measures and appropriate investment in the estate at a difficult time. Noone can expect any pub / food operator to be in growth at the moment but Greene King have demonstrated that they are well positioned to withstand the difficult current trends and will benefit materially from the failures of other operators to pull through.
What I've seen over the last year or 2 is results, good or bad = share price drop, but I agree that a price drop before results does not bode well
Totally agree Cgull, I�ve been battered on this share,sometimes you just have to hold your hands up.maybe it�s time the CEO took a look at himself.
This drop today doesn't bode well for the trading update tomorrow. The March sales figures will be problematic given what others in the sector have done. I don't care what anybody says, there is always a leak.
Looks like I�ll be put out of misery ,trading update next Thursday
I�ve been really feeling negative about this share,a couple of days ago I was about to cut my losses and sell,just before I was about to sell l took a look at TripAdvisor reviews regarding Greene king carvery pubs , to my surprise in the last couple of months they�ve had a majority of positive feedback regarding refurbs and the roast carvery, taking into account this was mentioned in the interim results,the CEO said the poorer weather had also helped the carvery buissness.Im actually feeling more upbeat and have a gut feeling we are in for a pleasant surprise,if only the CEO could be a bit more positive when he speaks,but I do feel the business decisions that are being taken maybe bearing some fruit. Here�s hoping