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It's a catch 22". They can only sell so many Pubs otherwise be in breach of the JV with Carlsberg. Sellins Pubs may release capital to be taken by Funders, but then income will decrease, making it harder, if not impossible, to achieve Sales target of £1b.
A rights issue could be the solution, however at current SP levels difficult to get away. MARS should have conducted a funding issue 3 years ago when both M&B and Whitbread did so. That was a time when funds for the Hospitality sector was comparatively easy against today
Roll on the rights issue! It’s the only way out of the debt trap without selling lots of pubs
I am not in the same league as many commentators on here but I do have the advantage of age: I have commented previously on here about the effect of inflation on debt and how inflation erodes debt. I lived through 25% inflation in the 1970's, and saw how a house would be sold for the same nominal value as a year previously, but in reality was 25% cheaper.
First, this company is not trading at a loss and there is no reason why it should not continue to increase sales short of another epidemic or everyone suddenly becoming teetotal. Therefore the key financial points are revenue, debt and net assets. On net assets this company is worth three times more than the shares are presently worth, and my reckoning is that the valuation of the estate is probably an underestimate. Pubs tend to be large buildings and with large car parks, and while I personally hate to see a watering hole closed and its premises converted to flats and development, as an investor this is a reassuring thing. A share worth less than 1/3rd of a companies asset is a no brainer to hold.
On debt, the high inflation rate of 10% in the last year has seen this eroded in real terms by some 10%. The repayment of loans seems low, at about 30 million, but inflation has seen it eroded by far more.
Take the 22 and 23 figures. 2022 Debt 1560 million, 2023 debt 1529 million. Revenue 2022 799 million 2023 872 million.
The ratio of debt to revenue for 2022 is 1.95. In 2023 the figure is 1.75, with only a token reduction in actual debt. This is against a background of an increasing financial squeeze on Consumers.
Like many I cannot understand why this share price is fatally wounded by good news, but despite my age I really do understand that long term means long term. My timing for my initial tranche was perfect - about a month before the first lockdown. I am not an idiot but I am happy to act as a consultant in share recommendations: Whenever I buy a share, despite my research, the price falls out of the sky. Marston's may well be better managed than it is now, but I am prepared to wait.
Agreed very cheap!
Any re-funding will be at the behest of existing Banks who already have the company on monthly watch following breaches of covenants.
It is to be hoped Justin Platt will instill a new direction, something I put forward 3 years ago
Lejib
Precisely !
Funny thing was that it took our midnight rambler till almot 04.00 to think that one up, perhaps his mind was slower as a result of the extended slurping time ?
I believe the reason for the artificially deflated share price is the anticipation of debt refinancing in the city, which, reading between the lines, seems necessary by 2024 Q2. Once the refinance occurs, I expect the share price to significantly increase.
The board have possibly also recognised the need to change direction, hence the new CEO appointment. So, remain optimistic and consider buying now – as the saying goes, "be greedy when others are fearful."
"Just read the official releases and ignore anything else. "
Yes, like the share price.
So we have most Stock Brokers and Analysts now saying Buy. The Company accountants suggest the NPV for this share is worth over £1 with prop values in excess of 2 billion twice that of debt and the share is currently on the market for 29.75p, a bargain. The shorters will want this even cheaper hence negativity. Do not sell your shares and this share will recover very quickly. Christmas is already booking up on last year. Just read the official releases and ignore anything else. IMHO, DYOR, GLA.
Are Investors to ignore the £24.5m valaution impairment highlighted by Christies who have conducted on site valuations in July? Christies are now commisioned to value 1/3 of the estate each year on a 3 year rolling basis. These valuations are correcting the inhouse desk top values previously in place during and shortly after Ralph Findlay's term in office. True values are now being undertaken, or are they to be dismissed in favour of the Accountants you favour?
No doubt the values were better in 2013!!!!
I see this share as another buying opportunity going forward where the NPV per share is over a pound from qualified accountants and auditors where the chairman has said we will expect a re-rating on property values in the new year.
If the Company is expecting growth and is producing large amounts of free cash from now through 2014 then we cannot expect the values to suffer. A great opportunity in my opinion.
Anyone who doesn't even know what decade they are living in must have serious issues, especially when they lecture everyone else with their "knowledge".
Is this "he's behind you" joke that you re rehearsing for the innumerate at your'e Pantomime?
Looking forward to the end of 2013 where Marston refers to a Christmas bookings uptake, and growth into 2014. With "back to a billion for sales" being what the Chairman is aiming for, where free cash is being produced and debt is reduced by sales or non core assets, where values are being found in excess of the previous share NPV. The accountants have valued the share NPV at just over a pound from being previously below.
Oh Lordy Super Puffer, has it never ocurred to you that brokers analysts are paid to promote stocks ?
Also their vocabulary needs reading carefully, neutral is usually a polite word for a sale, a buy normally means neutral and a strong buy is a real buy.
Brokers who suggest sales are bottom of the list for corporate deals.
If you would like any more education, like the (was it £164billion ?) debt on their balance sheet Vox were talking about on youtube at lunchtime I suggest you read Benjamin Graham, he might help you.
Meantime happy slurping this evening....
Broker Recommendations for Marstons (MARS)
Date Broker Recommendation Old Target New Target Rating Type
11-Oct-23 Shore Capital Buy - - Reiteration
23-May-23 JP Morgan Cazenove Neutral - 54.00 Reiteration
16-May-23 Shore Capital Buy - - Reiteration
16-May-23 Peel Hunt Limited Buy - 75.00 Reiteration
24-Jan-23 Shore Capital Buy - - Reiteration
07-Dec-22 Deutsche Hold 44.40 44.40 Reiteration
29-Nov-22 Shore Capital Buy - - Reiteration
02-Nov-22 Shore Capital Buy - - Reiteration
27-Oct-22 Deutsche Hold 50.00 44.40 Reiteration
12-Oct-22 JP Morgan Cazenove Neutral 59.00 54.00 Reiteration
11-Oct-22 Shore Capital Buy - - Reiteration
28-Jul-22 Deutsche Hold 60.00 50.00 Reiteration
27-Jul-22 Shore Capital Buy - - Reiteration
25-May-22 Deutsche Hold 65.00 60.00 Upgrade
18-May-22 Shore Capital Buy - - Reiteration
11-May-22 Deutsche Sell - 65.00 Reiteration
03-May-22 Deutsche Sell - 65.00 New Coverage
12-Apr-22 Peel Hunt Limited Buy - 120.00 Reiteration
25-Jan-22 Shore Capital Buy - - Reiteration
19-Jan-22 Peel Hunt Limited Buy - 120.00 Reiteration
17-Jan-22 Berenberg Bank Buy 120.00 120.00 Reiteration
11-Jan-22 Shore Capital Buy - - Reiteration
05-Jan-22 Berenberg Bank Buy 140.00 120.00 Reiteration
30-Nov-21 Shore Capital Buy - - Reiteration
30-Nov-21 Peel Hunt Limited Buy - 120.00 Reiteration
30-Nov-21 Liberum Capital Hold - 90.00 Reiteration
03-Nov-21 Liberum Capital Hold 100.00 90.00 Reiteration
14-Oct-21 JP Morgan Cazenove Neutral 95.00 85.00 Reiteration
13-Oct-21 Shore Capital Buy - - Reiteration
13-Oct-21 Liberum Capital Hold - 100.00 Reiteration
29-Jul-21 Liberum Capital Hold - 100.00 Reiteration
28-Jul-21 Shore Capital Buy - - Reiteration
23-Jul-21 Peel Hunt Limited Buy - 125.00 Reiteration
06-Jul-21 Peel Hunt Limited Buy - 125.00 Reiteration
06-Jul-21 Numis Add - 9,600.00 Reiteration
22-Jun-21 Shore Capital Buy - - Reiteration
20-May-21 Liberum Capital Hold - 100.00 Reiteration
19-May-21 Shore Capital Buy - - Reiteration
19-May-21 RBC Capital Markets Sector Perform - 105.00 Reiteration
19-May-21 Peel Hunt Limited Buy - 125.00 Reiteration
12-May-21 Liberum Capital Hold - 90.00 Reiteration
07-Apr-21 Liberum Capital Hold - 90.00 Reiteration
01-Feb-21 Shore Capital Under Review - - Reiteration
08-Jan-21 Shore Capital Under Review - - Reiteration
09-Jun-20 Peel Hunt Limited Buy - 95.00 Reiteration
18-May-20 Berenberg Bank Hold - 50.00 New Coverage
27-Jan-20 JP Morgan Cazenove Neutral 132.00 128.00 Reiteration
27-Jan-20 Citigroup Sell - 80.00 Reiteration
24-Jan-20 Shore Capital Buy - - Reiteration
10-Jan-20 RBC Capital Markets Sector Perform 120.00 130.00 Downgrade
You obviously cant offer assets like bricks and mortar to settle outstanding trade debts , they generally only come into play on a forced sale basis which is what is now occuring. Dividends will not re-appear for a long long time , if ever and cheap sales that recently occured im a certain supermarket , only go to paper - over the cracks!! Personally, I am so far underwater that it is pointless selling ! Poor Board, Poor Gameplan, Poor Share !!!
Loan costs are beginning to hurt. Interest swaps have created a loss of £20m before tax. This maybe a one off, however loan debt of £1.5b must be maintained. Total debt is recorded at £1.5B. Loan debt before Leasehold liabilities amounts to £1.15b, which is a decrease of £31m against 2022. The aim to acheive £1billion by 2026 presents a good if formidable target., but still too high for a company of this size.
Resuming dividends are a distant wish for those who came in at much higher SP.anyone who says "who cares" should remember those long suffering shareholders.
With a NAV more than 3x the existing SP, the time was when Asset strippers would be crawling all over this stock, but for some reason it has not happened.
The Directors are at least prepared for possible further economic torpor. Read their "Going Concern" statement .
Unfortunately another bad set of results and still no divvie, can't realistically see anyone wanting to buy these.
Super Puffer
Hargreaves, the astute company which backed Neil Woodfoed all the way down to oblivion, if you follow their advice you may well meet the same fate as their other investors.
Surely even you can do better than that for a reason to puff, or are we going to have to wait for your "Midnight Rambler" performance again ?
My apologies to Mick Jagger of course...
After an oustandingly average set of results, are we to believe that this super investment, that to all knowlegdable commentators is worth over £1.00 each share, will soon begin to show an amazing turnaround in fortunes and explode upon the share scene despite debt, debt, debt, and a potential 10% hike in minimum wages just around the corner ???
Behave yourselves and admire the falling share price ATOW £0.297 !!!
Which is why Hargreaves said mentioned today "The evolution of the company's pub portfolio was marked by market outperformance, with its predominantly freehold pub estate and limited exposure to city centres continuing to benefit from consumer lifestyle changes"
So not so sure they agree with you Mr Wolf!
Yep, price is close to Covid times when they were all shut.. why are they bothering to operate if the sp hardly differs from pubs trading and when closed. Sell the lot.
The business reported revenue increased 9.1% to £872.3m (2022: £799.6m) during the period, with total retail sales in the group’s managed and franchised pubs for the 52-week period up 9.8% on last year, and like-for-like retail sales for the year as a whole were up 10.1% versus FY2022. Underlying operating profit excluding income from associates was £124.8m (2022: £115.4m). NPV now over a £1 a share. Must be a venture cap.opportunity here soon! Note Prop value well of £2billion despite disposals and re-value in the new year where disposals are greater than book values.
Adeg1,,got to agree with you on this one,it seems no matter how good the results are,and how many chances of, extra public holidays,record highs in weather,energy bills hedged,change in directors,this share price is still close to record lows during the covid era when not one pub,club etc were open and trading,