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I see that 2 directors have today between them been granted options on MARS shares for almost 82,000 at only 44p.
Not setting the bar very high is it ?
FD
As the Yanks say, hindsight is 20/20
Quite right Barchid. The Old guard ( us) have better knowledge and memory of the way Marstons have been managed.
Even though there were signs Andreas would be a " new broom" , am yet to be convinced.
Hope I am wrong, but cannot see the SP returning too 100p anytime soon, which makes the Platinum offer fantastic.
Hindsight is a wonderful thing
Ref Supermarket beer sales...
From Hargreaves Landsdown website today:
GROCERY VOLUMES EASE AS SHOPPERS LOOK TO MANAGE SPENDING
(Sharecast News) - Grocery volumes eased in June, industry data showed on Tuesday, as soaring inflation and the rising cost of living weighed heavily.
According to the latest data from NielsenIQ, total till grocery sales at UK supermarkets rose 1.5% in the four weeks to 18 June, helped in part by the warm weather and Platinum Jubilee celebrations.
Volumes sales, however, fell 5.5% in the same period, as shoppers looked to manage their basket spend. The data also suggested that shoppers were seeking out cheaper alternatives, with sales of frozen poultry up 12%, dry pasta ahead 31% and canned meat up 9%.
In contrast, sales of beers, wine and spirits fell 9.7%, while general merchandise eased 6.1% as discretionary spending was reduced.
Mike Watkins, NielsenIQ's UK head of retailer and business insight, said: "Shoppers are starting to make different choices in how to compensate for the rising cost of living. For some households the way to save money is to buy cheaper products.
"For one in four households, this goes further and includes monitoring the overall cost of their shopping basket. For the 15% of households who now consider themselves to be 'strugglers', almost a quarter of this cohort will stop buying certain products altogether."
Among individual grocers, Tesco - the UK's largest supermarket - saw sales rise 0.4% year-on-year in the 12 weeks to 18 June. Discounters Aldi and Lidl reported larger hikes of 5.3% and 12.1% respectively, while at Iceland sales rose 1.3%.
Marks & Spencer, boosted by the Jubilee celebrations, reported a 3.6% jump.
Other supermarkets reported falls, however. Sales fell 2.4% at Asda, 2.3% at J Sainsbury and 6.3% at Wm Morrison. Ocado Group reported a 6.4% decline, with overall online sales down 12% in the last four weeks.
macq
Just so that you are aware, Carlsberg first announced their intention to "merge" with Marstons breweries was on 22 May 2020, and was cleared by the CMA on 9 Oct 2020.
Marstons announced a proposal by Platinum had been received on 29 Jan 2021 which Marstons rejected (following 2 earlier proposals) & on 11 Feb Platinum announced that they had decidied not to proceed, this offer was at 105p according to a magazine called "big hospitality", so Carlsberg very much were around at the time Platinum made their proposal & our previous esteemed leader, RF, turned down 105p only to see the stock at 54p today.
Clever that, wasn't it ?
Also dont forget that when platinum made the offer carlsberg were not around and didnt own 60% which now includes six national and regional breweries - Marston's, Banks's, Wychwood, Jennings, Ringwood and Eagle - and 11 countrywide distribution depots.
Platinum got the colder shoulder in January 21, when RF was completing, discreetly, the management deal with Brains.
The Brain's arrangement could deter a further approach. Brain's pubs are leased, however after the deal with us was completed, 6 months after, Brains placed their Freehold estate on the market. Not sure if the Estate has been sold.
Yes, MARS looks very yunerable
Indeed, looks very vulnerable at this SP
Price lowest it's been since November 2020.
Lots of potential upside.
Could we see Platinum Equity step in again to submit another take over bid?
FD
Many thanks for such a detailed insight, you have covered all the bases and it tends to show that yet again "Mr Market" knows how to price a stock !
contd,
Transport costs are increasing , Malting barley has almost doubled in price, packaging and wages, well this is at present an unknown, but with inflation running at over 9% the pressure is growing, to say nothing of the huge energy increments.
Something which has been overlooked is the resumption of 20% VAT from April. This impacts on the drink and hospitality sector more than most realise.
All in all the pressures on margins is becoming unsustainable without reflective end user contributions or the Chancellor deciding to reduce end user Taxes.
Barchid, have just returned from a Business trip, taking in Wales, Midlands and East Anglia. Always stay at different Motels/Hotels and try to get first hand info from Managers/ Landlords at the coal face.
It seems location does determine the level of recovery post covid. Barrelage sales does vary. Family orientated pubs which tend to depend on not just passing trade but access by Cars, which in turn is being restricted by fuel costs. Consequently although foot fall has increased the sales generated have not, patrons making 1 drink last. Pubs/Motels close to conurbations where younger drinkers proliferate are enjoying increased sales even though there is reluctance to pay £5-6 a pint.
It is apparent Families are more than ever budget conscious, younger drinkers not so.
It has astonished me the number of Pubs that now have restricted opening hours, many close at 9.00pm. One Publican states the availabilty of staff is an enormous issue. Previous employees, who were experienced and often local, left when lockdown commenced. These workers have not returned because of the uncertainty within the hospitality industry, consequently recruiting good reliable staff, who need training, is a big problem especially when wages have become an important factor in attracting workers.
Looking at the accomodation side, which Marstons have set has it's goal in achieving improved returns, similar problems of staffing are evident, many establishments requiring staff to multi task. This has been the requirement for some years, however it seems to have become even more so now. Consequently I noticed staff are being overworked and mistakes happen. This is not good for the image of individual establishments. I make clear this not only affecting Marstons but majority of other providers. In essence it comes down to good well-trained staff who are valued. I was incensed at 1 Marston's motel, after a long and arduois day I was kept waiting, having pre-booked, at reception for sometime. The Receptionist was running around like a scolded cat, waiting on tables, managing staff etc. I accepted what I was seeing, it would not have been fair to complain to the receptionist. The experience repeated elsewhere, just proves the issues affecting the performance of companies. A company that does not react in a better customer focused manner, will lose business. Whitbread for it's size does seem to have got Premier Inns better organised/managed than most other providers.
Comment has been made regarding the sales output from CMBC, remember Marstons only have a 40% share. Sales through Pubs undoubtedly attract a good margin whereas through supermarkets who often have promotional offers if only to get customers into the store in the expectation they will buy other higher margin products. Buying Hogoblin at £1.50 and less leaves little margin for the brewery, who have the costs of transport, packaging etc.
Costs of brewing have and are rising exponentonally.
contd
giantsquid
Don't forget their debt though.
Could be significant...
Charlie b, are canning problems still an issue ? Variety of cmbc products seems to have significantly reduced in supermarkets.
The area where we live pubs are thriving. The city center is always busy with plenty of youngsters out drinking and partying most evenings. Sales of booze in the supermarkets is also booming - the major supermarkets are always putting beer, cider, wine and spirits on offer and a lot of people regularly take advantage of that. The market is extremely over pessimistic atm in general. All stocks are down, many are in oversold territory, mars and jdw included. We'll see how much lower this will go, but these prices are already dirt cheap.
In the logistics depot I work at for CMBC, we are loading and sending out 80 tons per day, this time of year should be consistently over 100 tons so pubs aren’t thriving as yet
Bootsox
I am also cautious, firstly the margins on supermarket sales are way less than from pub sales, secondly Marstons is strong in some locations (Midlands especially & "thanks" to the Brains deal, now Wales) in some other areas (eg SE England) they are about as rare as rocking horse manure.
I live in London where in general pubs are not seemingly as busy as one would expect in this weather, people work often just the **** days (Tuesday Wednesday & Thursdays) which seriously cuts down on after work socialising so from where I am sitting I don't see a bonanza. Staying home watching Netflix with a few ales from Tesco or wherever is nothing like as good for a brewer like Marstons as full on booze ups in the pub garden. My friends who live on the Welsh border tell me that the local pubs they use are not as busy as pre covid times. FairDealer normally has a good handle on how busy the on & off trade is, hopefully he might be able to update us.
I back up giantsquid pubs in the north east booming with people eating out plus drinking one pub near me makes £3,000 on Sunday a lone all I can say is the people of Chester need to get out more
Tesco and sainsbury recently posted a huge hike in profits. Beer sales in supermarkets are booming. I know this as a matter of fact because I regularly speak to a number of superstore managers who work for these companies. I'm not suggesting beer sales are booming, I'm telling you they are as a matter of fact. And our local city centre is chick full of youngsters out drinking and partying most evenings, particularly at the weekends. Sales of alcohol, both from the supermarkets and pubs are booming and that is a matter of fact.
I shop in a range of supermarkets regularly and have seen no evidence of beer sales booming.
Chester, my home city, a major tourist destination, is pretty dead most nights of the week. Even Saturday night's customer levels are a fraction of pre-Covid numbers.
Folk are undoubtably feeling the pinch and will continue to do so.
Beer sales in the supermarkets are booming. I know several store managers and they tell me this, you can also see it for yourself when you go shopping. And the pubs are full of people drinking. Especially in this weather. Times are hard but it hasn't stopped people socialising, nor will it.
I like that bit, (Very little has actually changed,).
Where have you been customers will all be getting shorter of money , customers will be drinking less and eating less and sales will go down with profits being very hard hit.
The city must think year end results will be bad so the SP could be down to 35p-40p if we carry on like this.
I remember the excitement when the Carlsberg deal was announced - the share price went crazy. The weather's great, covid has all but gone, restrictions have completely gone, pub gardens are full, beer sales in the supermarkets are booming, town centres are full of youngsters most evenings drinking and having a good time.. stocks are being pummelled by the Ukraine situation, inflation, rising food prices etc, but it's almost like the market has become utterly disconnected from reality. Times are tough, times are worrying, but people are largely getting on with their lives..They still go out, they still drink, they still shop. Very little has actually changed, despite all the gloom and doom. At some point stocks are going to seriously rally from these ridiculous lows. We're not there yet but the time will come and when it does, you're not going to want to be out.
Yes great weather for drinking, most other pub shares finished in the blue today, not this one of course. Sp was better when our pubs were shut in Covid, perhaps we need to shut them again and reopen next year lol,
Good drinking weather, and down here in Cardiff a number of big stars in concert which should bode well for Brains Pubs.