Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
“We think debt repayment will remain the priority for some time and don't see a return to cash rewards to shareholders being on the cards anytime soon, though some analysts disagree”
Some analysts are wrong then - no way a divi is on the cards at the moment. Paying down debt and securing freeholds / development opportunities when freeholds are cheap will (and should) be the priority.
For investors today was a good one - but looking at director deals, I'm not sure why James Ullman sold all (small holding) of his shares at £4. Rather than market moves - this worries me more than anything else - currently my largest SIPP holding. I now have many more shares than a director - lol - clown (or i'm the clown)
Norris, that share price parity would be £2.19 in my part of the world - I’m fairly much up to my maximum exposure now, but at £2.19 I would have to be irresponsibly exposed.
Slater - holding this share feels like a gambling addiction!
It’s not really my speciality, but yes there will be some inflation measure CPI/RPI although I think the latter is being phased out as an index. In pubs Tenancies are slightly different as they are shorter duration and rely on FMT (fair maintainable trade) at their core, and usually there is no right to renew. All depends on the individual lease (which is effect just a contract).
JDW will be long leases, and if you look at the list a lot are in London because this is where the company started and they could not (or would not more likely) afford freehold sites - this allowed them to grow quickly in the early years. Watford based so still “London” but it’s interesting they are letting so may of them go.
There is no expectation of having a profitable year, and why not hide the cost of lease disposals (may not be a cost as such but maybe below what book value) in a completely screwed up environment.
Never let a crisis go to waste!
Not really - if memory serves these are mostly leased pubs - with a lease there is an obligation to pay rent (probably linked to an inflation measure). Smart move if you can pass them on - there is probably not much capital value here - but if they manage to swap 20 leases for one great freehold in London at a discount then I’m happy.
Managers Special is just a defrost special. They predict how many (fish for example) to defrost for Friday. Then if they have any left on Saturday (refrigerated not frozen) they will be discounted to sell before they have to be thrown away.
Yep, Sky is not cheap - it’s based on square footage for pubs and that alone means it’s not economic for spoons. They have low prices which keep pubs busy - why have them rammed and sell cheap beer. Football and regular priced beer or no football and cheap beer - make your choice. As said before they will show if on regular TV with the sound turned down.
My opinion on fair value was £13 before covid (ie it was overvalued), since then covid has f'd the pubs plus there has been a dilution. My fair value opinion is around £10. I bought a few at this level, I thought £7 was a bargain so I bought a decent amount around then. Now we are at £5 and I've doubled my holdings.
Lets see what happens
Market Cap £650M - recently finished the hotel in dublin costing £33M - and thats just one site! Two thirds of their pubs are Freehold. Probably going to be a recession, but people will trade down to go out for a pint. Well known UK brand - love it or hate it. Yes, I know debt is high, but as long as they can pay their bills, then that will inflate away over time.
Is it really worth half of what is was last year now the lockdown is over?
It all depends on what the value means to you. Tim sold 4million, but retained 28million, so he is down around 60 million quid on what he owns - which makes me smile - but won’t really impact on his lifestyle.
I’ve bought in for my kids as a long term (10 year) play at around 9.50 a few weeks back - for me to be interested for a shorter term play it would need to be 7.50. Except a general market crash I don’t see that happening.
I think we are unlikely to see a divi any time soon - which my not be a bad thing - whilst I don’t like the guy, Tim is generally a good Capital allocator providing he is not buying financial instruments. Why try and predict inflation, when you are selling one of the most inflation proof products of all time with hundreds of years history.
Used to work for them - no not in a pub - I think the customers get the best deal - currently £0.99 for a pint of rudders and the same for a bells whisky with a mixer (surly should be water?). Tim got scared and sold a load at over £11. He is trying to crash the share price now to buy back in I think. Customer/Shareholder/Employee is the hierarchy at the moment.
I learnt a lot from working for them but the most important thing was that this is Tim’s “train set” and he wants to control it.
The agenda may be - make some years of losses for tax credits, crash the share price, make a political point, get cheap share options and buy back in, and then raise prices to customers and make a mint.
Finger in the air at 66% freehold property now, so this is backed with real assets and they are using cash to buy back more.
Yes debt is high - but then debt is high when you buy your first house, but it tends to come good due to financial repression.
ATB