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The whole sector does not appear to reacted well to the various initiatives announced today.

The Market clearly has concerns.
This is a market for Gamblers.

Sentiment has blinded many investors, reality is beginning to emerge.

Markets always look forward. At this time there is so much uncertainty generally the only people making money are Traders, if they are lucky.

The whole sector is down, clearly the touted VAT reduction is having little or no effect on the hospitality sector which whether investors like it or not is facing considerable head winds. Whitbread stated yesterday having raised £1billion in a Rights issue, sales income will be low for a considerable time., and they are well placed to weather the predicted storm.

Unless a miracle occurs we are going to remain in this territory for some time.

Fair point Barchid although do wonder if the "registration" process is being followed religously. One wonders if the social disregarders care.

Trent could it be the anti-drink brigade infiltrating a soft target?
It does seem strange as already stated how many have tested + in supermarkets. I am not even sure if anyone is tested either before or after going into a supermarket. As you say it does smell!!!

As with supermarkets and providing online technology is in place, managed house sales should be available within days. Tenanted houses not so clear as many are free-houses and will be drawing supplies from different Brewers.

The speed of accurate data will tell the market how the recovery is going.

The article's author states Marstons will open 90% of it's Pubs this weekend. Let's hope that is correct even though CAMRA claim only 50% have opened generally.

At this time ,Investors should take into account the underlying asset value behind any stock especially where Commercial property is concerned where there is likely to be some significant revised valuations. Cash flow in these uncertain times is almost impossible to predict. The proverbial will hit the fan next month when furloughing funding is deminished and Employers realise the unviabilty or otherwise of their Businesses.
Whilst Employees and Business owners have recieved Government support these last 4months there has been a false sense of security that has enhanced confidence which is unlikely to last.

Just be careful there will still be good investment opportunities. Research is critical.

AIMO

that is all been known for some time, so nothing new. The point being the Mail appears to be giving an impression cash from Carlsberg puts MARS in a better position than others in the sector and not as is known being used to pay down debt.

RF also stated in the interim report not to be under any illusion trying times ly ahead.
It is the next 6 weeks which apart from Christmas and New Year, have historically been the highest cash earning weeks of the year. Let's hope most Pubs do reopen soon otherwise the fear must be many in the sector are going to find it hard too survive

did the article mention the destination for the funds coming from Carlsberg?

It has been a mixed reaction, city/town centre pubs seem to have attracted a fair number of punters. More rural and tourist areas not so well patronised. Traveled back through a tourist area and many villages, last night. Some opened pubs with outside facilities had a few drinkers, many judging by cars parked, were having a meagre time.
CAMRA report more than 50% of Pubs remain closed. The belief being they are assessing how well the Opening goes and then making a judgement on viabilty.

It seems this BB has attracted those who have little factual information to debate and those who do suffer abuse.

A word of advice keep your eyes and minds open, viewing the World through rose tinted glasses often ends in tears.

When posters state "this is going to £1, £1.50, one even proclaimed it will be £3. Get real and do some hard research not ramping for one purpose.
Not doubt the rampers are suffering seeing the SP 's direction of travel.
Expect the market is spooked seeing Travelodge going into a form of Admininstration, Wisely Whitbread did a rights issue and are now in a position to pick up distressed companys at bargain basement prices.
The intelligentia have ruled out a Rights, now the potential is seen. Better to be a predator and not the prey.

Work it out "empty barrells"!!!

draft it seems you have a bee in your bonnet. If knowledge offends you, so be it. I try to impart knowledge to help others, whether my desk is moved or not..
If my views offend your mission, maybe you should move on or just listen....you can ignore if you wish.
The history and background of a company is critical for anyone who has the financial health and importantly are a serious investor. Draft as you have made clear your interest as a Trader is important to you, but do'nt hide from the facts which are there for everyone to see.
I am sorry that you lost your job, clearly your former employer did not recognise your talents..perhaps they were outdated.

GLA

rick correct sales were reported up. these are sales through supermarkets etc where margins are paper thin. Of course no mention of the loss in cask sales which is enormous.

At least you have an open mind. Lets hope you are right and I am wrong! Time as always will tell

barchid

right and no doubt Carlsberg had their eye on that ball too.
Judging by Carlsberg past collabatory agreements, they rarely run to term before they (Carlsberg) effect total control, which is fine providing the consideration is right.

Barchid,

Have erred on the positive side with profit projections, knowing full well some will react in a disparaging manner. That said we (MARS) have a mountain to climb. Looking through rose-tinted glasses is a tool of trade for Traders.

As indicated I am not happy with not knowing how Carlsberg UK will handle imports from Denmark. The cynic in me says knowing what an astute Company Carlsberg is, it will not be part of the JV structure and yet Carlsberg require direct access to all Marstons Pubs.

Rick, he (draft) means me. Like yourself have never shorted in my life indeed believe it should be illegal as in Germany.

Rick the NAV is published in the annual accounts, have a read.

The basic point being whatever an individual's take, on stated profits from the Brewery division Marstons lose out and require an increase in profits of the combined operation to the tune of 24% to just standstill.

Marstons will still retain a big debt pile to manage/maintain.

If my words appear pessimistic so be it, but realistic when judged against other Companies within the sector.
It is not a popular proposition here but a Rights Issue would give the company the run way needed.

Wrong again draft. As a Trader would expect that comment from you.
Have been here for 5 years, and with one or 2 others can claim too have a little more knowledge of the Company's affairs than most.
How long have you been here?

The JV will practically commence once the initial equalisation payment of £239m (Q3). is completed . Integration of the brewing businesses it's infrastructure and distribution facilties will have costs, it is projected full cost savings will not be achieved until year 3.
In return for the equalisation payment Marstons will transfer properties ( Breweries and associated properties) valued at £580m to the new Company, Carlsberg will transfer it's UK Brewing Facilties valued at £200m. Marstons have 6 breweries and Carlsberg 1 main brewery with a small Craft Brewery in London. The assets will disappear from the existing Parent Co's balance sheet, transferring to CMBC of which Marstons have a 40% holding.
Carlsberg is the 4th largest supplier, by value, of beer to the UK market, Marstons are 5th.
Carlsberg have more than double the supply capacity against Marstons at 5.5mllion Hectolitres.
Carlsberg UK import beer and lager from it's parent company in Denmark, precise quantities are not disclosed as is the inclusion or otherwise of this product into CMBC. Is it reasonable to concluded this import is not part of the JV?

Dividends, when earned, from CMBC, will be distributed on the ratio of 60/40.
Cost savings are projected but not until year3, so based on existing gross profits and assuming sales growth will be more or less stagnant, £65.7m is generated which if fully distributed amounts to £39.4m to Carlsberg and £26.3m to Marstons. Marstons current earning from it's Breweries is £44.6m.
Add in the projected savings ( yr 3) of £24m and the possible distribution is £53.8m Carlsberg and £35.9m to Marstons.
For Marstons to retain profits from the Brewery JV equal to those of recent times there must be a 24% increment in disposable profits (dividends) from CMBC.
Marstons shareholders should not be under the illusion dividends from CMBC will flow directly to them, they will not but will be be consolidated into the Parent accounts...used to manage debt, fund development and enhancement of the Pub/Hostelry estate.
The company had projected to spend £90-95m this year on it's estate, having pulled development and re-furbishment too it's Pubs last Summer. It is realised the Pub Estate is in serious need of updating.
Given the success of the JV, Marstons is going to be left with debt of £1+billion, £350million of which is due for repayment in 2023,apart from other short term lending previously identified.

Questor gave an overview of the sector and, imo, did not dig down into fundamentals which support the SP of companys reviewed, MAB have a NAV of 450p and current SP of under 200p. MARS have a NAV of 74p and SP of 60p.
Judge for yourself which is the better investment.

AIMO DYOR

At the end of the last financial year debts of c£1.3billion, interim just announce show loss for 1/2 year of £40m, Banks approved a £70m additonal facilty for 180 days. Banks have deferred Loan repayments until 31st March 2021, Note holders have agreed technical waivers . Net income for current half year is likely to be not pretty.
If I have missed something will someone please correct?

On the positive side Carlsberg will pay in Q3 £239m.
The JV will not provide tangible benefits until year 3, in the mean time Marstons have got to at least tick over and deal with the unknowns following Covid 19.

Along with most other Brewers/Hospitality businesses, who are taking a prudent attitude towards protecting the balance sheets, it would be wise to raise funding and further reduce borrowings.