Marstons Share Chat (MARS)

Agreed Fairdealer. Thirdman, I'd recommended all here listen to yesterday's webcast from RF and AA presenting the results. Comprehensive coverage, and the Q&A at the end is interesting.

thirdman, vagaries of the Stock market. If we could see the future we would all be Millionaire's. In 3 months we will probably see a much better picture of the Hospitality, Beverages sector. Just sit tight and not lose confidence.

Being fairly new to investing in shares is there any way I could have predicted this write down? (appears to have come out of the blue). I was sure trading revenue(up 20%)trading profit (up7. 7%) that both would be up but this was a bolt from the blue. Any answers would be most welcome thanks.

See this drooping further once the dead cat is over, buying in again sub 95p good luck all.

Marston�s shares have fallen a little on today�s news. � New information comprised the held dividend and the reduced capex next year. The latter could lead to some small downgrades, but it will also reduce debt. � The final dividend could yet be raised and, with real wages in positive territory and LfL sales up (ex the snow) across the company, trading is solid. � Marston�s shares trade at around 7.5x earnings and yield around 7.2%. � The group has an attractive, well-managed and well-maintained estate of largely freehold properties. Wet led units are currently performing well and lodging is a major growth segment. � The company continues to sell product that the consumer would like to buy at a price he/she is prepared to pay. Leisure remains a growth industry and, certainly over the medium term, the group should perform well.

From their email this AM: MARSTON�S H1 RESULTS: Following the release of its H1 numbers this morning, Marston�s hosted a meeting for analysts and our comments are set out below: Trading � historic: � The group maintains that it has produced good results against a backdrop (snow, sunshine, early Easter, late May Bank Holiday) that has been hard to read. � Turnover has been �strong� and the beer business has been �excellent�. Some 90% of MARS� beer now does not go to MARS pubs. � Brewing margin is (and will be) down due to lower margin Charles Wells� business. LfL margins are up across the division � Taverns were good. � Average profit per pub has risen by 52% over the last 6yrs. This reflects the impact of churn. Marston�s does not have a significant tail. � Drive to pubs (Destination & Premium) lost around 1.5ppts in growth due to the snow � Accommodation has been very good. A lodge adds perhaps �300k to a pub�s turnover & smooths this over day parts. Trading & market - outlook: � Revenue and profits for the full year will be higher. There are more shares in issue. Current forecasts have EPS up a little with a marginal rise in the dividend to 7.6p. � The half year dividend was unchanged, and a full year increase is not an absolute certainty � The market is tough, but the consumer is still spending. Supply is down in wet led (which is helpful) but is rising (albeit more slowly) in food � Discounting is �embedded and endemic�. It is not worse than it was around 6mths ago but �is not sustainable�. � Marston�s discounts only very selectively and has focused instead on quality & service in order to drive footfall. � The group focuses on cash margin per visit � as this can be most easily correlated to the cost of providing the service. � The World Cup is a Curate�s Egg. Net, net the impact should be positive. The fall of the England matches (Mon & Thurs) will be helpful but the Sunday lunch match will not be. � There are some hopeful signs. Real wage growth is positive & unemployment is at 45yr lows. Balance Sheet, Cash Flow & Debt: � MARS will open 5-10 lodges p.a. for the foreseeable future. � Capex will be slowed but the landbank will continue to build. When / if MARS decides to step up its opening programme, it will be able to do so. Returns on build are still in the 11% to 13% range � Conversions away from the 2-for-1 format will continue. Langton Comment: � Marston�s shares have fallen a little on today�s news. � New information comprised the held dividend and the reduced capex next year. The latter could lead to some small downgrades, but it will also reduce deb

Tip Update: Buy at 105p Tip style VALUE Risk rating MEDIUM Timescale LONG TERM Our previous tip We said BUY at 119p on 04 Jan 2018 Tip performance to date -12% By Julia Faurschou Marston�s (MARS) chief executive, Ralph Findlay, reckons that February's cold snap knocked �3m off half-year profits. This seems to be the fallback position for any underperformance on the part of the pubcos at the moment, but we think the two percentage point contraction in the underlying operating margin has less to do with Jack Frost than costs linked to tenancy to franchise conversions, along with lower-margin assets brought in with the acquisition of Charles Wells Beer Business (CWBB). MARS:LSE Marston's PLC 1mth Today change -12.23% Price (GBP) 98.30 Snow obsessions aside, underlying trading, though mixed, gives cause for optimism. Like-for-like sales at taverns were up 2.9 per cent during the first half, compared with a 1.8 per cent decline in destination and premium pubs. The beer business remained resilient, with an added boost from CWBB, bringing sales in brewing up 79.2 per cent to �169m. Total volumes sold improved by 74 per cent, with market share growth of nearly a quarter each in both premium cask ale and packaged ale. The acquisition doubled the size of the export business, now around 8 per cent of total volumes. Analysts at Numis expect pre-tax profits of �107m in the year to September, giving EPS of 13.8p, compared with �100m and 14p in FY2017. MARSTON'S (MARS) ORD PRICE: 105p MARKET VALUE: �666m TOUCH: 104.9-105.2p 12-MONTH HIGH: 146p LOW: 96p DIVIDEND YIELD: 5.4% PE RATIO: 21 NET ASSET VALUE: 142p* NET DEBT: 155% Half-year to 31 Mar Turnover (�m) Pre-tax profit (�m) Earnings per share (p) Dividend per share (p) 2017 452 36.7 5.2 2.7 2018 529 -13.4 -2.0 2.7 % change +17 - - - Ex-div: 24 May Payment: 03 Jul *Includes �298m of intangible assets or 47p per share

There will be no return to boom and bust! ;)

I think so and I'll be watching tomorrow with the view to taking a position.

I don't see justification for a 12% drop in SP based on the interim results, so I bought a few more at these low prices.

thirdman, If you trust and believe the Assistant Governor of the BOE any time now, which co-incidentally will send everyone too drink, in which case excellent for MARS etc. Seriously, imo this stock is worth a further buy at these levels.

Andyagogo, I took a look and for the benefit of others on this board I'll copy it here. MAB Dividends comment As previously advised the Board is not declaring an interim dividend but will make an assessment of pay-out at the end of the year based on a full year of trading and development of the sector outlook. As previously set out, in making this assessment the Board considers investment to maintain the condition and competitiveness of the existing estate to be of primary importance for the long-term health of the business and would not expect to see a structural, or permanent, increase in the use of short term facilities. IMV this is a very sensible strategy. In considering the debt one does need to decide whether to accept the argument for the property leasing or not. If you do then the debt to consider is 'Debt excluding property leasing'. At the half year stage it is down �2m - a small drop. At the last finals Marston gave numbers for 2012 and 2017 which showed a �93m drop over the period. In the last 6 months the metric has increased by �31m, but I'm not concerned by this becasue of the seasonality of the business. I will be looking at this number at the finals for comparison with last year, and I'll be looking for something better than �2m down. Also agree, "it's progressive if EPS grows", which requires >15p EPS this year. I commented on this earlier. Londoner7

Wouldn't worry too much.... The country will probably drink its way through it....

When do you expect the next recession so I can sell out just before it starts.

I believe that the company will prosper in the long term and the returns in terms of dividend are good. I actively recycle their beer and believe that this is a good long term hold. Just wish their bottles were lighter, could save on transport costs! Time for a rise in share price soon but, of course, this is irrelevant until I selll!!

Just has the sp was slowly improving we have this unexpected blow. This is a non trading blow but as we are not in the property trading company. Non of the 20% increase in revenue as this has been spent just a readjustment of the estate value (Did not realise that property value had fallen that much since the last valuation). Now summer is here I expect revenue to keep increasing as it did in the last 6 months and Marston will have the cash to maintain if not increase the final dividend. I think the market has overreacted and not fully checked just reacted to the headlines of Marston make 6 months loss. Wish I had spare cash to buy more shares at these bargain price.

Well it's 'progressive' if EPS grows,. Let's see. Will have a listen to the webcast, thanks. I also previously mentioned to cut any expansionary CAPEX, where possible. Positive to see some belated movement in that direction. It's too late in the cycle for expansion, the focus should be on net debt reduction at this point, imv. The question you need to ask is ...how will MARS trade through the next recession?. I don't think we are in for a repeat of the financial crash, but recessions have not been abolished.

There is no logic to what has happened today. It is anybody's guess tomorrow. I will attempt to recoup my losses by using the Marstons discount card and have five meals and about 12 pints every night. By this time next year, if still here, I will only be a couple of thousand down. ( Excluding the expenditure on the credit card). It will not be good for my health, however, it probably will not I probably will not care anyway. This will be back over a pound soon, a good chance for the shorters to buy back in. DYOR as to how much discounted beer you need to drink to make up your losses.

The CFO was clear in the webcast this morning (recording available on website) - dividend policy over medium term unchanged. 2 x cover and progressive dividend. Was also clear that no concerns re balance sheet. Much is 2019 'slowdown' is to see what happens re consumer outlook. The Q&A session with analysts is on the webcast too - so many of our concerns here are discussed.

Mentioned this last year, the market is IMV now beginning to question this. Read what MAB have to say today re the final dividend.

For a real anomaly, look at EIG who reported yesterday NAV �3+ but share price �1.32ish (however this discount has been around for years). They say their pubs and property portfolio is independently valued, but dont think ive ever seen such a % discount to NAV I made the comment on ADVFN that with that kind of discount, they should sell up and return funds to shareholders

terrible day, hate to think where it would be if the market carried on another hour.. 90s next ??

londoner7, yes the tangibility of assets can be skewed particularly when examining High tech. company's who may have excellent Business model but little in respect of Fixed assets. As already stated, and it should be well known, H2 is always more income generating. I don't believe a break-up of Marstons is in anyway going to happen. The comment was too merely reassure, if that is necessary, the company has assets well able to cover the current SP, and therefore an investment to hold..

fairdealer20, I agree. Most stocks do trade above their NAV, but to my mind it isn't a big factor in my investment decison. A stock could trade below it's NAV for years. Indeed the NAV could come down to meet the share price. Also the NAV includes intangible assets, typically the goodwill following an acquisition. In the case of Marston's intangibles account for 30% of the NAV quoted. But other factors being equal I would prefer one company with a high tangible net asset value other another. I trust the summer isn't so bad that we are then considering the break up value of Marston's. ;-) Londoner7

The NAV is relevant to most Share Price's, how many stocks trade above? The vast majority of quoted stocks. The Late Jim Slater used NAV as a major factor in his Buying Strategies. I feel far more comfortable investing in a Company like MARS where the "break-up" value considerably exceeds the Stock-market Valuation, whereas one like WHTB does not.