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Barchid
But with book value at almost 3x the SP, there’s plenty of room for error.
Quickdip
"dont see how one could lose here" is true assuming that buyers pay book cost or higher, but if you look back to an attempted pre covid sale, when things were a lot brighter than today, their Pitcher & Piano portfolio could not be sold even at book value.
Look it up in their accounts, you'll see it.
How keen are buyers now for licensed premises is what you need to ask yourself, surely ?
I’m investing with a long term view, in the underlying assets. Unless they’re going to be sold off for 35% of their value, I don’t see how one could lose here. A good one for the patient investor.
Market do not appear to agree.
The NAV stated , one would think shrewd investors would be clammering for stock priced at almost a 300% discount. Something is wrong. The result of Lenders waiver agreements extended to 31st March may soon reveal what is really going on. If however any investor is certain to double even treble their money, pile in, but always remember never invest more than you are prepared to lose.
AIMO Dyor
This is a good long term hold with a book value of £1.02 per share with no goodwill on the balance sheet and producing decent profits. Seems a shrewd business decision to get rid of any non performing sites and pay the debt down.
Peaky the company has been systematically disposing of assets for sometime. The JV with Carlsberg was an asset disposal. The current sales Agents, Christies, have stated certain interested partys including the Admiral group, who have continued to pick up Marston's cast-offs. As you correctly say assets sold cease to produce income and profits. It is clear Fubders have become very nervious,so asset reduction will only reduce debt which as many of us have stated for a while, is the time-bomb that will sink MARS. There is one man to blame imo, he has moved on and rewarded with an accolade. Quite amazing,
Think they have quite a few assets to sell, but how quick to sell them??
Less assets, less future revenue?
Can see this broken up and sold very cheap. Gla
The Market does not appear impressed with the Duty reduction in August, possibly it is realised the recent retail increases are more than the reduction.
Starting to sell assets, that's not a business doing well....
From August, alcohol taxes in pubs to be 11p in the pound lower than the rate in supermarkets.
Great for draft sales and demand for those making the drafts to sell in the pubs!
FD
Shocking to hear that about those pubs, old and poorly sited I can see the reasoning but not as you have laid out, there appears to be no reason other than to dance to the Carlsberg tune.
What a shame for those involved. A 1% or 2% movement up or down in GBP is neither here nor there, & like their energy costs were, should have been hedged.
barchid astute investors will be analysing the sale of 61 pubs and not the affect of currency movements, which good CFO's will have hedged to avoid uncertainty.
The sale of pubs is rather more important as it seems asset reduction is needed to pacify Lenders.
It seems Marstons (Banks) heartland in the Black Country is being decimated. Some pubs have been marketed before Landlords are advised, having discovered through the local media.It is difficult to understand the rationale being put forward to sell some iconic and well sited properties. The Mitre Oak close to Stourport and adjacent to the A449 is and has been a well patronised Pub. The Crooked House at Himley is another which has just had 1000's spent on Major maintenance, many others fit the "Local" that some here have regarded as money pots. Clearly Marstons Execs do'nt agree, why? Many patrons in the Wolverhampton area are perplexed in particular the apparent disappearance or hard to get Banks brands. It is summarized Carlsberg is systematically removing some well-known brands. They are past-masters at it.
Marston's 40% share of the brewery is likely to go, leaving just a reducing Estate of Pubs. The Brain's estate was a bad decision and could be the Millstone around the company's neck. Marstons are tied into a 20year lease agreement on properies which required serious maintenance/repairs. The Brain's estate adds nothing too Marstons assets.
Shareholders can get value from a takeover as Debt will continue to be the anchor that could eventually sink the company.
Lets hope a White Knight appears.
SC
Why not save time & just say "Marstons are cheap today, cheaper than yesterday" ?
Usually helps Marston's imported raw materials costs. (however they are hedged anyway). Looks like Fed will have to re-visit its rate hikes scenario too - so will help sentiment for UK GBP comps.
Thanks Mac
As you say definitely afew surprises amongst those up for sale.
Anyone can see the full list of the pubs for sale on christie and co website,its under the name of "project aramis"
justaquickone,,,,,,express &star,i think its a wolverhampton local newspaper,
reportedly it will make Marstons £40m.
its natural consolidation of their locations, this is the sort of aggressive moves we need to increase profits:
https://reactnews.com/article/40m-marstons-pub-portfolio-to-quench-investors-thirst/
Mac, where did you find the list of pubs being sold off.
Cant find anything on the net ?
having looked at the list of pubs for sale,they dont realy look like the "back street boozers" i expected on the hit list,these look like big money earners ?
I’m in my 50s, no mortgage, reasonable amount of disposable income and there are plenty of others in my position. Would I go to Frankie and Bennies? No. Would order a takeaway online to be delivered? No
Would I visit a pub for a decent pint of beer or more and consider decent pub food? Yes.
Therefore, if I’m happy spending my money in proper pubs I imagine others in my age bracket will also do this. The sp may not rise in the next few weeks but in my opinion it will outperform the savings rate a bank provides in the next year.
considering the Restaurant group has also just announced they are reducing sites shows that this is a sector situation.
facts are these are tough times, however as has been seen from sales data, its the very top end and cheap product and services being cut back by consumers, marstons are safe that they sit in the middle of the consumer spending axis.
Marstons are premium enough that people will buy them to show off, and cheap enough that every person can afford them.
Bullish for Marstons, now the fight back to fair value starts!
Dear dear, Marstons selling 61 pubs, details of which are yet to be published. Now either those pubs are not profitable or some other reason. Wait a minute, Christies are saying they are successful and have shown resilience through the economic problems of recent years. Best tell that to the 100's of Landlords who have given up.
Now if the 61 pubs are as good as Mr Moffit states, this will make a dent in Marstons profits and make the £1billion sales harder to achieve.
The consideration received from the sale will be very useful to reduce debt which is stubbornly stuck even after the cash recd from Carlsberg. That £273m seemed to disappear, debt was not reduced.
The likely scenario behind the sale is as predicted some weeks ago, Bond holders have given short term waiver extensions. Loan agreements have been breached. Those waiver extensions are until 31st March 2023. It is logical to conclude, being between a rock and a hard place, Marstons have decided to liquidate properties to satisfy Bond Holders.
The barley issue is old news, I know Growers/Farmers who have been growing specific Varieties for Carlsberg for at least 10 years.
Karl a few days ago you mentioned C&C and then later, after I had provided info on Magners, Bulmers etc, you stated it was a different company. I did ask for qualification and am still waiting. Your admirer seems to think there is confusion, clearly not from me as you subsequently stated to holding CGR ( the Lse code for C&C Group). It would be good if you can put your friend right.
I was aware some weeks ago Marstons had sold their prestigious Head Office in Wolverhampton and moved to a less salubrious block nearby. Have today learnt that block is rented, which would have released significant equity.
Here is the report from a Local Correspondent in Wolverhampton who knows more than most about Marstons in the City
""Bit of a mystery what is going on at W&DB.. aka Marstons. Brand new HQ built and the staff moved out to a rented office. Selling off the family silver... The business was built on small pubs... """
Investors please do your homework .SC it will lessen your confusion
AIMO. DYOR