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Time will tell whether MARS is just another value trap.
However, I am patient and notwithstanding concerns around debt levels and property valuations I find the 2/3 discount to NAV compelling.
I also think the management are following the right strategy and now that interest rates appear to be nearing their peak I think the potential upsides justify the risk of being long.
I have now consolidated all my pub co investments into MARS as I see the greatest potential here over a 5-10 year horizon.
GLA, DYOR etc
Latest figures very soon for H2 however when comparing for the full fiscal yr end 30/9/22 the results are not what the doomsters would like to see. i.e. :-
Marston have an EBITDA of 299 M&B 256. Mars EBIT 255 M&B 123.
Whereas M&B might disclose an overall higher profit their expenses are also very high and on a reporting basis in fact they earn less per share than Marston. M&B on a reported basis they earn Fiscal yr end last yr 2.20 per share and Marston earned 21.40 per share.
So from a shareholder point of view it will be interesting to see if the Marston management want to re-introduce dividends on increased sales or continue to pay back debt. I would be asking M&B why based on their net earnings are their costs so high to erode their normalised profits but then as you said Karl their debts are also higher than Mars.
I think baby doomster is saying that Auditors are the ones to give credit to M&B etc,etc, and not Marstons. I cannot see they were responsible for a Pandemic do you? However they did write down values of our property whereas as a safeguard whereas M&B and others didn't. I suggest we will very soon have some far better results and our auditors can re-adjust the values back up and then the fund managers who are watching and building small stakes will buy in some more and once they do we will be back in the FTSE 350 and pension fund and tracker managers will too. We just have to wait but I certainly see a far greater recovery rate than with M&B -even if the doomsters prefer that share. They do not seem to want to contribute to the M&B board however so again they just want Mars to fall and so I rest my case as to why they have motivation to do so! I do not remember seeing one positive point regarding Mars from them and I have been on this discussion board as well as for many other Companies for many years! Perhaps they are M&B promoters or employees, well they certainly need them to make up for lost business during train strikes where most M&B premises are in towns?
Spelling corrections:
MAB has more debt than Marstons.
Marstons also has the 40% stake in Carlsberg Marstons, which gives then retail sale revenue, and better margins on alcohol sales in their pubs.
Considering the Platinum Equity takeover bid of 105 a share for Marstons was rejected as being too low, the BoD must see a ton of upside from here.
I personally would love to see another aggressive takeover bid with a third party buying 30% from the open market to force the BoD to the table and agreement.
MAB has move debt than Marstons.
Marstons also has the 40% stake in Carlsberg Marstons, which gives then retail sale revenue, and better margins on alcohol sales in their pubs.
Considering the Platinum Equity of 105 a share for Marstons was rejected as being too low, the BoD must see a ton of upside from here.
I personally would love to see another aggressive takeover bid with a third party buying 30% from the open market to force the BoD to the table and agreement.
It means MAB are better managed. They raised funds over 2 years ago, which reduced debt and provided for expansion.
Had MARS done similar the SP would be much higher now, instead of which asset disposal has been necessary
What tosh. Do read the Auditor's report and invent illusionary values.
The Auditors pointed out in September 2019 property values were too high, Directors took note and decreased values creating an impairment of £64m for the financial year ending 29th September 2019 well before the pandemic, which started in January 2020. After which ALL property values further declined as they are Now.
Rampers seem intent on distorting facts. The company debt stands at £ 1.6b . We will soon see ( Mid October) what progress has been made to reducing debt in the current year ending 30th September.
Sales increases can be bought, it is net profit that shareholders need to see.
Many hostelry's are reporting a dire july and August because of weather conditions. Let's see if Mars buck that trend!!
Some of us have been here longer than many and know how badly the company has been managed particularly by Ralph Findlay who has left a mess (debt) for others to sort out.
Look at the price divergence around October 2022 and then another big divergence on March 2023, between Mitchells & Butlers plc and Marston's.
Considering both companies are roughly the same size, same debt, etc.. it means that the marstons share price has a 300% rise to match.
I went into my Broker a/c today and looked up Coltrane and they now own 5% of the Company registered under their Master Fund and Long Term value fund.
I also researched and found they issued a statement in public domain to say they would short American Tech and look to buy investments in Europe that are slow to recover from the Pandemic - Where they see better value.
My own Broker mentioned Four of their Brokers have Marston as a suggested strong buy, with two being a simple buy, four brokers are neutral and one one suggests to sell. So we are at least moving in the right direction on past adjustments with a raised sentiment going forward. No shorts fund registered entry now for Marston on the Short tracker index. GLA. DYOR.
The senior member of the Doomsters returns from Holiday -haha! Those who want to discuss a comeback only need to review the Marston chart for the first week on January 2020 to discuss how this share will come back on re-valued property that is now making money. It was good of Fair trader to be generous enough with his statement that mentioned the values previously had been made reflecting on the market conditions at the time the pandemic had started and now we have a come back post pandemic. Negativity is going to be turned around to positivity.
Hopefully the strong warm weather we have had for September (which even doomsters have enjoyed) will also add to the H2 numbers due out very soon that is something we can discuss when they arrive!
I have to say that the statement "doomsters here want everyone to sell so that they can come back at a lower price" is very silly.
Anyone who thinks that the posters on LSE site have sufficient stock holdings to materially affect a stock price which, even at these glum levels, still makes for a market cap of £196 million must be seriously delusional.
The whole point of these boards is to discuss & chew the cud over stocks of mutual interest, but to believe stock prices of this size can be manipulated on here is frankly laughable.
Good points Karl - I summarise and will add as Sales up to pre-pandemic levels and debts being reduced. Interest rates appear to be near peak where inflation is reducing and sales are up. When the commercial property values are revaluated we should recover to well over a £1 a share with a reversal of the fall in the first week of Jan 2020 when we have new sales figures.
We do not have long to wait now for an update on "summer H2 sales" which are at their highest number for Marston and then will still have later in the year the full results which will include the Brewery partnership and home sales. A lot to look forward to with this share. GLA.
1: NAV is 95
2: Compared to Mitchell and Butler, Marstons is 500% down. (they have similar debt and rev/profit)
3: There was a takeover bid of 105 in Oct 2021, and the BoD rejected as this price is "undervalued".
Marstons have done the hard work of:
A: New Carlsberg Martson partnership is better profit generating
B: Site consolidation to yield better profit from their estate
C: Site consolidation, with property sales reducing debt
D: Debt is being reduced and fully handed and inflation coming down
What Unfair trader has highlighted is that in early 2020 when the values of the property took into account the pandemic looking at past property values for the past two years the share price within one week fell from £1.11 to 0.23p on falling sales and this shows the effect the Covid 19 had on the business. However as we can all see the reason for the fall we can now see the management have said not only are we back to pre-pandemic sales but when the property values are re-adjusted on values to reflect back the earnings we will recover to the correct amount with the NPV at 97p and likely to go back to the £1.11 level. This must be one of the best buys at the moment of the LSE. GLA.DYOR but look at the 2020 Jany chart. The doomsters here want everyone to sell so that they can came back at a lower price. They are mistaken.
The company has to pay the annual interest on its loans without fail or the banks will become tricky. As long as the interest is paid, then inflation will erode the real size of the debt. Companies can also claim tax relief on interest but not on capital repayment so nibbling away at the debt makes sense. Repaying 50 mil each year and ten percent inflation is going to see this debt as a fraction of value and turnover fall quite significantly.
Come on the Auditors observed the over valuation of proprerties approved by the Directors,. This observation was contained within the Accounts finalised on 29th September 2019. The pandemic officially began in UK in January 2020 after which ALL property values were affected. If as claimed the Directors had foresight in yr 18/19, we should be a a very much better place than current as the SP proves.
The Valuation information may be considered negative, by some, but critical for intelligent and serious investors in their decision making.
No doubt as other outside factors were considered such as the start of the pandemic they were right to lower valuations based on "In FY19, management have undertaken an exercise to identify if there have been any impairment triggers or changes in value such as a change in market conditions " -perhaps now as the group as a whole has changing conditions to reflect better sales than before the pandemic the property values will be re-adjusted back to what they were. This will increase the Company NPV further which is why the Company is now basing shareholders benefit from increased sales. I see absolutely no error of judgement they were being cautious perhaps all of their competitors should have done this at the time as well? As usual bias towards negative sentiment when not required! GLA/DYOR.
Read the following statement issued by the Auditors who qualified the 2019 accounts,
Now apologise
""Valuation of the estate (notes 1, 4, 11, 12 and 18) – Group
and Company
We focus on the Directors’ annual assessment of the carrying value
of land and buildings because properties are a significant item on the
balance sheet and there are complex and subjective assumptions used
in the valuations, including the future expected financial performance of
pubs and the earnings multiples applied. A full external valuation of the
estate was undertaken during FY18.
In FY19, management have undertaken an exercise to identify if there
have been any impairment triggers or changes in value such as a
change in market conditions or a fall in the trading results of a pub or
segment. Other factors considered relate to property based transactions
both within the marketplace and the Marston’s estate, which could
indicate changes in the carrying value of the estate. Management have
noted such triggers and have recognised a net impairment charge of
£69.2 million, of which a net charge of £44.6 million has been recorded
in the income statement and a net charge of £24.6 million has been
recorded within the revaluation reserve within equity.""
Which exact hedge fund?
Without specifics, it's total wishful thinking, sorry.
If it's in reference to the Coltrane Master Fund (1 and 15 August RNSs), those were not large acquisitions - and they were partly offset by Morgan Stanley offloading some of its holdings.
Right now, I noticed several 10+k and 50k buys, but I don't have any conclusive info as to the source.
You are right in that on this thread someone mentioned an American Hedge fund investor has invested with a disclosure and wonder if we had any shorts registered. I looked up on short tracker but the Company mentioned are now advertising the fact they are shorting American Tech which has risen fast this year and are now looking for opportunities of investing and buying into European Comps that had taken a hit during Covid - so you never know perhaps we will have a further disclosure soon? who knows. As ever keep-em peeled. per Shaw Taylor.
Karl -good points raised -but Don't forget to add on to the Marston value :-
The 40% SHARE THEY OWN IN THE CARLSBERG MARSTON BREWING COMPANY SERVIING HOW MANY 1000'S SUPERMARKETS AND ONLINE SUCH AS AMAZON do they have to serve, where profits and the number of beers is now increasing due to economies of scale savings and variety from the merger of the Breweries. Where there is the possibility to take up slack lost from Russian production to Europe.
HOW MANY MITCHELLS AND BUTLERS ARE IN TOWN (subject to rail strikes?) Whereas Marston are locals.
MARSTON HAVE SAID FRANCHISED ROLL OUTS WILL INCREASE AS VERY PROFITABLE!
LAST YEARS FULL YEAR FIGS WHEN I LOOKED SHOWED ME EARNINGS PER SHARE WERE GREATER WITH MARSTON.
Gla/dyor and as Shaw Taylor said watch out and keep'em peeled for the unfair trader and his dad children.
Nice little tick up today on warm weather Sentiment! interestingly Unfair trader comes here with negativity and rubbish statements of how the board went around conducting their own values which were wrong, when they employ professional qualified people to do it for them. How long would it take to go to Scotland and Wales and then to the whole of England to look at and value 1400 sites? Rubbish. Statements alter too where he has repeated said previously he is an investor as he likes his discount vouchers. I suggest an audit for those who don't hold shares and still have use of the vouchers. For the Company the values of the Estate have been proven to be conservatively valued where the Management have said that those sold recently for more than book value. So what do we feel will be the values for those that the Company wishes to keep that are far more profitable?
As unfair trader has his JCB out I am happy to answer my godfather left me some money (but no shares) but no doubt all of his shares would have been left to my Aunt (my God mother) and his two daughters. My own shares I have bought myself and have been adding to recently, building them up which I feel is very wise considering we have an NPV share value in late 90p's AND one thing my Godfather did say to me was what a great company this was. He was very true and upright a military man which is why I have been drawn to Marston, as well as some other great British Companies that I have respect for. I am only pumping this share as we need to see a balance to the negativity and incorrect statements. Anything I say can be found on the Company web site statements. GLA, DYOR but beware of Unfair traders statements which contain inaccurate accusations likely to upset the Management are surprising from someone who appeared previously to enjoy his discount free voucher- for being an investor-perhaps this needs looking into as would you want to be drinking with someone so negative. It would drive you to drink! Mind you he would help sales, ha.ha!
Dulwichman, until Covid the BOD conducted in-house desktop valuations of the estate. These values were subsequently discovered to be wrong and downward valuations were then adjusted within the accounts.
The company then decided either willingly or by pressure from Lenders, to contract out Valuationsto suitably qualified valuers. The estate is now valued on a 3 year cycle, 1/3 of the estate valued each accounting year.
Not sure if District Valuers use the Red Book as do RICS Valuers.
I seem to have touched a raw nerve, SC? I deal in facts not hopes. Are you in PR for the company? You continually come out with statements which may be inside information. You know the sale value of recently sold properties. Where are those values published? They do not appear on Christy's site.
The re-development of any Pub site is not simple LA approval for change os use is required apart from Full planning permission, and do not forget many Pubs are regarded as Community assets, consequently Local groups and Councils take over the management of Local Assets.
A question you have failed to answer. If the company's performance is so good why have they breached loan agreements, not once but twice. That is a fact, please give an explanation as you are close to the Board.
As far as trading is concerned, just remember your own position. Shares bequeathed to you by your Godfather which you then admiitted to selling even though you insisted would not be sold.
I am not a trader and never will be, but like fair play where any investor has a fair and reasonable insight into a company they are either invested in or considering.
Michell and Butler: Locations = 1700
Marston: Locations = 1500
Michell and Butler: Debt: £1.4b
Marston: Debt: £1b
Michell and Butler: MCAP £1,314m
Marston: Debt: MCAP £203m
Are things being equal Marston Share Price should currently be in the 60's
For once, SuperC what you are writing is reasonable (Vs widely optimistic claims).
I’ve just got back into MARS: the chart isn’t clearly pointing in either direction TBH but the regular big buys for the past two days have stood out for me.