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@ Malteaser.
I'm not particularly familiar with the Carling story. I'll have to look it up.
Like you, I'm hoping that Marston's put their hands up and say well yes, this is what happened, (If that was the case) and then come up with a solution to redress the issue which would be mutually beneficial to both sides before it turns ugly.
As you say, fingers crossed.
My initial guess is this will be similar to the Carling saga a few years ago, when the ABV of the product was found to be nearer 3.7, it was all hushed up.
Marstons will quickly be speaking to all its tenants and will find an amicable agreement. The next problem will be, what about it’s Freetrade accounts, they will also be wanting compensation.
Let’s see what happens.
I was expecting an RNS relating to a statement on this matter this morning, but so far nothing.
I'm not sure what to think about this, as on the face of it, on the link that's been posted on here, it does look bad, and could prove to be costly to the company, which of course could be detrimental to the share price. Even more so if legal action is taken against Marstons. We'll just have to see how this pans out.
I've just had a read through some of this. It doesn't make for a good read.
Let's just hope that they can find a solution without causing too much bad coverage.
Malteaser......I have been a holder here for a couple of years and was initially attracted by the very good yield (bought Greene King at the same time). Not sure what impact this will have on the share price but could take it back down to my entry price of 112p. Would top up once quantum of potential claims is known .
That's ok, I only drink Hobgoblin.
This company could be in deep trouble.
Look at this...
Goodbeerhunting.com/sight lines/2019/12/9. Years of lying to tennants
Marstons could be sued for thousands
@ Barchid.
As I say, I only have experience in lending to individuals and not commercial lending, so that's not really one of my areas of expertise.
Regarding food quality, I guess it depends from venue to venue how the food fayres.
I've only eaten in 2 Marston's pubs myself, one at The Greenfinch in Didsbury a few years ago & The Glassworks in Stourbridge a couple of times while visiting friends and found both to be very good. Doubtless there will be a few places that need improvement but that's just the way it can be sometimes I guess.
Trent
You are quite correct but in Marstons case they negotiated fixed term loans on something similar to a derivative contract which is why they have this mark to market loss on their loans in the latest accounts, interest rates have dropped so a fixed rate higher up is costing them.
I had this from RF in an email exchange & of course it is easy to see why fixed rates were attractive to them as their borrowings were so large that a 1 or 2 percanntage rise could have had very serious consequences.
We are on the right road now though, cutting borrowing by selling underperforming assets whilst concentrating on their core business, brewing, has to be a sound strategy.
It is a pity that their food offer is so crummy, that could have hiked their revenue significantly, but you only eat in a Marstons if you really have to.....
*well, I used to work lending to private individuals, and not in business lending so I know that it is possible to make overpayments on those types of loans. Not sure if you can or can't do that with business loans or not, but wouldn't have thought you couldn't.
@ Barchid.
Reducing the cost of their borrowing liabilities has to be a good thing. Maybe if he was to go that little step further by using those savings to help reduce the debt even further also makes sense to me if it is possible to make those overpayments.
I used to work for a bank on the lending team, so I do know a fair bit about this and it is possible to do this.
I understand that business lending works differently to lending to the general public but would have thought that the banks would welcome overpayments from all borrowers, so that they could get that money out working for them elsewhere.
Just my observation of course.
Bam
Looks clear enough.
''Targeting at least £70 million disposals of non-core pubs and assets in 2020, £50 million of which have already been exchanged or completed''
Confess to being a tad disappointed when I glanced over the results, borrowing up a smidgeon on new builds and the pension deficit. However the debt level should start decreasing now and is 2/3 the way there for 2020, with no capital outlay on new builds this year the chances are the debt will come down quicker than expected, as mentioned in these results but not the interims. (That I saw)
Good to know some capital spending is going to update the existing portfolio.
After a slow start the market seems to like it.------Hope that's not the kod
As I say, I've not had a detailed read through all of it as yet, I had just had a read through some of the headline points while giving our boys their breakfast this morning. Probably not the best time to go through something as important as this. I'll go through it properly in more detail during the day to get the bigger picture.
I get the point about not being sure about where the £70m of disposals. Maybe they've identified a number of poor performing outlets to offload. If that is the case, then perhaps it might be sensible to get rid of them, as long as they can find someone to buy them and make these pubs pay their way for them.
As we all know, debt here is quite eye watering, but on a positive note, it does seem to be reasonably well managed, and Mars do seem to be reasonably smart enough to have come up with a strategy to chip away at it, and still be in a strong enough position to maintain divvi levels.
I'm sure I've mentioned this before at some point, but a good few years ago I was in PFD, and they have/had similar debt levels to ourselves, but they've not paid a divvi for years.
@ Bamps, RE: my bathroom, yes, I'm almost there with it now. Had the technical surveyor round on Sunday gone to price up how much I'm gonna get stung for fitting all the new stuff we had to buy. £9k in total for all the new stuff & fitting. Ouch!
I'm beginning to understand now how the fat kid at school used to feel when the bullies used to nick his sweets at play time now.
Trent
I agree, the loss on their mark to market of their fixed rate loan agreements was a bit tough though, if that says anything it is that the new Chairman was wise in going for a reduction on their borrowings ?
Hi Trent
Hope you got your bathroom straight.
The report wasn't that good in my opinion. New builds last year pushed up debt a bit, be glad when they stop them.
The remark about 70m of disposals confused me, after the sale of £45m worth of assets does that mean there is more to come.
£1.4bn of debt is huge reduction of 200m just a drop in the bucket
Why not have a share offer to existing shareholders and get the debt down a bit
ATB:))
I agree - the headlines don't look brilliant - mainly due to the disposal pubs being well below stated value + the swaps loss & pension reversal.
The all important actual cash flow however remains strong.
Below this the concentration on debt reduction, which many have stated is required to remain viable, has been fully grasped, with good initiatives to draw out the poorer pubs, and replace new builds with more spending on the current estate.
They seem to have some good initiatives like a constant 5 year plan to keep all pubs consistent and up to scratch etc, + new wins in brewing.
It's not going to be a dynamic investment for a few years, but I believe they are showing good category management, and depending upon the price you bought in at, the dividend yield compensates against it sitting in a bank account.
Not read all of it yet, but doesn't look too bad what I have read.