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I don't think I will be selling this share in fact might join the ranks of the US banks who own 5% of preference shares in Marston's and this by the way Mars 321p is up 9% today. Pretty sure it will not be long before we have a suitor after Marston's here and it could even be Carlsberg (who knows) based on the fact they have recently announced increased beer sales!
This is just a waiting game for the starting gun in my opinion.
Some points to remember regarding sale of assets.
The JV agreement with Carlsberg requires Marstons to retain at least 50% of the Freehold Properties.
Marstons have sold a number of un-profitable Pubs. These Pubs are in locations which are/have been easy to convert given the appropriate Planning Consents ( Change of Use etc)
Other pubs may be redundant and capable of conversion to Residential use. A few will be subject to Historic protection and although not impossible to overcome would present expensive solutions. Marstons have a considerable number of purpose built pubs/hostelries which may prove difficult to change use.
The property market, like many other sectors is going into territory not experienced since the 1980's. Large House builders/developers have made a halt to any further property purchases. RF as Exec of a major House builder will be fully aware or should be?
The emergence of a cash rich predator will weigh up all factors. Asset-strippers want to turn a buck quickly and will not wish to be exposed to the uncertainties that are stacking up, exchange rates and otherwise.
If the SP continues to fall, as seems likely, shares will be picked up by a predator. Talk of 120-140 is for the fairies. The company is still, and will for a period of time, suffer from the baggage left behind by Ralph Findlay. His successors have their work cut out to get the company back on to a level where Shareholders will again recieve a dividend.
I agree. Marson's is definitely a prime takeover target. It ticks all the boxes that private equity like. It generates cash (with substantial potential for cost cutting to enhance cash generation - massive value to be had there), it has a huge property portfolio with the overwhelming majority of properties owned freehold (massive easily realisable value there. value that would be multiples of the current market cap), and an established brand with a long history.
The problem is, would Private Equity at this time be prepared to pay 3 - 3.5x the current share price? so something like 120 - 140p ? I don't know. Best bet for Private equity would be to buy up shares on the open market and then go for a hostile takeover.
Don't understand the fall to be honest when Marston's on their last release said Beer sales were up due to the hot weather, and they had also hedged their Gas and already a contract in place for their electric so their costs are contained for this coming winter at least and into 2023.
Still see this 180 year old firm being under pressure soon to try and defend a t/over unless the Management soon release an updated trading "summer holiday statement" to reverse the sentiment. Foreign investors must see this as a snip!
Even with the nice warm weather and all pubs operating it looks like we are heading to covid levels of 28-30s,difference is that then all pubs/warehouses were shut and the only income made was from the canning and bottling lines selling beer straight to the supermarkets,soon the warm weather will change and even that income will dwindle,i bought my shares pre covid and watched them rise and fall,mostly fall, but still holding on and drinking !!
Platinum made 3 increased offers in December. the last being 105p. Shareholders were not consulted, RF had other fish to fry ( Brains). That must sound like a man who was a hybrid Fishmonger and handled offal.
Property values are going into the unknown with the coming recession. Maybe the Glazier Family would be interested once they have sold Man U?
Sorry for the joviality but this share could make some cry.
There was an approach at near 100p i think about 12-14 months ago. Marstons turned it down saying it undervalued the company! So a bidder would obviously need to bid higher to stand a chance.
Must be tempting for a number of Large cash rich Companies at the moment particularly from the USA with the currency rate being what it is tonight to see a share price so cheap for a British Company with so much history and tradition when also considering a very cheap purchase for a large number of properties too. I would expect to see an approach very soon when we are now at 41p even the GBP debt will be cheap for an American company to pay off!
Historically in periods of Economic down-turn/Recession, Food and Drink sectors have been resilient to financial drag. We seem to be coming into a different climate where those essentials are being significantly reduced. Time was when the younger generation spent on drink without a care. Reports that under 25's are and have become more health conscious turning to Non-alcoholic beverages is not what retail pubs want to hear.
According to Barclays consummers are restricting eating out, many are patronising the high end eateries.
As Barchid states the increasing cost of a pint does little or nothing for Landlords whose fixed costs are increasing exponentially, margins being squeezed into negative territory for some Beer-houses.
The one small glimmer of hope, no doubt enhanced by the fabulous weather, supermarkets are moving large quantities of drink. This is fine to a point however the margins allowed Brewers by the big retailers, are small.
Like our weather, hospitality businesses will have been enjoying the relative sunshine, financially, and now should be prepared for the storms ahead.
AIMO
saxman
The Sun is hardly the FT, that's for sure, but an article in todays currant bun about cost of beer in pubs is hardly likely to help sentiment.
In London they say/predict another 6% rise in a pint to as much as £8.48 by next Spring.
Sure that must be in a posh pub but even in the average boozer in London you can struggle to find a pint under £5.
These increases might be OK for brewers but no good for a chain of pubs & we now only have 40% of the brewery business and are heavily weighted towards the pub portfolio.
As ever dyor
Hoped this dog was on it's low point, but looks like it's heading towards the 30s, phew !
May be in the south up north we are partying large
Interesting report from Barclay today. The spending profiles on credit shows a definite change in consumer habits now the consumer is becoming cautious because of the cost living issue.
Consumers are viewing bank account more frequently.
Consumers are returning to in-store shopping, reducing online.
Consumers are spending less on Socialising, particularly eating out. This,Barclaycard, observe is significant when viewed against the unusually good Summer.
Thanks Supercharger.
Tightening of finances could boost staycation numbers and hot weather will almost certainly flush customers out to the Beer Garden. But what do I know? DYOR & GLA
I think I will start buying on the dips with this one! In time Marston's will be making an announcement I am sure. GLA
Bloomberg put up a flier today that Carlsberg have announced increased Beer sales and an upgrade for future results. I wonder if this will filter through to the Carlsberg - Marstons Joint Partnership where Mars have a slice?
Just had a meal (with my 30% off voucher) at the Paisley Pear with a group of friends. I was very impressed, food was great, liked the choice of food available and the staff were brilliant, friendly and attentive. They place was busy, inside and out. People will still want to go out for a nice meal but maybe something cheaper like a Marstons. The main subject of conversation was bills going up, electric, food, petrol but everyone thought the Marston food was good value
Alot of young families are busy buying up houses as soon as they come on the market and are now prepared to take expensive mortgages to get on the housing ladder at any cost.. together with high fuel bills. Noticed also many city centre pubs busy weekdays and weekends (during the day..) particularly with the grey haired population, So there's money out there, just depends where people want to continue to spend it.
IMHO It's tricky to guess which way sales will go but people who like a drink will carry on drinking. We may have cheaper drinks or buy Marstons bottles from the supermarket ; Pedigree, Banks's, Hobgoblin. The colder evenings might draw in customers to pubs who don't want to turn on their lighting and heating, especially with free WiFi. I'd imagine young families with rising bills probably never spent much time in the pub anyway. Just my musings - DYOR.
Sold this before covid for 1.17 thank god and awful Restaurant Group too, these types of companies are doomed, owned originally for divi but thats ancient history, just glad i rescued my capital, huge debt and the U.K. facing economic meltdown and brexit wrecked sterling sucking in crazy inflation. Buy US growth.
All costs are raising sharply, staff, food & drinks as well s energy only so much you can put prices up before you put off customers.
It’s going to be a tough winter….
Only energy costs mentioned in last week’s trading update, but a long article in today’s Sunday Times shows that all costs for pub operators are rising very sharply. Might be in the share price already, but you never know with small caps...all news, good or bad, seems to come as a big surprise.
Yes, the fish is often very well cooked. A pint of 61 Deep, or Sunbeam also goes well with it !!
Marston's have decided that the two for one brand is to be dropped at all their participating pubs. the brand had served its time and was slowly helping to push people to other outlets. A slow decline affecting staff moral. It was sad to see managers working so hard to keep faith with so many mountains to climb in recent years.
Last week my local Marston's restaurant introduced their new menu and hopefully a new beginning.
The menu has good clear choices, the specials board is gone which I would imagine is to reduce the costs and enhance the quality of the food served. There is now a much needed weekday lunch menu which is served until 4pm
We attended yesterday and had the main menu fish, no sorry, Atlantic Cod and chips and the difference in quality and presentation was there to see. At £11.50 each we thought it was a good price for such a nice meal. Followed by the Rock Road Sundae which was a very nice desert indeed at £4.75. (even better with the shareholder discount:)
The beer/lager served has always been very good and if you can find a better pint of San Miguel anywhere, I would be surprised.
The staff and new general manager and chef were on top of the game, with some nice touches and top notch niceness too.
Great to see and renewed hope for the future.
FD
Thanks for that, it is odd that the Brains pubs are not highlighted in their accounts as it does make analysis against 2019 before they were taken on very difficult.
Without being overly cynical I have to think that they are not highlighted for a reason, but of course that is only my guess.