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What has happened to Supercharger ? the doyen of all things impossible, the great ramper who knew absolutely nothing
and yet exoled us all
to get involved in a desperatly stuggling business that still owes £1.18 billion in debt and is desperatly hoping for a miracle
to save their skins. Behave all you shareholders who are still involved ( like me) and show your contempt for a board that has screwed your money , without a thought for the consequenses - i bet they still draw their inflated salaries though - You are paying for garbage !!!!!
Shap
''to get involved in a desperatly stuggling business that still owes £1.18 billion in debt and is desperatly hoping for a miracle''
debt was higher pre pandemic with a share price of about 130p
Starting to move up.....increasing revenue and asset backed to the hilt....great bargain....Should double in quick time....
NAV currently at about £650 million
current market cap about £207 million
Longtime
Debt was higher pre pandemic & interest rates were an awful lot lower then than they are now, thus encouraging growth.
Pre pandemic pubs were open as usual, during & post pandemic they were closed/open in restricted hours.
Businesses were growing pre pandemic, now they are trying to grow back to what they were,
I can list a few other points but I hardly feel it is necessary...
Bar
''now they are trying to grow back to what they were''
precisely , and that is what Marstons will be doing. It was the pandemic that hit the industry very badly indeed. 29p back up to ? in a timeframe of X.
NAV currently at about £650 million
current market cap about £207 million
Marstons should be receiving good income from its 40% stake in CMBC in the coming years, which when set up the stake was worth over £300 million (a lot more than the current Marstons market cap).
Share price was at 130p pre pandemic.
https://www.proactiveinvestors.co.uk/companies/news/1029437/could-marston-s-shares-be-worth-130p-one-broker-thinks-so-1029437.html#:~:text=Shore%20Capital's%20investment%20case%20for,(Carlsberg%20Marston's%20Brewing%20Company).
Debt can also get eaten away with inflation
Interest rate on debt at the start of 2009 was at 6.3% - I believe the current rate is a bit below that
Net debt as at 4 April 2009 was £1,296.9 million paying 6.3% interest.
Today interest rate is a little lower and debt level is lower
Inflation of 10% in the last year effectively reduces the debt by 10%, a lot more than the company is repaying.
Longtime
"interest rate on debt at start of 2009 was 6.3%"
BofE base rate was 0.5% in March 2009 with a further fall to 0.25% in August 2016, (having falllen from 5.75% which they were in July 2007).
They moved up again to 0.75%.
Then with covid in 2020 even more QE occurred so yes as I said "interest rates were an awful lot lower than they are now", MARS problem was they locked in some debt at high levels, with hindsight beimg 20/20 at precisely the wrong time, & to compound that error failed to pay down other, floating, debt before covid when business was good & rates were low due to QE.
Thus MARS is now saddled with huge debt in a business sector which has proved less than stellar.
Bar
''BofE base rate was 0.5% in March 2009''
? and?
what has that got to do with Marstons
https://www.reuters.com/article/uk-marstons-idUKTRE50C1Q420090113
There are some quite astonishing suppositions sprinkled with sarcasm.
As at the company's last published accounts Liabililties ( debt) was over £1.8 billion. Even when interest rates were fixed and lower, the company did not keep up repayments and breached Loan agreements not once but TWICE and now lenders have agreed waivers and put the company on a quarterly review
Could the bright spark confirm lenders have reduced the Capital Debt by the inflation figure?
Millions of mortgage holders will be interested to know, it would be a huge relief.
The company has consistently liquidated assets, selling selling Pubs, even the sale of the Brewery was to raise funds to reduce debt.
The problems go back a long time, Ralph Findlay's management. The existing management is a continuation of RF's style. The company needs a change of Leadership, people with inspiration and flare.
Inflation of ten percent is a reduction of debt of ten percent in real terms.
So in your opinion the total capital debt owed by MARS has decreased by more or less £180m.!!!
I do'nt think so. If I take out a loan of say £100m it stays at that amount until repayed.
Inflation is a measure of price movements ( Wholesale and reatail) and not connected to to basic loan debt.
FD
Indeed you are 100% correct, if debt was inflation adjusted the UK national debt would be rather insignificant.
But we all know it is not. Debt is debt & we are aware MARS has too much, hence its shares trade like option money at present.
As for longtime taking 6 posts between 20.17 & 21.04 on Thursday to argue about MARS debt & Findlays crassness in locking shareholders in to some debt on high interest suggested to me that perhaps he could have been enjoying some of Marstons finest, not that I would blame him for that as I am most partial to their beers myself, but posting whilst "having fun" is less than ideal.
On a more serious note what was your take on the trading update, my first read was that it was relatively encouraging but the fact that they have not indicated where the property sales were compared to the book value leaves me fearing we have taken losses, indeed there are so many ex pubs for sale in my area of London that they appear to be "offered and not bid", some have been empty for over a year now. Not Marstons area, I know, but not a good read on the market in general, for sure.
Barchid,
Posters arrive here without a complete knowledge of MARS history. Whether any of us like it or not management decisions of the past affect a company going forwards. It could be good or in MARS case bad. RF was focused on enlarging the Estate through borrowing but forgot to take account how Pubs have gradually and consistently become unprofitable, consequently closures continued at an increased rate, especially since Covid.
Shareholders need to understand under RF's watch not only did debt escalate, he agreed terms with Brains to manage a bunch of run-down pubs that required serious maintenance, his discreet rejection of Platinium's offer ( exceptional against today's SP) and his curtailment of Dividends which many of us valued ( I remeber Trent's comments each time the iv was due). THe list of Findlay's discressions is considerable.
Trading updates are only a guide as to how income has increased(decreased) against previous records. This trading data fails to provide any meaningful detail of Profits which we know will have been impacted by the increased input costs. These costs effect every Hospitality business, however sector company's use the same method of presenting Trading reports, which to me is clouding the true state of affairs, especially with a company, any company, that has over borrowed. It will be the full yera's audited accounts that will dsiclose the real state of finances. It is all very well Anreas predicting increased profitabilty in the next fiscal year. Maybe his crystal ball tell something the market does not see??
You are right, the sale of Pubs will determine how book value is translated into actual value. There is no mention of how well or otherwise Christie's have managed to move the tranche of Pubs listed back in the spring. I know of several PUbs, close to Wolverhampton, that have been closed and boarded up for almost 2 years, some Marston's Houses.
Redevelopment of Pub sites can be fraught with Planning issues. Developers in the current climate are reluctant to take unnecessary risks.
Everyone had their chance to unload this shxt at 100p or thereabouts, I think I got out about square at 107, no brainier to get clear, it was a vile share to own but tbh brexit basket case U.K. listed shares are all dire since 2016 as capital outflows have been massive ever since, nobody to buy the shares and now anything with huge debts is toast as rates will now be higher for years. It writes itself, this is another AA, will be taken out for pennies.
Bar
''FD
Indeed you are 100% correct, if debt was inflation adjusted the UK national debt would be rather insignificant.''
You have completely missed the point. First of all government debt isn't fixed - 99% of the time it will increase year to year. The crucial measure for government is the GDP/debt ratio.
Someone purchasing a property 20 years with a 100% interest only mortgage for £50,000, would now find that due to inflation, with subsequent increases in income that debt would now be insignificant compared with 20 years ago.
Basically if debt is fixed and inflation/income increases then that debt as a measure against income decreases.
Marstons should over a period of time be able to pass on inflationary increases in prices, whilst at the same time maintain/reduce debt levels..
P46
''Everyone had their chance to unload this shxt at 100p or thereabouts''
Yes I made a sale at over 100p on 5th Feb 2021 - unfortunately it was only about 15% of my holding at that time.
Last bought on the 6th this month at about 27p.
i have plenty of patience waiting for a good improvement in fundamentals.
BTW P46, you post nothing but doom on a number of boards, with everything being siht - what a sad person
Have not missed the point just correcting the misconception that Inflation decreases primary debt. You agree it does not. Another poster drew a comparitor if that were the case National Debt would eventually disappear, assuming borrowing remained stagnant.
Land and Property have always been assets that add value over time. There are certain exceptions to that general rule as 1000's will recall when Residential values plummeted in the 90's and borrowers were in negative equity.
THere are numerous classes of Property, Residential, Commercial which in turn are broken down into further classes. Commercial includes industrial, shops and Pubs. Values attributed to those Commercial classes can and does vary considerably. Take Pubs which may be Old buildings and subject to Historic Grading that protects against any structural alterations. Other Pubs are subject to Planning conditions which can, not always, present significant obstacles where re-development is involved. The point being values on Balance sheets often over state what a willing Buyer is prepared to pay.
The point regarding the effect of Inflation on debt basically relates to increased values of Income and costs.
Income has increased by some 11.6% however costs have at times during the period increased exponentially earlier in the period just reported. Fresh food increased more than 17%.
Look at other metrics within the sector....ratio of assets to debt.
MAB...2.3x
Fullers..3.2x
WTB......1.99x
Spoons..1.66x
MARS......1,5x
Marstons are bottom of the league, something asutute Investors, not Traders, will have factored into their investment decisions.
It also needs a sizeable rights issue. This company needs to be recapitalised
FD
'' Another poster drew a comparitor if that were the case National Debt would eventually disappear, assuming borrowing remained stagnant.''
I have already said, UK debt does not remain stagnant unfortunately.
'NewCashquack' said ''Inflation of ten percent is a reduction of debt of ten percent in real terms.''
He said in REAL TERMS.
Inflation figures came out today which my occupational pension looks at for rises, but because there is a cap it will mean I will be getting a REAL TERMS cut in my pension as measured against inflation. Simple enough for most to understand.
If everything doubles - prices,costs and profits, and the debt level of Marstons is maintained at the same level , then the debt would have halved as a ratio measurement against profits, with the obvious benefit of being far more easily serviced.