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HC
you are all over the place.
Lets be clear. Marstons will still be involved in brewing, as the 40% owner of the largest brewing operation in the UK , so your ''now that Marston’s have got out of brewing'' is nonsense.
Doze, Yes you are right, but it’s a big cultural shift, they are now “junior” partners in the brewing side. My point is they now have a tenanted and leased business, which for them is now a side show ( and ready for sell off), and a managed business which though largely freehold (as you say) is also mortgaged to the hilt...and they are not the best managed operators! The brewing side were the jewels, what is left is lacklustre...but they are not the worst. Now they are a pub property company, look at Ei, GK, Punch, if you want see what’s next...
Hoolicat; Marston's are not out of brewing they are trying out a better managing system out of which they can wriggle if it goes wrong. I think as a mainly freehold business Marston's will come out of lockdown much better than businesses that have leases to pay.
Also FD I have seen over the last year that you have been a genuine contributor, unlike some guesswork contributors who think, for example, that dividends will be back up next week! Debt will continue to be the critical factor here, despite the cash back from the brewery sale...and that still has to get voted in and get though MMC, which is likely but not a given.
The analogy is that Marston’s have successfully got into a lifeboat...and short term it is a great opportunity, (but then so are MAB, JDW, WTB over then next 3 weeks) but there are better long term pub ships to sale on now that Marston’s have got out of brewing. I have invested in MARS for a long while and I have strong connections with this company, the move out of brewing is a seismic shift which still needs evaluating over the coming months!
I expect the managed pubs to improve their offering when managers do not have the brewing to manage aswell. Return from the JV - 90% of free cash flow to be distributed so 36% to Marston's should be very good with synergies and wider market from combining outlets. Unless something derails the JV they have 10 years of implementation before revisiting strategy: IPO or carry on as normal.
Hoolicat glad you said that not me as I would be considered negative. Have tried to point readers in the right direction.However good the deal with Carlsberg, and there are short term gains, ultimately once the Major shareholder has brought in efficiencies, which may take 2 years, the autonomy of the unique and individual breweries will be centralised. This in itself will achieve significant savings, human resource reductions, distributions savings etc
The creation of CMBS as a private company leads me to think, it will be floated at the appropriate time.
Traditionally Marston’s have been a brewer with pubs, it has had three key revenues, it’s breweries/free trade, managed pub income and tenanted/lease pubs with rent and tied margin. It has been a source of pride in that it has acquired and kept intact several breweries, such as Ringwood and Jennings, But this income stream has only been 20% or so of income. Marston’s effectively selling it’s brewery is a fundamental change of its traditional character, though not necessarily a huge profit impact. So the sale represents a huge shift in culture... do not under estimate how much of a Culture shock this will be to employees and it represents a “nothing is off the table” change going forwards. So what is left is tenanted and leased pubs, about £30 million a year in profit...currently under severe pressure, with an average of 11% ROC on NBV of property...(pre-Covid) and could well be on the table for a sale to Admiral or New River. Them Marston’s would be down to just its Managed house/New build Managed house division. In this market it is woefully out matched...either in the value cheap dining market where there are far better offers, or the quality beer/dining market where it again is it out-gunned by independent offers. In the short term Marston’s is a great opportunity for a quick 70p to £1 run as pubs open, but medium term the company is going to get broken apart...the brewery sale represents the death bell within the next year..IMO and do your own research!
resemblance of creditably for the recent influx of Gob****es on this board must go to the post from nathm @ 11:28 today:
"Where do you see the share price moving to Claire?
My personal opinion is £1 when the government officially announce pubs are re-opening, but with a low mcap still this could be north of £1.50 in 3-4 months."
As my grandfather used to say " 2 pints of pi$s in a pint pot"
as mike down the road says "go big or go home!", now he might have been talking about his boyfriend or that guy he has his eye on; either way hes right, know what you are investing in what potential there is and when to get out, or keep liquid and cash in hand ready.
can see big things for this, and expect the big institutions and funds to pile in as alcohol and pubs sales will be far higher than shops, and with holidays abroad on hold or limited then having a beer or wine in the pub garden will be the best plan for most of UK even if its in a different town.
Have a great weekend all, and get ready for the ride to the moon. (yes i will invest in space X if that ever goes to market)
Trade Time Price Quantity Bid Offer Buy / Sell* Deal Value Trade Type
Jun 5 2020, 16:35 69.60 1,754,418 69.55 69.60 Buy £1,221,074.928 UT
If the JV goes to plan in the next few years I can see it being floated off, with the Mars. SP moving north big time.
well lets look at the numbers and landscape.
Firstly, the pubs under Marstons are "safe" compared to other free-holders, and Marston cash flow required to put in place the C19 precautions and other factors to ensure they can open and run sooner and wider.
Secondly, now they have merged with Carlsberg you will see less competition between those 2 brands, and consolidation of costs, these means better profit margins and strength in the market. Also more access to international markets to sell alcohol in supermarkets etc... and also exporting the marston brand and pubs to other regional locations.
thirdly if you look at the share price it was at its lowest in the 90's region and very stable for a long time prior to C19, as such getting to this point by the end of the summer is easily capable. (of course no guarantee DYOR). And by the later part of the year can push much higher.
fourthly, yeah as anticipated the pubs will re-open soon, looking at what the brewers are saying and other sources in the next few weeks, this is only a small amount of time to wait.
Even i the pubs ae slow, people are still going to buy alcohol for home and outdoor usage. the summer is only just starting and britain wants to party.
Over the weekend i expect to see a lot more around this, let's get ready for the rise!
Where do you see the share price moving to Claire?
My personal opinion is £1 when the government officially announce pubs are re-opening, but with a low mcap still this could be north of £1.50 in 3-4 months.
Government announcement has been requested by 13th June (by the BBPA & brewers). This will give time to restock, contrary to popular belief it is not brewing that is the issue, it is supply chain and the removal of old kegs in cellars to make way for fresh stock.
4th July is being mentioned for reopening by various Marstons pubs: https://www.facebook.com/TheSpreadYork/posts/1439781649561547
https://www.facebook.com/thecornerpinyork/posts/1117113718660237
Yes spikem is correct with the 4july
Subject to covid obviously
I've just been in Norwegian Air, have just sold my shares after making some good margin and have moved over top Marstons again. (check my other posts to confirm).
Why?
Because the price really has only gone up a small margin since the Carlsberg merger news, and the UK is only now starting to open for Pubs and outside drinking. The UK is ready to get outside an enjoy free movement.
the price on this has very good potential to move up a lot more.
The MM know this and there is some tree shaking happening.
through 70 now
I heard 4th July and interestingly, I am a tree surveyor by trade, I was at a small local brewery in Norfolk yesterday surveying and they are not as yet receiving orders however my mate who sells coffee to pubs, hotels etc had first meeting since lock down at another local brewery with multiple pubs so they are gearing up.
I am hearing June 15th is the possible day ? 10 days to go then ? is that realistic or is End June most likely . which ever way it goes this will impact positively on the SP . GLA
70s today possibly.. And keep at that level
Dk2020
The market is up and down atm because no one has a clue. Look in te Crystal ball very cloudy atm.