RE: Fairdealer -My Godfather29 Aug 2020 11:23
When the pub I run was owned by Marstons I was on a contract that is a simple ‘low cost’ entry as a tenant but on paper sounds a lot like a management position, you pay a fixed amount as a security bond to enter the agreement and have a long list of ‘rules’ to follow, basically Marstons pay the rent, gas, electric, some operational costs and they buy the stock for the bar, you pay for staff, business rates, a few bills and if you want to run a kitchen you pay those costs too, in the arrangement the tenant receives 30% of the takings from any wet sales,
We moved from that deal to a standard tenancy on completion of the sale from Marstons to Admiral, I have worked in venues on a multitude of different contracts and have many friends and old co-workers from over the years who are involved in the pub/hospitality trade at all levels,
Any recent conversations I’ve had with anyone working with Marstons or running Marstons tenancy or share-agreements have been positive, the ‘eat out scheme’ has brought a lot of foot fall to most venues
Also, one MASSIVE benefit for Marstons is that the ‘retail’ and ‘foundation’ agreements are all pubs that DO NOT pay them any rent for the buildings, so those pubs have not accrued a debt of rent to Marstons and are all reasonably viable businesses even during covid, most of the pub companies have charged rent to all tenants the whole way through Covid lockdown and this is a mega strain on the finances of these venues and honestly could result in a large percentage of the pub sector to just give up and close their businesses, in the medium to long term, this won’t affect us at shareholder level because the businesses will get a spring clean and be offered to new tenants.
All in all, marstons have a varied selection of contracts in their pubs and I would (with no figures or solid information -simply using my knowledge and background in the sector) confidently say that Marstons are in a strong position because their Managed and Semi-Managed outlets will prop up the leased and tenanted section and enable the whole estate to limp through Covid reopening restrictions,
Most of the other pub companies use a 3rd party logistics and brewing companies to stock their outlets, as marstons use their own fleet (although obviously that has overheads of its own) they continue to supply their own manufactured product to their own pubs, thus continually moving their brewery stock and bringing cash in the tills with less middlemen to pay inbetween.
I’m probably just rambling on now! I suppose that could be classed as an introduction..
I’m currently sat on 500 Marstons shares to retain my discount card! I was up to over 50,000 Marstons shares a few weeks ago but I’ve taken the risk of moving the funds to another area for a few weeks! Hopefully I don’t miss the quite obvious double-up that will inevitably come here!
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