Member Info for barchid

Farmer, I agree, I've been "long & wrong" like most of this forum I guess, however I did have correspondence with RF a year or so ago about cutting debt and pausing the investment programme, it would be nice to compare 1 year to the next without all the myriad of adjustments we have to allow for each year in the past.
Holding divi steady is fine, with this sort of yield, but as the debt which can be paid off without penalty (after their refix last year) at a time when rates are low just has to be the correct decision, imo.
Food is really rather poor, pubs are good and overnighting can be very variable. Hopefully they may spend the time & effort that goes into building new lodges/pubs into upgrading the poorer ones so their brand is much more reliable, this would help enormously.
Given the collapse going on in the high street at present some great opportunities could crop up after a year or two of these current closures.

Amati VCT have just announced a stake in them today, looks like 8.5% on Dec 31

londoner that is useful input re pensions, I realise of course that higher gilt yields would put them in a happier position but if they really can close that £30m gap it would be a good thing (for everyone), I would still like to see debt come down faster than it can with a rolling expansion programme. Sometimes it is best to standstill for a year or two which Mars never want to do.

fairdealer, you are spot on, imo, my thoughts on debt reduction are the same as yours yet the board are still talking about expansion of sites, which will hardly assist in cutting their debt mountain.
Don't know if you remember back to 74/5 when Grand Met, similar business pubs/hotels/breweries, were down to 18p because of their debt.
Maxwell Joseph had been on the case for 2 years already cutting their debt but it is not something which happens rapidly, my fear is that MARS board are still not taking debt as seriously as they should

Not bad figures but I do not understand why on the one hand they say pension defecit has decreased from £40m to £30m and then say that in cutting costs they can reduce their pension contributions.
Am I being too harsh in thinking they are putting the very best gloss they can on everything ?

Reaper
Perhaps we should wait for Woodford to sell tobacco stocks, he is big in them and a pretty good contrary indicator these days ?

Hi Uncle, looks like it has already suffered !
A big drop in the ADR's on Friday night caused this, also talk of FDA banning menthols whis is very less than helpful.

Deutsche do this quite regularly, go above 5% and then below it, I think it might be something to do with covered warrants or similar, it has happened at least 3 times this year

Londoner, thanks for clarifying your response from MARS, it does make sense, I look forward to seeing the full accounts in Nov
Rgds
Barchid

Londoner, I went through my own records and noted that RF did reply to a question I posed 2 years ago on the debt that at that time MARS had "total debt of £1.273bln, £853mill is long term (out to 2035) secured on freehold props at a fixed rate of interest of approx 6%. They have £197mill of bank debt which does benefit from low levels of interest. Finally they have £223mill of 35-40 year property leases..... extremely flexible from institutions such as Standard Life, L&G & M&G."
So if then, 2016, they had £420 mill of variable rate debt the sort of base rate increases we have seen are not going to make that increase anywhere near £15mill. I do recall that they renegotiated some of their expensive debt about a year ago but I thought that was again on a fixed rate. I do agree with you though, there does appear to be a £15mill hit somehow !
RF also pointed out in this old reply, but it is probably still relevant, "there is no economic incentive to pay debt down, our strategy is not to reduce debt but to increase profits"
My observation is that a stand still period would surely be of benefit to everyone so the goal posts stop moving for at least a year and we could all see what progress has really been made.

Londoner, have you had a reply yet from IR at MARS ?
I find them quite swift usually and like you I am struggling with the interest calculations, especially as they are very largely on fixed rates.
Without this "£15mill surprise", the figures would look much better.
I still also wonder why they feel obliged to keep buying bits and pieces, a few pubs here, a few more there, surely it would be better to have 2 years of consolidating what they have and then review where they want to be ?

Yes, I thought the same as you, but look at what happened in the first week of the merger, we are hit by fevertree collapse, perhaps the old manager, Mr Beal, was not as bad as the pundits painted him.
An unhappy start to say the least....

I agree with you, we just sit and take the divi and, rather like Micawber, wait for something to turn up !
Which I suspect will happen, I just wish they could go 2 years without buying anything and concentrate on lowering their debt a bit.....

It is encouraging to see so many hopeful guesses where MARS is heading, but I, like (I suspect) most of the posters, am a stale bull who never thought they would go through £1 on the way down.

They have been a truly dismal investment for me, other than the yield of course, let us hope the new Chair doesn't push for a cut in dividend.

I note that posters have had varying views on the food offering, I am in London & have to say my local, a Pitcher & Piano, is pretty poor foodwise, certainly an area they should be focussing on.

findahappyplace, I fear you are posting on the wrong board, the stock you are referring to is SYM, not SIHL !
Bad luck, probably the reason no one replied to you.

It is indeed good news. If they bought their 5% quickly enough could that be the reason there was no RNS at 3% ?
I have kept the faith with this stock for a long time but kept wondering if I was missing something.
What the shorts do now will be very interesting