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Correction Thousands and thousands are now considering staying in the Uk for holidays which will help Marstons.
In fact many are not even considering going abroad.
Sure it is because the delay in the JV going ahead, and hence creating uncertainty it will? If it doesnt it will be worhless.
Compared to other pubs, this has dropped the most, so its not an industry wide reason the steep decline in the past few weeks?
Bulls should examine the Finances.
The company is heavily borrowed. The delay in Carlsberg completing creates not only uncertainty but the company could be between a rock and hard place.....£70m temporary facility agreed in May is due for repayment in 180 days. The delay in JV completion is likely to be causing some head-scratching at HQ.
CAMRA have history, they referred Marstons aquisition of the Charles Wells brands some 3 years ago, whereas it is very frustrating any delay in funding at these uncertain times does make the Market nervious.
Whether is is liked or not the possiblity of a Rights Issue grows as each day goes by......Banks are in a position to require some kind of Fund raise. A Placing would not be in the interests of Shareholders.
Carlsberg are not interested in whether or not MARS raises funds, they are only interested in the Breweries and Brands, Marstons are left with Pubs and Motels which were due to have £90m spent on capital works this Financial year.
Until we know how revenues are rebuilding it is difficult to see the Company going forward without additional funds
I love the use of the word could in that statement.
Bulls will be looking at the positive could‘s just as the bears are focusing on the negative could’s.
Time will tell. If I was a chairman on the other have I would not be putting in £50k of my own money if a RI could be imminent ^^
Remember the Chairman bought before the referral and consequential delay. Banks do have a whip-hand especially when temporary funding conditions are not met.
Yes I was just looking for a clearer picture on that. He took another £100k worth back in 2018. Can see plenty of director buys but no sells. Most likely all holding for the forward looking dividends right, I mean who could blame them.
At current SP this would come across as massively undervalued on a forward looking basis irrespective of the JV, that being the icing on the cake.
Many bought on dividend yield 2-3 years ago when the SP was above £1.
When do you think MARS will return to the Dividend list?
Pitter patter
I agree with Fairdealers caution, because what must be realised is that the world rather changed in early Spring for UK co's, but for Marstons it changed beyond any reasonable risk assessment could have ever invasged.Supermarkets can sell online, but Marstons pubs can't sell much online, can they ?
Thus the deal with Carlsberg which many regarded as a disposal of control of the jewel in their crown left therump mars as owners of a string of pubs, motels and a few pitcher & piano bars plus a debt mountain; whereas pre the deal on the jv, Marstons were the largest brewer in the UK, quite a difference to what shareholders owned pre lockdown. Of course the bulls will disagree but I fear holders are in choppy waters at present.
Caution is to be had across the board and within all companies.
The same argument and caution would have been paramount back in 2002 and again in 2009 - the dividing factor between which is was the hold intended for 5 days or 5 years.
As to answer fairdeals question I would expect the dividend to be reinstated within a couple of years tops, and with the SP at that time to then be sat much higher than it currently is today.
As to the divide between bulls and bears I’d contrast it more akin to longs vs shorts - traders vs investors. I can hold through a paper loss now if the end result is an even greater profit later. If anything I’d be increasing my position on weakness rather than getting myself in a twist, you know.
In times of Depression, and make no mistake that is where Global Economies are heading, safe investment havens, apart from Gold, have always been Food and Drink. I will add one further caviat, value of assets and reserves. It has been truly amazing how quickly many Companys and Individuals were in trouble within less than a month after Lockdown. They literally had little or No reserves. I don't believe that situation has been present in previous recessions. In fact it is apparent debt has been running at unsustainable levels. Marstons are no different they had over-borrowed in acquiring Charles Wells, and continued to pay high dividends which some of us questioned.......would have been best to pay down debt and reduce shareholder payments. Under such a Policy, imo, sooner or later a Company paying dividends at the expense of Corporate debt will come unstuck.
If the dividend is to be resurrected within 2 years i.e July 2022, the year end being 30th September , it would be an interim div for the year 21/22. We do not know as yet how company revenues are rejuvenating. It is speculation but reasonable to believe the current year will be in deficit. So that begins us to yr 20/21 where revenues should increase but the unknown carry forwards will be reduced.
It is impossible to predict profits at a level to enable Dividends to be restored. There are many factors to be considered.most impossible to forecast with any accuracy.
As mentioned some while ago, following the CMBC agreement, Marstons have got to re-invent itself to re= build Shareholder value.
Fair post. I am also equally amazed as to how many companies that you would have thought prior were fortresses with thousands of employees which must be solid as they float on premium markets have succumbed and on the brink after just a month of no trading.
As warren buffet says, "Theres nothing like an outing of the tide to expose those who were swimming naked". The amount of butt naked companies who were swimming close to the shoreline is a real eye opener.
I still believe there is compelling value to be had at MARS, MAB, JDW and others. As you said, in a recession these are usually the safe haven assets. In a post covid depression, these could come to life but will be slow going whilst covid looms. The risk here is purely down to the fact that if the UK went on lockdown again, it would be game over for the industry as we know it.
It's just a matter now of weighing up these variables, and deciding whether MARS has the required risk/reward ratio to warrant an investment. Personally for me, the reward now outweighs the risk in the medium term but with the caveat that I am willing to write off a large chunk of the investment, which acts at a natural cap to prevent overexposure.