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Barchid
Stayed at the same motel
The experience was a bit like the Curate's Egg.
I'll start with the best part. The Breakfast team ( yes breakfasts were on this time), were helpful cheerful, attentive and wearing masks. On the contary the Receptionist on Friday night was anything but friendly, remained sedantry and when presented with my confirmation Booking email insisted on me giving my name. Presented my Privilege card but am not sure whether or not the discount was given ( will wait for my Visa statement). Used the electronic card to access the room, in separate block to Bar and restaurant , however even though kettle, cups etc were present NO tea, coffee, milk etc. Did not complain having just driven over 250 miles. Did understand later, the receptionist should have given a sealed bag with tea, coffee etc.
The first impression always sets the tone of the establishment even though the Breakfast team performed well, the receptionist gave me a bad impression.
If, as promised, Marstons are to provide Operational Excellence, serious staff training must happen, focusing on Customer care particularly Front of House staff.
Given the motel is in a good location and a Friday night I estimate the Bar and Restaurant was no more than 40% occupied and outside tables possibly 50% occupied. I asked staff on Saturday morning how trade is since re-opening, answer "slow but we are getting there"
In regards Tenancy arrears, aware as you state overdue rents etc have been bundled together up to the end of year 2018.
There can be no doubt that number is going to explode during the current year, we are unlikely to know precise figures until year end accounts are published. Had hoped Hoolicat may have been able to give us a clue? I will continue to dig but am under no illusion the numbers will be revealed yet.
I do not know but it is conceivable disagreements are ongoing between Landlords and Marstons regarding payment of Beer tipped down the drain. This in itself brings up another very important liabililty...alcohol tax. HMRC require payment of Alcohol Tax at point of manufacture when Bottled or Casked and not at point of sale as some think. Am pretty sure HM Gov have granted a tax holiday which means at some point the Tax will be payable as will other Taxes . The latter element will effect most if not all Trading company's many will have used these funds to survive, hope Marstons have it locked away.
A lot of bad and potential bad news is priced in, however I suspect there are other nasties lurking.
I'd be interested to know if anyone else has a similar update from around the country...
Hi Darkarches. Its actually quite chilly around here at the moment so on this occasion there was only one other person outside but inside was full. As you say, a sign of confidence!
That's great news Ash. Was it full inside as well as outside? The Marston's I went to yesterday was packed outside but probably only a quarter full inside. But if it's looking like people are getting more comfortable sitting inside during Covid then there's more hope for the Winter and the normally bumper festive season.
Just been to my local Marstons, the Foxglove, for a couple of lunchtime pints. There was a real good atmosphere in there with no spare tables whatsoever. I sat outside to relish a couple of scoops - a Cumberland and a Hobgoblin Gold.
The manager says it's been similar throughout yesterday and today which is great news.
Surely takings across the board this month will help create a bit of a peak to the share price.
I'm booked in tomorrow night with the family for steaks all round 50% plus the privilege discount on top! :)
Fairdealer
Firstly did you have a better experience in the Motel this trip than you did last trip, presumably a different one ?
Secondly, you are good at these things regarding tenancies etc but if I am not mistaken between 2012 to 2018 the average of trade receivables considered overdue was around 25% ?
Presumably this is going to be a very different number this year, I know they have modified their banking agreements recently but who is going to pay, for instance, for all the old beer which was tipped away, tenants or Marstons ?
Is this something you have looked at recently ?
Clearly there is a lot of bad news built into the price already, could this come as another nasty surprise or am I misunderstanding something ?
Fingers crossed this will get back to 50p soonish. But in August who knows?
Same here Codejunkie.
The Avacta 'spit test' seems to be taking a long while though. If successful economies can begin the repair process.
I"m invested in Avacta. If their test comes up trumps everyone will have a lot more freedom. 10 min saliva test that can be done by the user. It's also linked to an app to prove your result.
Hopefully, if that comes off soon we'll all be better off and pubs and bars will be doing better trade.
Developed by Oxford Uni and being sold as we speak, Will help isolate individuals with the virus for a fast response within 90 mins to be able to isolate those with it and offer a quick track and trace to those in contact with anyone positive. This will help stop major city lock downs. I also see Leicester is now out of lockdown so the track and trace system works. Also 10,000 have been given the Oxford serum in final testing we cannot be far away now from finding at cure.
Fairdealer.
An interesting read.
Visited a Marston's pub today and very much a mixed bag. They certainly seem far from operational excellence, at least regarding the customer-facing side (lagging behind even Wetherspoons ! judging from this one sample), but their offering of drinks is definitely a strong point. There wasn't a single beer at the bar that someone could have surprised me with and I wouldn't have enjoyed drinking (no Carling in sight praise the Lord!). Interestingly more than half their beers were unavailable, including Pedigree. Not sure if this is a good sign (unexpectedly high demand) or cause for concern.
Regarding a few other points.
New Zealand were rather blessed in having the virus occur in their warmer months, and also in being very sparsely populated (even Auckland is rather modest). The virus seems to have hit hardest in very densely populated areas with poor air quality (the likes of Milan and New York). In terms of the UK (the South-East at least) we are more analogous to the Netherlands, Northern Italy and USA's Northeastern Seaboard. Comparing with them is probably a better prism to view UK's results through.
Covid mutating rapidly: Though this sounds scary at first, it is true of many viruses and most often results in them becoming more benign. This is actually in the viruses' 'interests' as dead hosts are no good for propogating itself. This is partly the reason why most deadly diseases stem from bacteria and not viruses. I think it is possible Covid is still with us in a few years and tolerated/mitigated much as influenza currently is as we come to understand it, and evolve best practices.
The gap before then is the rub. I am quite bullish on Marstons long term prospects IF it can survive, and currently I believe so. Partly as I believe the next few years will see high inflation, and this benefits the Marston's shareholder two-fold. Firstly, inflation raises asset prices (though this is true for all stocks). Secondly, it effectively shrinks our debt-pile. Further, should we find Covid is gone/vaccinated for, we are still likely to be in a lengthy recession. Traditionally pubs are seen as a somewhat safe-haven in troubled times.
I puzzle a lot over this company, I think that's part of it's attraction to me :)
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.