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*technique
Lets be realistic. August should be as good as it gets for pubs/restaurants in the current environment with the government scheme, people staying in the UK and weather starting to heat up (hope it stays this way!)
Yes pubs could close, anything could happen, but i cant see the governement encouraging people to get out them taking a big u turn. If they do, no doubt support will be in place as the hospitality sector is to valuable for the government to sit back and let fail
Interesting trade technic
Not convinced a govt would drive it’s economy into the ground as that costs lives too in terms of a broke NHS etc
before the sp continues its downtrend to eventual new lows and possibly leading to total collapse...
https://www.bbc.co.uk/news/uk-53621613
So far, a sage scientist was asked if locking down the pubs again was a possibility, and he said it was a possibility. Everything is a possibility! and he is obviously reluctant to rule anything out.
Another lockdown would put more pressure on independents rather than MARS, does make for a more volatile ride but the long term favours them. How long is long term? That’s an issue for many.
@barnet
I read that too but in reality I find it hard to believe the govt could be that stupid to close pubs just after reopening them, despite what they did to weddings yesterday?
Nevertheless, believe it or not a lot of people will read this and think "why rush into these at present", so the damage has been done.
Pubs to close again is the headline in the press. Many pubs will go bust in that situation. So expect mars to fall to 35p last week. Only got a small position in here myself but hope this can survive
Have a feeling the fall today was due to the extended lock down on larger weddings numbers (over 30), and high numbers meeting for another two weeks? However one pub reporting on the news tonight said they had seen increased recent trades and were already back up to 60% of revenues compared to the same period last year so what with many now holidaying in the Uk this year the numbers may well catch up in a month or two if the pubs can stay open and the govt scheme for eating works for mid week trade. All is not yet lost in my opinion.
Suffocating in a mask in Tesco today and listening to the depressing news about UK lock downs and increasing global cases I started to wonder if the entire pub industry would still be in business at Christmas.
I'm off to the Winchester till this all blows over. I don't think this one will recover for another 12 months, but it will. Rapid in home testing will be available in the next month or two that will help control the virus and restart the economy . Look out for the UK RTC announcement next week. Time for a Tetley's I think, gla
Why the 8% drop today to 40p?
alternatively ask the broker then ask Marstons for one, twice. Fingers crossed, promised again in next weeks post. Shame they don't cover Estrella and Shipyard.
Thanks Jetjock and Staycool :) I ll give those a go - pub n discount in this weather is looking good!
Happens automatically in a welcome pack if held in your name. If however they are held in a brokers account then you’ll need to provide proof of number of shares you only need 500 shares to qualify
When I bought my shares I contacted investorrelations@marstons.co.uk and received a reply of how to get the Privilege card for discounts.
Ooh how do you get a share holder discount card?
& Into next week and beyond I have seen for the Marstons web site that they have now registered for the 50/50 eating out scheme with the Govt to have the Govt contribute as per the recent Govt incentives to help both the Pubs and the customers - once people realize this then sales should increase, especially as more and more are now staying in the Uk for the summer break.
All very good and valid points Hollicat. I’d like to think that the majority of that is already factored into the current SP, it makes most sense overall + Covid factor.
So the whole play here is whether or not they can carry on along the lines of the original plan and then also make it profitable as they go. If so up we go, if not we shall see. Blue sky has to outweigh the grey at these levels though, just like before all this the grey possibly outweighed the blue when you consider the overall picture was pretty much the same minus covid factor.
A lot of bargains to be had all around, hopefully these turn out to be one of those. Have a pleasant day
Lots to look forward to at these lowly prices for Marstons what was it pre-lock down £1.18? I see increased Beer drniking and sales over the weekend whether at home from Amazon Marstons deliveries, Supermarket sales, and the Pubs all of which are now open?
I feel we need to look forward and enjoy what we have as a great opportunity here!
Feel free to tear me down, I won’t be offended! I’m not sure what the contradiction is? Managed pubs profit will be severely impacted but still more that the brewery in actual terms.
Your point re. adapting to the new world is a good one, which is another good reason to be cautious with Marston’s. The decision to sell the brewery business and JV with Carlsberg was made last year, well before the Covid train hit. At that time the strategy would been seen as focusing on the highly profitable managed pubs, converting tenanted and leased pubs to franchise and selling the less viable ones, and releasing cash from the brewery side for debt reduction via the JV. Then the world changed...the brewery/free trade side could be seen as a lifeline whilst the pubs were shut. Even with the pubs open there is going to be severe profit downside as per my previous missive. Also you might wonder what Carlsberg management are thinking now, there partner is suddenly looking rather sickly, maybe best to finish the brewery takeover job?
@hoolicat
Interesting opinion however you contradict your own views within your conclusion.
Not tearing you down but interesting that you see the pub side as more profitable than the brewery side which as stated is much less profitable with tighter margins however it’s then a negative that they are taking a large sum on that whilst also maintaining a 40% stake in the combined JV with a bigger player moving forward. Oxymoron right.
Businesses are going to have to adapt and change to the climate moving forward. If successful SP will be higher, reverse and lower which then brings us back to current day.
Place ya bets...
@Hoolicat
A most insightful, eye opening post, whether you prove to be right or wrong on end result matters not, but you have added a depth of view which seems compelling to me, probably not to many others. Thank you for sharing your thoughts with us.
I was never a bull of the sale of most of the brewery as the debt pile and a string of diverse & in some cases, disparate, pubs did not seem a terribly attractive prospect.
I had posted several times over the past couple of years that it was quite possible an overseas company could take out Mars, but post covid Carlsberg saw an opportunity to get what they really wanted and struck. Leaving us with something altogether different, and my worry is that the estate was rather fully valued even before covid.
I’m not holding at the moment, but have invested significantly in the past, also I am an ex-employee at a senior level in L&T part of the business...so here is my pennies worth...
The Leased and Tenanted side of the business is going to be in deep trouble, pub failures will be hitting the rent line and volumes (beer sales) deeply impacted at a level far higher than post 2008 which hit profits hard. Alternative models will be used, i.e franchises, but this will still hit profit hard. This is £30 million per year profit u Dee threat.
The managed side will be trading at best at break-even with the reduced sales capacity, Marston’s managed are predominantly value food led, which needs turnover...and now customers will want high quality, good experiences when eating out (because if your going to make the effort you want it to be a good one) which Marston’s are not strong at.
In other words Marston’s pub side of the business is going to bleed money, and with further lock down and the end of summer (no garden trade), this is not going to improve until spring next year. Managed houses represents £60 profit under threat...
Which leaves the beer co./brewery side of things, which whilst strong is nowhere near as profitable as the pub side, much less margin...and of course they have sold this off, and as previously stated they will be the junior partner here.
So my view is that Marston’s will collapse within the next 6 months as we know it, the brewery will be entirely taken over by Carlsburg and the pub side will be broken up to venture caps like GK and Ei have been...
There may be opportunity to invest for break-up/takeover news, but I have no idea what that number might be...and yes the debt is enormous, the money from the JV, assuming it goes ahead ( the delay is a red flag) will not clear the debt as hoped but shore up losses...
Feel free to critique, I still have many friend in this company and wish it well, but I fear the worst...
Know the pub well, lovely spot.
Went out today with the wife and daughters family seven in total,daughter had booked a table at a lovely pub near her home called the Navigation inn at Stoke Bruerne Towcester right next to the canal,when we got there it turned out to be a Marstons inn,she had booked a table for one oclock they have a very large garden at the front ,one at the rear and six or seven tables on the towpath ,by the time we had sat down every table was full with most people eating and the large carpark had very few empty spaces,the food was very good and all social distancing was being used ,,,,and I also got to use my share holder 20 per cent discount card ,