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Hoolicat’s contribution is particularly interesting and although total collapse is possible it does emphasise how debt could overwhelm Marstons.
Hoolicat made mention of the Pub business bleeding cash, it would be interesting to know how the company is handling Tenancy Arrears and it’s level?
AIMO DYOR
With apologies to the Bulls.
Have just returned from a trip to the Midlands where I did stay at a Marston’s Motel, more of that later.
Have caught up with the many interesting posts.
The whole market is still in uncertainty, COVID 19 is not going away in a hurry and the hope a vaccine will arrive needs to be considered with caution. The annual Flu virus mutates and from what I am hearing COVID mutates at an alarming rate.
Lockdown has damaged the economy beyond recognition, easing of rules is NOT being observed, many believe too hell with it I am going to enjoy myself. These are ignorant to the damage this socially selfish attitude is having on society and the economy generally. Many socially responsible people are afraid to go out, for obvious reasons.
Comparitors are being made between Australia and the US. Just look over the Tasman where New Zealand enforced a total lockdown/lockout and their situation is clear for all too see. We cannot turn the clock back but severe pain for a short period would have been worthwhile to then emerge in a stronger position rather than the prolonged hiatus we seem to be in. Too many on furlough have a good excuse with COVID, too not return too work convinced the Government will keep them.
As stated many, many weeks ago there is worse to come in Markets.
The hospitality sector is being seriously impacted, those with healthy reserves are going to survive and pick up cheap assets.
Having sold the Brewing business in it’s entirety for £250m in April 2019, Fullers were able to return a special dividend to Shareholders, and have recently acquired a group of Prestigous Hotels. Fullers still have a healthy balance sheet and make it plain, are on the lookout for further Quality Hotels/Pubs.
At the moment Whitbread have a healthy balance sheet, having recently raised £1b through a RI, and it is an open secret are in acquisitive mood.
These 2 companys demonstrate the benefit in having relatively low borrowings.
Marstons expect to receive £239m in Q4 which will pay down debt currently over £1.3b.
Then according to the Company’s mission statement, the Strategy is to focus o Operational Excellence within the Pub and Accommodation business, plus further debt reduction.
Too achieve Operational Excellence will require funding. It is difficult to predict levels of profit from the JV which will satisfy this requirement. This leaves Asset disposal and or Additional funding.
Asset disposal under the terms of the JV could be Marston’s Achilles Heel, but could be part of the solution.
Raising funds through a Rights, may be unpopular but it may be the only untapped resource which enable the BOD to deliver on it’s strategy. Having pulled capital works in July 2019 and now committing £90m this year for Enhancement/Capital works , shareholders should be asking where is the money coming from?
Remember the company have £350m loans due for repayment in 2023.
contd
Don’t get to excited it was my buy and I know no more than any one else just loading up at these prices
Watching from the sidelines but can actually see a few positives for MARS despite Covid. Of course they will take a hit but despite the negativity I can see MARS taking up some of the demand as small independent brewers go out of business.
I also think next year the British’staycation’ will be more popular as earnings get squeezed and the holiday companies still trading hike prices for overseas holidays.
Also have one eye on any increase or decrease in the number of shares out on loan for short selling.
Let's just hope that the UK government are much more pragmatic in their approach than australia. You have two approaches. The USA approach and the Aussie approach. Both are opposite extremes. I believe europe are somewhere in the middle, a realistic approach with economic damage limitation in mind. Total eradication at this point in time is neither practical nor feasible; in fact it is simply impossible. One person coming into AUS with covid could trigger another wave.
As I said earlier, I dont think the UK hospitality sector could survive a second lockdown so I dont believe the govt here would take the aussie approach unless things got out of control as the economic damage caused would be immense, far greater than 1st lockdown.
This is one of the reasons why the UK govt gave individual counties the power to lockdown rather than leave it to central govt where they have less local intel on the situation. This is the correct approach. Why should London lock down If manchester are having a resurgence in cases?
Dipped in at 36.3p as this is fundamentally cheap, but who knows. Let's just hope a vaccine is found pronto.
Mars low was between 18 and 19, it’s jdw that is more depressed by your measure.
Frustrating to see the ftse having a good day but leaving the pub sector to fall so much, if only the media would stop speculating for clicks.
at it's lowesr Mars traded in the 20's for a few days and JDW Was around £5.50
JDW is holding up better at £8
there is more going on at MARS then we know in my opinion (don't bet more than you can lose)
GL all
I don't hold but i'm nervous for those that do
Take a look at Australia, case rate 400 per day, deaths under 200 (total) and yet we have a stage 4 lockdown! 6 weeks, pubs, cafes, restaurants all shut down and so my point being this is exactly what will happen in the uk in the coming weeks, as a result the fear factor kicks in, other countries who are dealing with Covid or have dealt with Covid better than the UK have taken action, sadly the UK will at some point follow suit and end up in another lockdown and pubs and restaurants will be the 1st to shut down and the market can see this and that’s why the SP will continue to fall, this SP won’t rise until a vacation is proven and this could be anytime, next year if we’re lucky so it’s a hold for the long term and that’s a fact
JV was a little delayed but should be complete by Q4. Pubs are buzzing here in London too, always have a sneaky look at JDW, MAB and MARS pubs. All are looking very good in terms of footfall. This should only improve this August; I will be fully capitalising on the governments offering of half price food.
I agree that once fears of a 2nd wave and lockdown subdue, this should snap back fast to 50p+. How low it goes before then is anyone's guess, but the huge gap up from JV announcement has been filled now.
Any one know the dates for the JV to complete ?
I think once they goes through and we get confirmation that pubs won't be closing in the short to medium term, we should hopefully see a recovery ...
You would think this would be going up now, pubs here in Wales are bouncing. even the carparks are full and inside drinking allowed from today. Its bound to reverse very soon.
There you go. Pubs and restaurants are now being priced to close again. God help the UK if they choose to. The sector is one of the biggest employers. Many of the UKs small businesses are pubs and restaurants and they would not survive another lockdown. This would send shockwaves through the economy.
I really cannot see this happening now they have gone all in to help restaurants this august. Things would have to get seriously bad to go back to lockdown of pubs and restaurants.
I think that is a possibility and not too long. At 10 per cent per day it wont take long. Only got a small amount here and will add at some stage.
IMO they will won't close pubs, restaurants again it would cost the Government billions and un-employment would sky rocket and the whole sector would disappear, there was only 8 reported deaths of COVID yesterday according to the stats which is very low.
JV will go ahead 100% because the Government cannot be seen to be doing anything that prevents a company surviving and getting stronger.
The only concern is that even after the JV is approved, the SP cannot surge to 60p or even 70p because it will continue to be weighed down by the threat of a further closure of pubs.
Would suggest 60p + is possible on any given day with some good news. One has to bear in mind the recent jump from 30p to 75p + on JV news before claiming this as an impossibility. Personally I don’t agree with the 20p figures being thrown about but each to their own. The delay is due to CAMRA and from what I’ve seen posted, if I was a CAMRA employee I’d be loading up right now if I suspected the JV will go ahead. At the end of the day... there’s money to be made and it isn’t all black and white.
The question I would ask myself is whar would the SP be if there had never been a coronavirus outbreak. I would suggest no more than 80p, that is based on the profits and high debt.
The company now is stronger with the debt reduction programme, but with the lockdown only recently ended sales are weak and will for a long time. expect a poor Christmas. If there is a vaccine that offers even 3 months protection next year, that will signal the beginning of the end of Coronavirus. Thankfully for you stockmarkets are forward thinking and the SP could hit 60p because some 12-18 months later Marstons could be a strong company. The only concern is the short term likelyhood of the SP crashing to 20p.
Afternoon All,
Any ideas when I can expect to get my 60p back as only came in for a short term trade lol
I'm more concerned about the delay to the JV to be honest.
Don't think the market ever expected covid to magically disappear in the summer
Agree completely. Even back at the start there were no strict guidelines for people to follow. The sooner they get a handle on that the sooner everything can return back to normal. Means to end job...
IMO The Government just need to get stricter on those flouting the rules, I have just been in ASDA and seen quite a few people walking around with no masks and touching everything so its these individuals who are the problem.
I'm invested quite a lot in MARS so i'm holding for a good couple of months, maybe years but I think they will survive regardless .
Personally i don’t see how having either schools or another activity open changes anything. The government need to strip it back to basics and focus on stopping the spread. I’m more likely to catch Covid via my daughter being at school as to what I am my daughters teacher drinking at her local pub, going to the gym or socialising with her family and friends or vice versa.
We either need barriers in place to prevent this or just remove the goddamn bridge. Closing one activity for another has to be the most unscientific solution that could have been presented ha
Pitterpatter very true.. My very simplistic view, protect the vulnerable and pay them to stay at home and let the rest of us get on with it! As HRH Prince Charles said he's had worse hang overs!
The worlds mental and financial health will be a bigger problem than the virus. Unless of course the government knows something regarding its source, ie manufactured chemical weapon, then this crazy response might make sense.
Title shares same mentality as the tards. If that minority were self isolating sensibly on any sign of illness or in general taking reasonable precaution rather than following such titles/mentality this would all be behind us already. The world we live in ehh...
*technique