Firering Strategic Minerals: From explorer to producer. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Do8erman
Intersting points you make, especially how the 40p level seems to show resistance, something I've noticed myself & interested in.
WRT being misquoted by charger, I fear this is a peril of the board for all of us, he assures us he is still in profit but his post on Sep 9, when he was showing us all the size of his cojones, clearly states that his larger holding cost 41.994p and a smaller holding at just below that.
Happily no other poster bothered to join in this peculiar game but it might explain how these specific price predictions are arrived at.
Astute Investors are aware of the significant headwind the whole hospitailty sector is facing, not just Marstons but each and every Beer House, Motel chain, just read their recent reports. Some are more resilient than others due to low debt levels, foresight to raise funds earlier this year. MAB, Whitbread and Fullers are well placed to pick up distressed pub/motel outlets.
Just over a year ago it was clear MARS debt pile was becoming a concern, hence a virtual fire sale of PUBS to Admiral at a significant discount to Book value. If as seems likely the price Admiral payed was regarded as fair-value, what impact does that have on the Valuation of the retained properties? It is well known Commercial Properties are being re-valued downwards. Against this background it is reasonable to believe our estate is not worth what is currently stated within the accounts. By his very actions RF clearly accepts, otherwise he could be culpable of poor management.
Faced with an unmanageable debt level , clearly the arrival/approach from Carlsberg last November was a God-send, it offered some relief to an over-borrowed position. The JV agreement was thrashed out before the impact of COVID, which has changed the whole hospitality landscape.
It is an illusion to believe the actions of one and probably other, competitors, will add greatly to the benefit of others. It may have a minimal effect which will be spread across other providers not just MARS.
Speculation that the JV and other events stated, will enable MARS to increase staffing levels is pi in the sky. The very purpose of this and any JV agreement is to reduce costs, basically Human resources, which ultimately produces bigger margins.
The JV should be analysed in conjunction with the historic validated numbers and projected returns into the future.
In essence in return for £273m, in total, Marstons and Carlsberg will combine their various Breweries and Distribution facilties in a New Company CMBC ( Carlsberg Marstons Brewing Company). Marstons will retain it s Pubs and Motels.
Marstons will have a 40% share in CMBC, generated profits will be distributed pro rata. Have done the calculations previously and to retain the status quo, profits made by CMBC will need to grow by 22% in the 1st 5 years of the Agreement, for Marstons to just standstill on known values. Marstons Brewery profit growth has never exceeded 3%pa
Marstons intention is to pay down debt with the receipt from Carlsberg. The company then intends to focus on providing operational excellence within the pub and accommodation business ( retained assets). The company intended to spend £90m in the current year on capital items ( enhancements, new build ). The funding of a programme forwards is yet to be fleshed out, it is difficult to see it coming from profits........shareholders could be waiting some time for a return to the dividend list.
Currently the SP is under-pinned by the last published NAV , likely to be downgraded.
Do8erman:
There is logic in what you say.
Can you however explain why you think it will hit the lows of March even though the situation is not as dire? Do you not believe that these concerns are priced in already? If it drops further, I think this may only be slight and very short lived before it reverses. There is far more hope now with COVID seemingly milder and vaccine in the picture and there is the JV element.
The biggest issue here is people in government who think that leadership means sounding sweet. Payback time will come soon and the masses as usual will have to pay for the meal they had.
S.C... In the face of 79 Greene King pub closures, 800 job losses, Scotland pub closures and the rest of the UK due to go into some sort of lockdown come next Monday - you are still saying that the SP is going to be 73-100p. Not me, don't misquote me please I haven't said its coming back to 70p, all I said is IF it goes to 28p-32p area then it has potential to recover - to what is unknown, but i'd expect to 45-48p should pubs and restaurants re-open after a lockdown period in the run up to Xmas - but at present its still very risky indeed, especially if covid goes on longer than expected, and pubs and venues stay closed indefinitely from next week. It all depends on your end game/how long you want to sit on these and your risk tolerance I suppose. If I was invested here and in profit, then I'd sell at 40p and get out Thursday, solely because I'm more risk adverse than some and profit is profit and I wouldn't want to risk losing any gains made, especially if I can then use those profits to buy back in lower and increase my holding if I were to still believe in the stocks recovery long term. Out of interest as you are still stating this is going to 73p-100p regardless of all the negative facts stacking up.. when exactly are you forecasting this SP for? next week, next month, next February, 5 years time?.. if you are going to put yourself out there and share your thoughts on where you think the SP is heading (quite specifically - 73p), please tell us all when. You have previously quoted these SP forecasts many times over the past few weeks/months, yet the SP is still struggling to go beyond 40p, and the rest of the week/next week is likely to see this slide further if logic and current sentiment be applied. I may be wrong and overly pessimistic, we'll see I guess. But, I am very interested to see what period of time you are talking about to see an increase of 83% in the SP from Wednesday, to your lower estimate of 73p and an increase of 150% to your 100p higher estimate, surely you have to agree that this sounds overly confident for any share in this sector inc. MARS for the foreseeable future.
Do8erman - I am still in profit here and will not be selling as I will have to watch my gains for the year. Whats the point anyay if as you have said it is to come back up to 70p? I am not in any rush. In fact if it does go down to 30p I will be buying some more. The only time I have to think about selling any shares is usually in the new year where if I do have any running a loss I can sell them to make the most of any other gains from annual sales. Fortunately this is not one of my largest holdings and I do not have to sell or raise money for income. The way my luck goes if the price was to fall as much as you have said I would not be fast enough to get back in when the price turns if I was to sell any. I will hold and top up as and when required. By the way I read yesterday the European commission were looking into ways and discussing if the time is right for finding a quicker way of fast tracking the Astra-Zeneca Oxbridge vaccine - so we may not be long before a life boat comes along for Europe. Also think about the fund managers they will see any further fall as a good longer term opportunity to buy some more for growth. However good luck with your own choices.
regardless of the cma decision, this will hit 30p before it hits 70p its just common sense, get out whilst you can and buy back in lower in 2-3 weeks time, nothing that is currently happening in this sector is helping MARS or others and there is only one way this SP will be heading short term. this wont help tomorrow will it...
Greene King to cut up to 800 jobs and shut 79 pubs and restaurants
neither will the announcement that ALL pubs and restaurants will be under tighter lockdown restrictions in scotland as of friday, with the central belt - i.e west coast to the east coast inc. glasgow and edinburgh will have to close entirely for however long nicola says - no end date in sight, and those outside the central belt will be allowed to serve alcohol outdoors only - in the rain and cold in mid october, thanks!. and then only for very limited hours, people will just not bother at all and stay at home.
couple this with N.I set to follow similar measures as scotland have imposed this weekend.
and the rest of the UK to have a new plan and restrictions in place in 5 days time, with a partial or complete lockdown of much of northern and central england inc. major towns and cities, manchester, newcastle, liverpool, leicester, nottingham, leeds etc.... how many MARS venues exactly will be closed indefinitely then?
greene king annouce 79 pubs to close with 800 jobs lost, will MARS follow suit with pub closures and job cuts - it's highly likely.
this is and remains a very high risk stock at present, come back next week if it drops significantly on the above news and further lockdown restrictions, then perhaps worth a punt on recovery from 28-32p range. DYOR
Agree Griffith. I can see a very shrewd move here by Ralph Findley to expand with exploring opportunities such as the JV which will help Marstons post Brexit. I can see what he is doing and it will work if passed. I also see the share price rising and expect it to be as I have said on many occasions on this board approx 73p (just above your forecast). However I also see this share going over £1 a share once a vaccine is out and available. It is good to see a fresh face on here and whereas other Companies are reducing staff if the JV is passed for Marstons actually see more staff being employed in Marstons establishments due to a greater wider variety of Beers/Lagers from the JV from the two founding Companies being Carlsberg and Marstons. If it works why should not other Brewers also join the JV Later & who knows perhaps this could be a way forward to save the industry?
I thought there would be some more hype leading into the CMA decision on the 20th, with this not being mentioned at all am I missing something here? I am hoping the CMA allows it to proceed and prices jumps according 60-70p range?
Thanks for the Scot Gov link but if you look under the heading in it, "central belt area", it is exactly as I said was, & still is, on BBC site.
However, as I said before, with only 22 (from MARS website) premises we have dodged the bullet on this one.
Nevertheless a post is worth nothing if it is inaccurate & incidentally the Central belt in Scotland has both a west & an East side.
Am very happy to converse on MARS but why must you always drift off the subject ?
Stick to Marstons & please try to be accurate. We use this board so we can all swap views, which need accurate facts.
You may wish to view the amended BBC Scottish requirements, etc different rules apply to Food and Alcohol sales and take aways to keep the hospitality sector open. Restrictions in restricted areas are also limited in time. See link to help your trip :-
https://www.gov.scot/news/new-moves-to-stop-covid-19-spread/
My wife and I were fortunate enough or unfortunate enough how you look at it to see Mrs Sturgeon live and so you need to listen to her whole diatribe to be honest.
However when are you looking to drink in Scotland anyway? By the way Glasgow is on the West coast and Edinburg the East and they only account for 18 establishment of the 1400 in the Uk. Shipyard Low tide is worth a try which can be ordered from Tesco's.
I took my information from the BBC website which clearly states "ALL pubs & restaurants in the central area are to be closed" goes on to say which places are affected & then"pubs & restaurants in other areas can stay open but can only serve alcohol outside".
As the Central area includes Glasgow & Edinburgh, unless the beeb is wrong (not for the first time) no pubs or restaurants are open. The D Telegraph says the same/
Where did your information come from ?
Barchild - Alcohol is still being served in those establishments where they have an outside facility up until 10,pm. The restrictions are in place in certain areas for 16 days as the Scot govt appreciate the risks of a full closure as does the Uk govt. In fact there has been talk yesterday and additional assistance to the hospitality sector in general. However as has been said even in Scotland the trend is to drink more at home in recent years in any case. Fortunately also Marstons now sell some very fine alcohol free beers. I myself enjoy those to offset too many years working in the City!! Doctors orders!
Problem is that where the restrictions apply includes Glasgow & affects 3.4 million people.
Not sure about you but I can't see many Glaswegians going in for a bottle of Evian water, but as I said yesterday we apparently only have 22 premises in all of Scotland so it is a dodged bullet at present.
The fear is whether our esteemed masters in Westminster decide to follow suit in Manchester, for instance.
I honestly doubt there is very much margin in supermarket sales compared to wet pubs so we have to hope the worst will not happen in parts of UK where Mars has a good presence.
SP still testing 40p as a support level, interesting to see what develops now.
Pubs / Bars can serve food non alcoholic drinks indoors 6am-1800pm. Outdoors Alcohol can be served up to 10pm curfew. Local restrictions as deemed necessary will apply, BUT even in the five areas that must shut -takeaways can still stay open.
Per Sturgeon -Scot govt. deeply grateful for all the work the hospitality has put in with their own safety measures. Restriction indoors for 16 days only.
Not as bad as many had felt with hearty thanks for those in the hospitality sector in the hope the hospitality sector can stay open throughout winter. Home drinking will continue and increase IMHO.
For discussion. Pubs for Marstons show less reliance on total sales as more and more move to home drinking. The key is distribution (not just to the pubs) but to the off licenses and supermarkets and other retailers. However as has already been said by RF if other businesses fail the JV with Carlsberg allows the Management of the PUbs to be concentrated and benefit from the Marstons increased market share. I can see them taking on more staff not less. In fact perhaps the 800 Green King staff if that is what is being said should send their Cv's in to Marstons c/o RF post JV. Marstons pubs business is to be run post JV as a completely separate business to the JV which has already stated its new management structure. The venture will actually benefit the pubs (who will also sell Carlsberg products) and in time more staff will employed as more beers are served.
YoYoMa, considering your synopsis, Marstons are faced with a huge conundrum. Once the JV is completed,possibly within the next 2 months, hands are tied in respect of the condition where they must retain at least 50 % of PUBs.
The SP is already being effected by what could be a contagion within the Hospitality sector, so the probablity of closures will be factored into the SP.
Very much doubt Martsons would make such a fundamental error as announcing something like redundancies so close to an approval date and release of Q3 figures. If jobs had to go then this would be put off till after the 2 big announcements as not to absorb the depression in the current value.
To close Pubs with over 800 job going. Will Marstons follow suit?
Interesting discussion points for those who like a discussion :-
https://www.marstons.co.uk/docs/reports/2019/on-trade-beer-report-2019.pdf
Pretty sure the Scots who like their pint of heavy -know where the supermarkets are. I wouldn't worry about that too much.
Looks like cask ales were removed from Scotland some time ago (May 2019 pre-pandemic)moving over to keg, but all there beers are freely available in the supermarkets. I didn't realize they had over 5,000 CAMRA members there however who were upset. Maybe they should last year and prior have been buying more beer to have kept it alive than writing letters of complaint? Use it or lose it. .
See link:-
https://www.morningadvertiser.co.uk/Article/2019/05/30/Marston-s-pulls-cask-ale-from-Scotland-pubs
D Telegraph is running a speculative story this afternoon to the effect that Sturgeon is to make an announcement Wednesday pm to tighten restrictions and likely close pubs.
The good news is that Marston's website shows they only have 22 premises in Scotland, so little effect there.
Unsure how active they are in sales from their breweries north of the border but my gut is not very, so that is hopefully a bullet we dodge.
To be honest, I first bought Marston's at 53p, which was an absolute bargain, but ended up selling as pubs weren't even open then. I bought back in at 41.5p, this really is just a waiting game. CMA can't really rule against the JV - wouldn't make sense to. Even without the JV, prices are going to go back up eventually. If you're after a quick buck, I suggest you get out now. For those of us that are willing to wait mid-long term, this is going to be a very prudent investment.
Finally some share chat and good info...
I first bought marstons during pandemic as a LT hold as i saw an option for some cheapish buys... However one of the things that attracted me to this over other similar 'risk' hospitality shares was their relatively minimal inner city trade (esp in London). IMO the location and way people work has been changed forever in this pandemic... Lot's of marstons pubs are in towns and city commuter belts which should be able to attract more customers if we assume people will still wish to frequent pubs in the future (just instead of with work colleagues with friends in their locals pubs).
It will be a rocky road but locations of pubs that Marstons has was a bit positive for me long term.
All IMO and I could be very wrong.
@Kahuna
I am also keen to converse re MARS, I recall you posted recently about how bad trade was for pubs in the square mile.
The only MARS property there which I am aware of is Pitcher Piano Cornhill, which is a great location and nicely furnished but always, I felt, let down by its food offer. However I see that between now and next Thursday they have 3 "special nights", 2 are speed dating evenings and the other is a "paint London" night. Also they are now rather optimistically offering food via deliveroo. Now I am delighted to see a pro active stance by management in trying to put bums on seats, but 3 special nights in the next 6 is probably indicative of just how bad trade actually is at present.
I fully realise the P&P's are not the typical Marstons boozer but they were up for sale last year in the debt reduction attempt and failed to achieve an acceptable price. If trade is this poor what is their value now I wonder, WFH seems to have hit city centres more than we suspected it would.