Firering Strategic Minerals: From explorer to producer. Watch the video here.
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Nice little tick up today on warm weather Sentiment! interestingly Unfair trader comes here with negativity and rubbish statements of how the board went around conducting their own values which were wrong, when they employ professional qualified people to do it for them. How long would it take to go to Scotland and Wales and then to the whole of England to look at and value 1400 sites? Rubbish. Statements alter too where he has repeated said previously he is an investor as he likes his discount vouchers. I suggest an audit for those who don't hold shares and still have use of the vouchers. For the Company the values of the Estate have been proven to be conservatively valued where the Management have said that those sold recently for more than book value. So what do we feel will be the values for those that the Company wishes to keep that are far more profitable?
As unfair trader has his JCB out I am happy to answer my godfather left me some money (but no shares) but no doubt all of his shares would have been left to my Aunt (my God mother) and his two daughters. My own shares I have bought myself and have been adding to recently, building them up which I feel is very wise considering we have an NPV share value in late 90p's AND one thing my Godfather did say to me was what a great company this was. He was very true and upright a military man which is why I have been drawn to Marston, as well as some other great British Companies that I have respect for. I am only pumping this share as we need to see a balance to the negativity and incorrect statements. Anything I say can be found on the Company web site statements. GLA, DYOR but beware of Unfair traders statements which contain inaccurate accusations likely to upset the Management are surprising from someone who appeared previously to enjoy his discount free voucher- for being an investor-perhaps this needs looking into as would you want to be drinking with someone so negative. It would drive you to drink! Mind you he would help sales, ha.ha!
Read the following statement issued by the Auditors who qualified the 2019 accounts,
Now apologise
""Valuation of the estate (notes 1, 4, 11, 12 and 18) – Group
and Company
We focus on the Directors’ annual assessment of the carrying value
of land and buildings because properties are a significant item on the
balance sheet and there are complex and subjective assumptions used
in the valuations, including the future expected financial performance of
pubs and the earnings multiples applied. A full external valuation of the
estate was undertaken during FY18.
In FY19, management have undertaken an exercise to identify if there
have been any impairment triggers or changes in value such as a
change in market conditions or a fall in the trading results of a pub or
segment. Other factors considered relate to property based transactions
both within the marketplace and the Marston’s estate, which could
indicate changes in the carrying value of the estate. Management have
noted such triggers and have recognised a net impairment charge of
£69.2 million, of which a net charge of £44.6 million has been recorded
in the income statement and a net charge of £24.6 million has been
recorded within the revaluation reserve within equity.""
Here is a simple math:
Gross Property value: £2.111 billion
minus:
Long-term borrowing £ 1.561 billion
Net Property Value: £0.55 billion
But the current company valuation (@ 31p/share) is only £0.197 billion, so you are paying only ~ 1/3 of the net property value, this is remarkably crazy low price. Even if the management has been a bit optimistic, it is still a bargain.
On top of the unbelievable discount on the property value, the company can generate over £60m free cash flow, so in roughly 3 years, the company will double your investment!
I don't understand why there are investors who are willing to buy those Marston's pub properties at 25% over book value, the more sensible way is to buy the Marston shares which can effectively own the Marston pub properties at 1/3 of its net value.
Disclosure: I have been buying Marston for the past 6 months.
I think you are looking at old debt, and since the last debt review Marstons have reduced debt by about £80m:
"Leisure analyst at Shore Capital Gregg Johnson points out that net bank debt stood at £183 million at the end of September 2022 while total debt including securitisations and long-term property leases stood at £1.21 billion."