Member Info for londoner7

There's a party just before the numbers

https://www.pressandjournal.co.uk/fp/news/aberdeen/1537845/community-celebration-revealed-to-celebrate-imminent-opening-of-awpr/

correction

EPS $0.132

spindok, the delayed half year results are due 5th Sept.

The Breedon share price has a history of longish stagnant spells and then good movement. I see no reason to believe that Breedon isn't still performing well operationally so maybe another spurt after the update. There has been a lot of business activity so no doubt there'll be lots to digest - I'm looking forward to the update.

At the time of the Beast from the East I assessed all of the companies in my portfolio to consider likely impacts. For some business's the impact is enduring, e.g. if you forgo a trip to the restaurant because of the weather you are probably not going twice the following week to make up for it. The business is lost. Breedon's business is very different. The demand for material is deferred not cancelled, as demonstrated by the MPA data. Also, my interpretation of the data suggests a good Q3, although we'll have the update from Breedon before their release.

The Lagan acquisition has taken any potential divi off the table for a while but may be back for discussion in a year or two. I'd like to see something even if it's a token 1% - a divi widens the interest amongst investors.

rag, I agree, Regal was a big factor in the H1 performance.

I've listened to many calls, and although this was my first Cineworld call I got the impression that things are going well on many fronts wrt the Regal acquisition. The Q&A session is when managemnent is tested and there were some very interesting questions which added greatly to my limited knowledge of the industry, and I felt management gave good and positive responses.

A couple of tit bits that caught my ear. There was good fortune with the timing of the acquisition payment in relation to currency conversion which went a long way to covering the bank costs of the Regal deal. In spite of both dividend payments coming out of H2 cash and the payment for the NCM stake the FD (son) seems confident of maintaining or reducing the 3.8 debt ratio at year end. The 25% of the business not in the US tends to have a better 2nd half performance than the first, while the US tends to be more evenly weighted.

Watching the US numbers for the last few months I've been struck by just how much performance is impacted by the film slate. Most of the H1 improvement was down to the Avengers release in May. However, I get the impression that US cinema attendance is holding up well against all of the media outlets now available, Netflix etc. I'm not a big cinema goer but still like to catch my favourites on the big screen. The new 270 degree format looks like an exciting developement with some of this year's blockbusters, Avengers, Black Pather, having suitable content. An opportunity for 2nd showings when the screens are deployed more widely.

On the financial front the reducing financial costs over coming years, although linked to libor, should give a gearings boost to EPS.

All looks good at first sight.

For me the main three numbers are US revenues, debt and EPS.

US revenues up 14.3% against total US box market 9.6%. Both Cinemark and AMC were on 9.7% so it looks like Cineworld has hit the ground running with their Regal acquisition. Combined the three groups account for 64% of the market.

Debt 3.8x EBITDA. Their estimated rate at 2017 FY pro forma was c4.0 so I was looking for any reduction.

EPS $1.32. I doun't know the seasonal impacts on the US market but currency changes aside this looks on target for >20p for the FY.

Web call at 09.30.

Just to close on Cinemark.

The impact of South America on group revenues was due primarily to local trading issues, with some adverse impact from the World Cup. This resulted in an outcome below market expectations for Cinemark.

US admissions revenue up 9.7% for the first half, inline with the market.

I said, "This may be due to some capital shifts, so I'd be careful of any direct reading."

It looks like a currency effect. Roughly 75% on Cinemark screens are in the US with the balance in South America. The recent strength of the dollar would account for the difference in revenue at constant currency.

We should see a similar impact on Cineworld results out tomorrow. 75% of screens are in the US and the balance in UK, Europe and Israel. This was highlighted in the May trading update with revenues up 10.1% but 6.7% at constant currency US$.

results out. They look good and the 5 largest trades of the day in Cineworld occured within 5 moniutes of the Cinemark release so I guess there were traders looking out for them.

The read across to Cineworld should be good, US revenues up 15%, but pulled back by their south american market to 9% overall. This may be due to some capital shifts, so I'd be careful of any direct reading.

The number I want to see is US admissions (2018 on 2017) but I don't see it. Maybe it will come out in the call due around 1.30pm.

SJ, what's the name of the real ale pub?

It isn't so much what you drink as where you drink it. As I said previously, business rates are a large variable cost factor.

In most of the big cities business rates have jumped in the last year. In other places they have barely moved and I understand fallen in some places.

One of my favourite pubs in London is the Old Coffee House, in Soho. They do some very nice craft ales from Brodie's. Last month I was charged £5.20. On a previous visit about a year ago it was £4.50. That's a 15% increase in one year.

And more beer for your pound in Carlisle

!A CAMRA survey found 56% of respondents feel the price of a pint of beer in the UK has become ‘unaffordable’. London remains the most expensive place to buy a drink with an average of £5.20, followed by Oxford (£4.57), Edinburgh and Bristol (£4.35), and Brighton (£4.24), with the cheapest being Carlisle at £2.35."

Dinoken,
An interesting article. Like you I wish my pint of bitter cost £3.05. I live in a small town in Scotland with 10 bars along the high street, so plenty of competition but each has it's own character and at different times I'll visit half of them, but price wise they are all around £3.60 for a real ale. I'm in Edinburgh most weekends where it's closer to £4.50 - over £5 when the festival is on.

You ask, "However, what I have never understood is the huge difference in cost of pint in different parts of country"

I think the simple answer to that is 'business rates'. They are the largest cost variable, with duty and minimum wages fixed.

I'm always struck bt this sort of comment, "Beer drinkers will naturally look to more cost-effective ways to enjoy a drink, such as buying from off-licences", as if we need a daily fix of the stuff.

I prefer to watch football in a bar and socialise in a bar, while enjoying a pint of beer. I save on the Sky sub and don't have to try and get wine stains out of the carpet. If I'm at home I enjoy a cup of tea - saves the liver.

charles, you talk about NAV and ask about medium term attractions in very general terms so I'll respond in a similar fashion.

NAV is way down the list of metrics I look at but I don't discount intangibles. You may not be able to touch them but that doesn't mean they don't add value to the business. A barrel of beer is a mix of hops, barley, water and other stuff but the brand name stamped on the barrel adds significant value.

You ask, " what else would push the sp significantly higher in the medium term?"
A change in market sentiment towards the sector could push up the sp.
An improvement in market conditions , costs or sales, could push up the sp.
An earnings beat by MARS at the finals due in Nov could push up the sp.

Before investing I'd urge you to conduct more reseach. If you have any detailed questions I'd be happy to try and answer them.

Best, Londoner7

Thanks for the pointer. I'll check it out.

Shorting nominee stock isn't illegal but there may be things you can do to prevent it. I found this:

"There are two things you can do, the first is to certificate them but this is not obviously to everyone’s advantage but the alternative solution is simple. All you do is to phone your broker and put an order in saying that you wish to place your shares for sale at, for arguments sake, double today’s price. As they are 'on order' they cannot be lent out by your broker and in turn you are reducing the amount of 'free shares' out there that can be used for shorting purposes."

http://www.contracts-for-difference.com/Borrowing-lending-shares.html

My investment account is held by Barclays, who put a 90p target downgrade on MARS a while back. I've put my MARS holdings on a high limit order until 12th Sept which is the maximum period their system allows.

"systematic shorting in smallish amounts"

What is the source of your information?

I don't pretend to understand the pros and cons on Mosman’s asset in OZ but I do know that it is costing Mosman US$150K this year and it will be an ongoing cost to maintain the licence in future years, until a JV emerges to fund development beyond a review of seismic data or the licence is relinquished.

The exploration world is awash with companies trying to sell their prospects on the basis of seismic data. There are dozens if not hundreds on AIM alone. A few have added drilling to their seismic data, yet they still struggle to attract interest, look at SOU. HUR have had to go it alone with an EPS on Lancaster to attract interest to what is potentially a huge prospect.

The fact is, there are more prospects than there is capital pursuing them. We await confirmation, but it appears that for 22% of the capital costs of drilling and completing Stanley, Mosman will receive 16.5% of a 150 bopd producing asset. Great business for Mosman as a CAPITAL INVESTOR, but it is Baja who are the real winners here as their other seismic data lead prospects will now attract better terms from other capital investors. Meanwhile Mosman hope that 3rd party development around their OZ prospect will help them close a deal on a JV. A wider view might reveal a long list of Mosman sized prospects in the area, all waving their 'For Sale' placards. An enterprise with capital can pick and choose. The investment case here is that they pick Mosman, but it isn't a certainty. That's why Mosman turned their attention to US producing assets. Their timing with respect to the oil price has been impeccable, but their cash outflows still exceed their inflows and until that changes questions will be raised about funding.

Bamps, when I started investing in the early 80s there was a saying, 'don't invest in the company paying your wages'.

It's easy to forget that in those days knowledge of the markets was more limited, dealing could only be conducted via the telephone or post, and the closest one came to a latest share price was via teletext on your TV. As a result many investors played 'safe' by investing in the business they knew, the one that also paid their wages - hence the warning I headlined.

Today there are save/invest schemes that encourage employees to invest in their own companies at a discount and no risk These are attractive and if the business is sound should be taken up, but not by your entire investment or pension.

Executive directors have a much more attractive share sheme - the LTIP award.

These run over a 3 year period. The option price is fixed at the start and if modest targets are met, which normally include a relative TSR component (basically the share needs to rise) then the returns can equate to 100% - 200% of salary. As I recall last years LTIP award was priced at 121p, so the end product in 3 years time might not be attractive. However, unless the share price makes a significant recovery from its current price this years award priced below 100p could look very attractive in 3 years time.

With these awards available every year I can understand why your typical jobbing executive doesn't invest his/her own cash salary in the business paying it. Don't confuse these guys with the billionaire entrepreneurs, like Elon Musk and Co currently shaking up the world.

I never thought that I would want a Tom Cruise movie to do well. This investment lark makes for strange bed fellows!

Interims due next week. US revenue numbers have been holding above the level when Cineworld last updated so I expect the overall revenues to be good. Having only got into Cineworld post the rights I'm not yet familiar with the issues impacting their profitability but the integration of the US business is likely to be key and I guess an unknown for even the long term observers. The numbers below the top line and commentary on integration should be interesting, and hopefully add some clarity to the full year outcome.

http://www.mineralproducts.org/18-release25.htm