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@fairdealer
As usual you have hit the nail on the head, when I posted yesterday suggesting a rights issue was likely I did not go into detail with the numbers as I (clearly wrongly) assumed that fellow posters on the site were cogniscant of the MARS financial situation.
The responses to my post were somewhat surprising as there seem to be a significant number of investors here that invest on the basis "this has fallen a long way, bound to go back up soon" and take great umbrage at anyone who does not invest on that basis.
We live and learn eh ?
Posters should consider these facts.
Debt as at 30th September 2019.....c £1.3billion
JV receipt ( Q3).............................,,,,£237m
Debt repayment due 2023.................£350m
JV agreement provides MARS with a proportionate lower share of profits which will be lower than current. There needs to be a 22% increase in joint consolidated profits for Marstons to mark time with current (2019) profits.
Until the BOD announce level of foot fall since re-opening there can be no knowing how Sales are recovering. Anything else is pure speculation.
Others in the sector are prepared for a significant decline in customer traffic. Whitbread who have raised £1billion in a Rights have openly stated sales will remain low for some considerable time. Whitbread's Rights have allowed them to pick up Travelodge who are severely distressed.
The company will require funds to bring back Capital and Enhancement projects cancelled last Summer.
Others in the sector are/have raised funds to support Balance Sheets.
It would be wise for the company to raise funds through a Rights issue before the Annual Accounts are issued in November.
AIMO DYOR
It’s nice for it to finish up for the day! 60 seems a bit of a dream at the minute.. fingers crossed tho!
fingers crossed we see 60s this week
Agreed its just spivs trying to get the price down
Personally I don't see there being a rights issue at all... MARS leadership acted quickly in March and limited Cash Burn to £10 million per month. 3.5 months later and adjusting for a slow restart in July there is approx 40 million lost due to the shutdown.
Now, in Q3 there will be a 237 million windfall which will eventually be used to pay down debts due in 2023 but in the interim one would assume they will hold the cash incase of any further imminent cash burn such as one caused by a second lockdown (which is unlikely IMHO).
Yes capacity is down but the govt have just given all pubs and restaurants a further 15% saving for food etc so although the consumer will still pay full price (apart from during the Aug 50% off scheme) companies like MARS will generate more from food sales. This will last even in the less profitable months as the scheme ends in January 2021.
I see this share being a strong performer in the long term from the current levels and have a moderate holding of a fair few thousand shares. All hospitality stocks tracked down after the speech and they will probably all slowly rise over the next 12-24 months with there being a huge lift once either a vaccine is found or once divis are reinstated.
Not to mention MARS get another 40 million by Sept 2021 should a basket of 5 shares (Britvic, M&B, MARS, AG Barr and C&C) achieve levels they were at on March 5th (in the middle of the CV downturn)... At least that's what I got from the RNS.
All in my opinion and as always do your own research but currently I'm sat in the red not phased happy to ride the long term buying the dips but I don't see this going much further down now we've seen a 40% drop since the 75p high. Good luck all
Couldn't agree more, it's about time all these shorters were put down, far too much damage has been done to good well run ftse companies in the sake of driving down the sp to make a little money.
Oh please try harder for goodness sake do you honestly think that the combined might of JPM/Caz and Numis would come up with a refinancing JV deal with Carlesburg UK and increase lending facilities .....only to have to go to market for a rights issue......Purile deramping to the extreme....the announcements contain big picture cash flow implications which show there is (currently) adequate head room.....its misleading posts like this that suck
Marstons conducted quickly a distribution share agreement with Carlsberg to help sell the beers during the lockdown to improve its sale position when cash flow was non existent from its pubs/hotels during lock down. Now the pubs are re-opening cash flow will return, with projections that many will stay and holiday in the Uk later this year. Once we get a positive statement from the Board on this I see this share will rise very quickly indeed. I do not see the need for a rights issue with the finances in place should in fact the lockdown have got any worse, but it could come if they decided to expand further and make the most of other pubs/breweries businesses that are struggling and ripe for a takeover by them.
I agree, a very high chance of a rights issue.
With the brewery now majority owned by an overseas company what is left but a pile of debt and a string of pubs, some scruffy, some mediocre and some OK, but certainly not undervalued in the accounts.
What other choice is there ?
"Pubs packed this weekend" impossible because they cannot operate to previous capacity. At best 70% full. On top of that the current climate and looming recession will mean mean huge impact on profits. The deal with Carlsbeg simply means this new company will survive, it could soon mean a rights issue.
Pubs packed this weekend should hit 55-60 this week as sentiment is changing.
It was 75p when pubs were closed
Deos, I have some at 62p, 54p and 47p, so yes hoping for a decent recovery to the 60s pretty soon. If we get get news on the Covid treatment trial or indeed some vaccine news then this will shoot up. Imho
I'm in here at 60p hopefully hits it next week
In my portfolio I have a decent holding of a UK Covid play stock that will release their results at the end of July at some point. I am edging on the confident side that this will be big news and therefore I am heavily investing in Marstons as it has dropped so much. Also looking at first group, but might leave that till Monday’s played out. Again this is me being speculative and a bit of a gamble , but dyor and make your own mind up, but if this plays out like I expect, some bags to be made.
Any chance we could restrict this board to thoughts on MARS rather than scattergun predictions on everything from totally irrelevant stocks to inane predictions as to where the SP may or may not be in 2023, as if anyone knows where it will be end of 2020 ?
Lloyds 20p to 30p. Centrica 15p to 30p. Marks and Spencers 30p to 60p.
2reincarnated. My point is just that if Sandyman knows for certain there is a crash coming then presumably he's putting his money where his mouth is and taking out aggressive shorts which will make him very rich. I'd just like him to say which companies he's gone short on.
Darkarches thanks for your post, not sure it's about shorting, but " gambling." Just look at Capita it went from 80p to 20p within a few weeks but in one dayit went from 20p to 40p.
Look at Premier Foods, it crashed to 18p, today it is 80p, but has taken 4 months to get there.
I personally think Stagecoach could hit 25p one day and be 40p the next. Marstons could go down to 20p one day and be 40p the next. G4S could do something, I feel Virgin money could go as low ad 20p one day and be 40p the next day.
@ Sandyman 'This time it will be different'. You speak with remarkable certainty. Any short positions to share with the rest of the group?
Good Post. Agree 100% and unlike last time in March, we will not see a recovery in months let alone weeks. last time all stocks fell at the same and most recovered at the same time, so you could not be in two places at once. This time it will be different, you may get the chance to see one stock recover and you can invest the proceeds in another crashed stock.
Just joined but been watching Marstons for a while I have a watched it rise like a Phoenix and then drop like a stone I really think the stock market is going to crash big again very soon. America is in a mess mass unemployment and the virus getting worse so I would sit back and wait then grab some bargains.
Let me know when I will get my 60p back?
Well at least the broker hasn't down graded the sp, not that's a first.
Not allowed to invest as it's not good for their families? :)