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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
Agreed its just spivs trying to get the price down
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
@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 ?
barchid could put more " flesh on the bones" but am endeavouring to encourage serious investors to do proper research, maybe a lost cause as demonstrated by the abysmal turnout for the JV Vote.
Am currently staying at a Marstons Motel,,,,will report the experience later
Are not Whitbread primarily the owners of Costa Coffee and Premier Inn? Might be in the same sector but not a reasonable comparator imho.
@perkylad
If they were the owners of Costa still I would be inclined to agree but didn't they sell them 2 years ago to Coke ?
So premier Inns, Brewers fare, Beefeaters are not too bad to compare the rump Marstons pubs with rooms/motel style lodges now the brewery is no longer in their control.
Where they do not compare to Marstons is their net debt figure though, hence they can buy bargains rather than have to sell them.
That was how I read the point that was being made.
Posters on here that think there is no need for a rights issue clearly have not bothered to look at the accounts too closely, imho.
@fairdealer
Do you have a report on the Marstons Motel you tried out on Tuesday ?
Postings have been v quiet this week from the usual enthusiasts and price predictors aka Mystic Meg, possibly because Mars have gone down whilst rest of market has gone up .
@Barchid
Hi mate. I've been neglecting my duties on this board myself of late. I've been a bit distracted on a Facebook page dedicated to my loathing of Piers Morgan. It's eaten a lot more of my time than I thought it would so I'm taking a bit of time away from it to spend time here.
PM, a dipstick of note !
That's putting it mildly Barchid. But I'm not gonna contaminate this board with it.
Good morning Barchid arrived home late last night after a marathon trip.
Stayed at 2 pub/hotels so got a comparitor between private operated and corporate(Marstons)
As usual Marstons accomodation clock is separate to the pub and resturant. A relatively modern complex where they have strict protocols to prevent CV19. It was clear the Hotel and Pub were operation on a skeleton staff ( the same member of staff was moving between the Pub and Hotel). This is fine as costs must be controlled, it did not impact on comfort, but one did detect the member of staff was kept very fit.
The pub was not over busy even though in a good location. I would say there were less than 10 patrons in the pub/Restaurant, 20-25% of customers. The Accomodation block was 30-40% occupied.
The Hotel is tidy and clean and ample parking.
THERE IS ONE BIG NEGATIVE, ON MARSTONS BOOKING SITE BREAKFAST IS STATED AS AVAILABLE , FULL ENGLISH, CONTINENTAL OR A COMBINATION OF BOTH.
I wished a Breakfast however when checking in was told NO we cannot do. It was late and I did not remonstrate with the member of staff.
This IMO is very poor and no doubt other visitors would feel very agrieved.
Pub/Hotel 2 on the Welsh Board , which is independant, provided breakfast as required. They have a timing arrangement to make sure a limited number are in the Restaurant at one time. This hotel was CHEAPER ( breakfast included) than Marstons. This was not the issue, the fact Marstons did not keep to that advertised on the website, was to me a serious negative.
If the company does not deliver what is promised it will have a detrimental effect on Foot-fall. Bad news can travel fast.
It's such a shame that your stay at Marston's Inn accommodation was blighted by incorrect information that appears on the publically facing internet. I do take it you left this feedback with the receptionist on your departure? This would, in turn, be fed back up the chain where appropriate action can be taken either in simple steps of amendment of website details or omitting the option for food altogether. Perhaps giving the details of your stay with the grievance(s) via email (emily.mclachan@marstons.co.uk) so this can be forwarded to the right resource team thus preventing the bitter after taste. It is good to read that strict measures are being taken serious as this is the "confidence" that people need to know & feel when considering going to a Marstons establishment.
Fairdealer
That is very interesting, so all good apart from the fact they failed to tell you no breakfast when booking, as the reason for that is covid it implies someone at the top has not thought this through, as you say it will hack people off even if the rest of the experience was good.
Appreciate your feedback.
Co-incidentally just recieved (12.00) a mail from Marstons thank ing me for my patronage and offering 20% off my next visit ( already get 20% on the Privilege card) doubt that will mean 40% for a shareholder!!!
Considering the Hotel was limiting personal contact there was no provision for feedback even the online message today has not asked.
The Independant Inn sent a me a satisfaction questionaire immediately ( I only left Friday morning and was in my inbox last night)
Fiona I will write direct as I have done before. Just hope some action is taken otherwise knowing how social media works, the company's reputation is going to suffer.
By the way I am not on FB, Twitter etc, they are a cess pit ( sorry to all reasonable subscribers)