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Looks like Jim Mellon hit the nail on the head, by the date of that interview he was probably responsible for a lot of this run up.
Well done all those who held their water when Tesla man gave his reasons for changing his mind after he sold, they are within spitting distance of his initial 73p target today.
Sorry it is moneyweek not web !
Nov 5 it is dated
A moneyweb youtube of this week has Jim Mellon saying that he believes pub companies are oversold & that he has been buying Marstons. This is just after 13mins into the video.
Well worth watching as he is right far more often than he is wrong
@Fairdealer.
You raise some valid points. It doesn't matter if anyone's POV is popular or not to me personally, if it's a reasoned view that can be backed up with a good rationale, then it's still a good point of view.
Barchid,
Having debated the debt level for more than 2 years, going back to the days of high Dividend payments, sooner or later debt must be addressed. When compared with others in the sector, even >>>Spoons, Marston's balance sheet is not so robust.
Mr Marmite ( Tim Martin) maybe a siren, but even though they have strenghtened their balance sheet, serious concerns from the "Coal-face" is echoing what many already know.
I recieve circulars from Marston's individual hostelries ( where I stay from time to time), and just 5 days ago was informed a particular Motel had closed due to the 2nd lockdown. No mention of a takeaway service etc when other establishments closer to me and not Marstons are operating takeaway service ( did so through the 1st lockdown). Is Marstons missing a trick??
Sales (Income) may decrease, debt will not without fundamental action. Whether or not Bond holders agree further waivers in 3 weeks time remains to be seen. IMO they may well require undertakings that some replacement Funding is raised. We will see, cannot see Bond-holders continually approving waivers without some fundamental undertakings.
AIMO
FD
As usual an incisive critique which I find hard to disagree with.
Debt is an issue , especially the valuations of the properties on which it is secured, hence the 2 alerts yesterday. It is possible they might find a different route, selling off headquarters for instance (which I believe were quite recently expensively refurbed ?), but I see nothing that can really stabilise them like a fund raising exercise. Martin's comments on @Spoons pubs yesterday in the press, although full of his usual bluster, does give a feel for what life is like on the front line & it seems pretty grim to me, particularly with rising unemployment and higher personal taxes being mooted.
Nevertheless for LT holders the situation looks better this week than last, by quite a stretch, thankfully.
The reduction of rents whether temporary or otherwise will reduce income and in consequence the ability to service debt, which in turn makes a fund raise more likely..
RR are in a unique position with the Government's Golden Share which gives PI's considerable comfort. Of course depending on individual's exposure, the RI was virtually impossibe to reject. As here many have done very well in recent days with the bounce back within Markets. As in most markets some win some lose. The maxim being the market is the transfer of money from investor to another.
The question still remains, " how will Marstons fund the Operational Excellence for the Pub and Accomodation Business"?
I have just taken part in the RR Ri and they are in a dier state compared to marstons. That will take a lot longer to recover. I believe when lockdown is lifted and hopefully not entering another one with the virus levels levelling as it stands pubs and restraunts will be filled for a while as we have had such a miserable year and a lot of people will still not want to travel abroad hence money spent in UK with people enjoying themselves.
@fairdealer
Understand the debt issue but it is serviceable especially with the 240m just recieved. Along with increased online sales im sure they can westher the storm. Agreed may be more likely if this was going to go on for another year but in reality it won't. If a RI was on the cards there is no way they would have let the landlords of all establishments off 10percent of their ground rent either.
Trent
Realise my views on a RI are not popular. Just analyse where we were and where we are.
The historic debt pile has reduced through the JV, we still have debts around £1.1Billion. We are yet to know the true impact of Covid on profits. I suspect even though sales since the end of the first lockdown have bounced back, we do not know how profit margins have come out.We were hearing a lot about the growth in supermarket sales, but as most suppliers will testify margins are wafer thin...good for consumers but not producers.
As yet there has been little or no hard figures for the lockdown, it is reasonable to assume they are dire. Now we are into another lockdown, hopefully not as severe as the first, but still impacting on profits.
The company have ambitous plans to focus on operationally making the retained estate places of excellence. This will require funds. Where are those funds to come from, further borrowing or direct funding?
The Company accept there is uncertainty for the forseeable future, so unlikely funding will be available from current profit generation.
How will the programme of estate improvement be funded???
In response to Hads comments, suggest the financial history is reviewed. The company had debts of £1.3billion at the end of the last financial year. Endeavours were made to make in-roads. Pitcher and Piano deal failed but a sale to Admiral completed at a considerable discount to book value. Carlsberg come along and forge a deal, a dam good deal for them, CMBC is created as a separate Company which Marstons have a 40% share. Carlsberg would have been aware of Marstons financial position which no doubt enabled a good deal for them. The Brewery assets have been transferred to CMBC and there fore any belief Carlsberg would have been concerned about Marston's can be dismissed.
As a point of interest Molson Coors have just sold one of the oldest Brewery's in Burton for in excess of £100m. The site is to be redeveloped. It is highly likely with the amalgamation of Carlsberg and Marston's Breweries closure of one or more will happen within 3 years.
For a start carlsberg wouldnt have entertained the merge if they felt Marstons would be in anyway in financial trouble with worst case factors allowed for. With the news of the all but confirmed vaccine and multiple others within earshot this is no way the worst case scenario. More likely to be seeing 75 plus after lockdown, pubs re opening.. the good old brits getting very festive ploughing through lots of Hobgoblin with view to a very positive 3/4 of next year.
@Fairdealer
Hi mate. No, I don't see us being in a position to do buybacks for the foreseeable to be fair.
Equally, I'm starting to think that a RI seems unlikely as well atm to be fair. I don't see the need for it because a) they've just completed the Carlsberg deal, so they have money to pay down debt, also, b) they've said that they also have cash on the hip to keep things ticking over for now. There is no immediate requirement for additional fund raising. The banks are not breathing down their neck for payments. Just my opinion of course.
there won't be a right issue! Absolute crud people see on this chat.
Trustnet is by far the quickest of them all, I use them as they seem to be 3-4mins ahead of LSE. Also Trustnet is more than just RNS it also shows the very latest from GlobalNews wire. When Pfizer released the news it took a few minutes to hit the BBC SKY RT etc however at 1145hrs when it was released I was reading the announcement.
link for those who would like to use it than rely on slower platforms.
https://www2.trustnet.com/Investments/TNUK/LatestAnnouncements.aspx?limit=-1&pno=2264
i am new here and just wanted to know what the chances are of a rights issue being raised as i am starting to get a little nervous on whether i should sell my shares or just hold on and hope there isnt a rights issue.
thank you!
YoYoMa
Many thanks for posting both the rns' today, it is now nearly close of market and we still only have the one showing on this website.
The missing one is also that with most detail, as well. Given the hiccups on LSE it has not been terribly impressive this week, I must start getting mine from Trustnet as they seem better organised.
Meredith sorry to hear of the problem/dilemma you and your daughter are dealing with. I tend to agree with Pitterpatter, your husband may well not be happy. It is a tricky one and hopefully you are able to get some better information from your husband.
Your husband may have bought these shares on income grounds...MARS were paying an excellent dividend until the beginning of this year, so there could be any number of issues to consider.
I agree and disagree with turnpan, just be careful what information you choose to consider or disregard.
Best of luck
My husband has good days and bad days when it comes to remembering. He hadnt logged on since July so we're only now just starting a journey as we found out purely from chance. My husband has early stages of dementia and has been advised not to carry out any transactions or telephone purchases without the presence of myself or Linda my daughter. He made the large tranaction in March from an account we rarely use so at least now we have visbility of the amounts involved. I would like to thank everyone for their quick support and I appreciate that though I am a stranger to you all I am very grateful. We took the action of getting an advisor to speak us tomorrow on the computer video and the legalities as I wasnt aware we're not supposed to log into his account albeit in ill health. I wish you all safe times and once again from us both thank you
Meredith, please do not act on any advice given here (yes I know that is advice), people are guessing. If your husband cannot make decisions consider when you need the money from the sale of these shares. In the long term (5 years) shares will outperform cash in the bank even with a rights issue.
It’s probably worth asking your husband what kind of price he was looking for before making a decision. I’d be hella annoyed personally if I fell into ill health and then found out family members had taken it upon themselves to start selling off my shares without consent/authorisation. Generally the market will react quickly on news either way however as he’s holding theres a very good chance he has taken certain factors into consideration already so it defiantly wouldn’t hurt to ask him if thats a possibility.
Thank you for your reply and I am learning alot already. The shares are already invested by husband who is going though some periods of difficulities with health so my daughter and I are picking up this and have also requested some support from HL who have yet to reply. There is a large number of shares and after reading the posts that is where our uncertainty came from. As long as the Rights Issue has to be approaved then at least we have a chance to withdraw before the dilution starts, am I right in saying this or overnight will the just becoem diluted when we next log on? We are going through many you tube tutorials, awaiting HL to pull their finger out, and reading a lot of forum boards. Thank you for your guidance.
A further scenario which could assist a Buy-back could be further Asset disposals. I would not be surprised to see MARS share in CMBC being reduced in 2-3 years time.
Trent, correct, although Buy backs are dependant on a strong Balance sheet. Can you see this for Marstons in the foreseeable future?
There is always the possibilty of a Placing, which in my opinion is not favourable for Ordinary Shareholders
There is some dilution yes, as there are more shares in issue. That said, as per a previous post of mine on this, this should over time level out. That said, listed companies do have the option at a later stage to conduct buy backs, where, as the term suggests, they can buy the additional shares back and take them out of circulation, often they are held in treasury, which means they lie dormant and carry no dividends etc, etc.
Should a RI materialise, it's structure has to be approved by shareholders. It would be rare to see a Rights issue which may or not be Underwritten fail to achieve the funding required. If Underwritten, and this is probably the reason a 2nd Broker was brought in earlier this Summer, it would definately succeed.
The Company and it's Brokers will be establishing whether or not a Rights could succeed without the Shareholders taking up their Individual Rights. In other words Brokers agreeing to Underwrite provides certainty. Not forgetting PI's not taking their Rights will dilute . Rights can be sold as Nil-paid, which in essence means a Right will have value for the existing Shareholder.
Rolls have just completed a huge Rights which was structured in such a way that existing holders would see an enormous reduction in their capital asset should the Rights not be taken. Rolls issued 10 new shares for every 3 held and priced at 32p. This made a massive reduction initially to the share price...it has now recovered significantly, due more too current events but never the less a healthy increase for trapped PI's.
Meredith, respectfully suggest you do more fundamental research into whatever Company you are investing...it can be a minefield.
Golden Rule....never invest more than you are prepared to lose.
GLA