Well done to those that made some money. Will it continue to rise following the directors buys last week and the good CoVid news or will there be a taking of profits and more shorts? I think the million dollar question is why did Dan buy?
Post from Big Smoke back in July 2020:
"...Mr Frumkin bought £570,509 in shares at 114p as part of a requirement for executive directors to own shares worth twice their annual salary. Under this rule, he has another £1m to spend to hit 200 per cent of £740,000."
Is this why we saw a further buy by Frumpkin this week?
Well done to all holders that made some money in the last 24hours and good luck going forward with your investments (except Matlot and his Forfaiter alias).
Z
The average lease remaining term of 20 years will likely include a few very long lease hold interests taking the averages up. Most leases will be 10-15 term certain (not total lease length) as many will have breaks after 10 or 15 ...still a long way off however.
No I don't think they would want to walk away having invested heavily in stores...but my point is even if they wanted to they cant because the consequences of doing so would make things worse for them.
Good point on IFRS-16 issue.
Matlot shows a real lack of understanding of METRO's predicament and the reality of being tied in to these onerous leases.Its not a minor issue that can be brushed off .
Matlot
Negotiation requires give and take.
What exactly will Metro give landlords in return for a rent reduction in a negotiation ? A longer lease term ...nope the landlords have that already 10-15years term certain. More security (personal guarantees??nope!) Are metro really going to walk away from any store that they have spent hundreds of thousands £ fitting out in the last 2-3 years? Nope and even if they did the landlord will simply issue proceedings for breach of contract or issue statutory demands or instigate CRAR (they will have to wait until January 2021 to do this due to Govt protection) and wind up the company (I don’t need to tell you what this would mean in terms of the FCA). For the same reason Metro are not like Pizza Express and can’t threaten go down the CVA or insolvency route. So what leverage does Metro actually have? . The Metro business model is a busted flush if it wasn’t then Metro would be opening more banks every week on new Covid Rental levels (30-50%) lower than the rents Metro agreed to tie themselves into Precovid lock down. All in my opinion of course and people should do their own research.
Matlot
Are you suggesting that any of Metros landlords will agree to voluntarily reduce the rent on these onerous long term leases? If so please explain why?
"oh not those leases again - old news factored in with the rest - always a way to get oooot of these / reduce costs especially in these covid testing times imo "
Paul
Rents probably can’t be negotiated down on 83% of the branches ie any leasehold property. What leverage does METRO have in a negotiation with a landlord? They can’t threaten to close as the leases will have keep open clauses.
Rents on these leases will Likely be upward only and start at high Precovid levels. It’s worth pointing out that the leasehold rent cost (that you refer to ) probably includes significant rent free periods granted so what will the % coverage be once the rent free period all end? Also Rent is only part of the total occupancy cost of operating these branches. The lease rental cost takes no account of initial fit out costs ( Mrs B has expensive taste) , other ongoing operating costs such as business rates payable to the local authorities (can be as much as 50% of annual passing rent), service charge costs £5-£10psf per annum, Insurance, utilities and maintenance and refurbishment every 3-5 years. Also each branch will have exit costs in due course dilapidations and that can easily be several hundred thousand per branch .
In short retailers with the biggest margins (clothing and high end luxury products) are struggling to make money on traditional stores due to all of these costs BUT somehow Metro can?
Question for anyone that thinks the Metro Business Model will work.
How clever does signing all of those 10+year leases (and spending millions fitting out the spaces as a new shiny bank) with no options to break and upward only rent reviews look now?
Retail high street rents (and demand for retail space ) have gone through the floor since February but Metro are saddled with onerous long term High street leases agreed on PreCovid terms with little or no prospect of renegotiation. Retailers are offloading poor performing space through CVA’s or by winding up holding companies . What will Metro do?
On the 10th of March the penny dropped for me on this dog of a share ...thankfully.
This board is littered with people pushing this share ...
Meanwhile....
https://www.ft.com/content/9776a4f8-f957-49e3-ac06-3baad9588ee3
Theo I saw the thought that the ratesetter talks were to flush out bidders.
For me a lot of people would know if a T/O was being worked up and the price would be rising consistently in the background with a huge spike when the rumour became public knowledge. But what do I know I am underwater with this share!
Govt just confirmed this afternoon an extension of protection for tenants from forfeiture etc until 30/09/2020. if you are a struggling retailer why would you pay the June quarter rent?
I hope that I am wrong but the swings in the share price look to me like closing shorts followed by reopening them shortly after rather than some dynamite inside knowledge of a takeover.
Pand: I see there has been some fireworks but missed it all.
Been out for a while but still holding a token amount of Metro shares. Down overall but still optimistic.
Who remembers the good old days?
Big Smoke and Nov going toe to toe on this board.
Are they the same person with two alter egos or have they gone on holiday together ?
Hopefully this won't impact too much.
https://news.sky.com/story/coronavirus-thousands-sign-petition-to-temporarily-close-bicester-village-over-covid-19-concerns-12007965
Nov
BS and Matlot talking about posting all day on this BB ?
Between them they have over 40,000 posts FFS!
Its someone on this board
Nope
Who do you think has just bought a nice new car?