The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Comment on MAB results...
‘’Analysts at JPMorgan said the company's positive commentary on the resiliency of like-for-like sales and abating cost inflation is "encouraging and should bode positively for the broader UK pubs sector".’’
No. Still don’t see it.
What is the argument for doing this globally ? I can’t see any supply & distribution benefits over a national company. ‘Upper Crust’ is a meaningless brand for a traveller from the far east say visiting a UK airport. Flowery words are one thing, delivering something cost effectively in Beijing, Heathrow, Atlanta & Birmingham Rail station better than a national chain - how EXACTLY is that possible ?
Can someone explain to me what the rationale is for a global business here. I struggle to understand how there are any synergies for a global business over a series of local/regional ones.
This is not a brand business, nobody goes to upper crust etc, unless forced to because they are trapped in a travel terminus. So not like mcdonalds or burgerking etc that have supply & logistics synergies from 1000’s of stores in any one country.
Is the global ambition here nothing but an egotistical quest for turnover with no basis for competitive advantage ?
Well FY25 might easily see £100M paid off debt, so 2026 Billion targets look realistically achievable to me.
In contrast a rights issue at this price level would be complete madness and just couldn’t raise enough to make a significant difference.
Anyone wanting to launch a takeover ought to get on with it. The picture here only seems likely to improve now.
Looks positive for the future. Hopefully this is an end to one off impairments which have undermined statutory results. I think a level of continued investment in garden facilities etc is positive and good focus on customer satisfaction. It would be interesting to know what the future benefit will be from energy costs falling in 2025/26. Although interest rate fixes/swaps provide protection the flip side is this will presumably limit the ability to benefit if and when interest rates fall. Hopefully CMBC is going to produce a stonking contribution in the second half.
Interested to see what the new man can bring, especially when you look at the success of Hollywood Bowl in providing a family entertainment venue - surely room for some pub garden family events ?
Yes, this is only a return to Jan price so far.
In theory a company with a £900M+ turnover that makes no profit is worthless, if it makes 5% profit it is worth £500M. It is the old story of the difference between two large numbers - revenue & costs.
Again in theory only, a 1% cut in interest rates adds £10M to profit & £100M to market cap.
Isn’t the other scenario here simply an opportunist asset stripper coming in. All that is required is recognition that the sum of the parts is worth more than the whole. Simply talk to cosmens to understand what price they will pay for ALSA, then work out the sale value for NA and for the UK business. Ideally you would line up 3 buyers, or perhaps just sell NA and ALSA and the UK rump would increase in value anyway for a refloat.
TBH I struggle to see what the synergies are for a multinational operation, especially across the pond with a very different business culture.
TBH any presentation pack has been in place for weeks now, only needs updating with the figures agreed with the auditor. The announcement should only be confirming other numbers already flagged. Not sure they will say much about us sale except ‘process ongoing’. The forward forecasts for the next 2 years will be key.
I think giving a vague reporting date was a mistake, it just encourages doubt and speculation. It makes the share price a plaything for non-investors as not only do we not know the content of the reporting, we don’t know when to expect it either.
Seems to show a lack of understanding of the markets. All may be satisfactory of course as they seem a bit oblivious to the market impact of all the messing about and uncertainty.
The call was specific to the RNS which was about delayed release of last years results. They can’t go off piste and make other statements about current trading or disposals which were not in the RNS. To do so would be giving information to the call attendees which hadn’t been published to the whole market yet. I imagine they would be fined, struck off etc for such behaviour.
Patience.
So if EBITDA is say 160, take off interest of say 60, and then provisions of 95 is breakeven ish. But on a forward forecast is at least 100 pretax for the year ahead likely considerably more, so currently on a forward PE of 5 ?
Seems like it should be a turning point perhaps ? We can only hope.