Member Info for londoner7

WTF2012, I can almost feel your pain. I think BM has you by the balls and just keeps squeezing! ;-)

Trent700, sadly I left my Marston's discount card in Scotland, where, as I said earlier, I have no use for it. As an investor it was interesting to check out a Marston's and try and get a sense of the business. In summary, I came away with a good impression and feel confident that with a good summer the share price will get out of its current dive returning to the giddy heights above 100p ;-)

During my 2nd visit I spoke to the bar manager about his expectations for business during the World Cup and local competition generally. Following on from his experience of the friendlies he expected business to be good during the World Cup. I made a comment that I felt they were missing a trick by not having a couple of larger TV screens particularly in the two larger areas. A 2nd member of staff joined the conversation to say that they wanted to keep one of the areas toned down for family groups who may only have a passing interest in the football - I guess she meant TV screen on but volume low. This was a good point and made me think that they have given this more thought than perhaps I gave them credit for - what do I know! However, if the friendlies were well attended and larger screens were in place I think the experience would have planted a stronger seed in the locals mind that the Honey Bee could be a good place to watch the tournament. The catchment area is large with the nearest pub some 12 minutes walk away. That said, maybe the one for five beer offer is a part of the World Cup promotion and that counts more than a larger TV screen. On the competition generally I mentioned the Chinese in the village centre. The manager said that it was a very different market and they didn't see it as competion (I had noted earlier that the Chinese had stated a Sunday lunchtime offer). He also said that some customers at the Chinese came to the pub while they were waiting - I assume - for their takeaway. He said that the main competion was from a similar themed pub called Charter about 12 minutes away on foot. Although I grew up in the area I couldn't figure out where it was in relation to the Honey Bee. As luck would have it, while I was waiting for my bus back to town, with a return ticket in hand and my bus due, an enterprising taxi driver pulled up and offered me a ride into town for £1. I took up his offer and on a quicker and shorter ride into town we passed the Charter pub. It sits between two large conurbations rather than in the centre of one like the Honey Bee. I'd be interested to know which is the better location. Maybe one day I'll check both out on a Sunday lunchtime. Londoner7

On my second visit on a Monday evening (again 7pm ish) it was very quiet. There were about 6 diners and the same again drinking. I'd again planned to have a meal later in Wethespoon's - lamb shank with a beer for £9.99. But with that in mind decided I'd have a meal here for comparison. No lamb shank on offer so I went with a mid priced pizza and a beer for £11.34. I was tempted by a top end pizza for another £2 but I wanted to keep the price comparison as close as I could to Weatherspoons. On pricing there was no doubt that Marston's was premium compared to Weatherspoons, like for like probably 30% more expensive. But the ambience in the Marston's pub was considerably better. The layout with five separate areas and the generous spacing made for a much more pleasant experience than the typical Wetherspoons. The pizza was very tasty. I guess the real test was did I regret not having the lamb shank in Wetherspoons and the answer was, no! Interestingly, in the village centre the fish and chips shop was empty as I passed, the Indian had two diners and the larger Chinese restaurant had four dinners. I stopped off at the Wethespoons in town on my way home (8pm ish). Nobody was dining and there were only 4 people drinking. Monday nights! I'll add to my observations later.

I started to build a stake in Marston's just under a year ago, and until last weekend I had not visited a Marson's pub for several years. I live in Scotland between Edinburgh and Glasgow and Marston's have nothing in either of those two great cities apart from a 'Foundry 39' in Edinburgh which isn't representative of Marston's pub estate. I'm a regular of Wetherspoon's visiting for a meal and a beer 2-3 times a week. I'm familiar with the format and menu and like all people have a degree of resistance to change - I know what I'm getting, feel comfortable in the surroundings and consider the product acceptable for the price. Last week I was visiting family down south and twice visited a gym in a suburb of Aylesbury called Fairford Leys. Fairford Leys is a large housing development on the outskirts of the town which has built up over the last 20 years. It has a 'village centre' with a wide mix of retail outlets including a fish and chip restaurant, a small licensed Indian restaurant and a large licensed Chinese restaurant. The only pub is a Marston's destination pub 100m from the centre. The pub is a 'Generous George' format called the Honey Bee. The format and location seems to represent Marston's target market in that it is non-urban, premium, with little local completion. There's no accommodation, which seems appropriate as there's little in the way of business locally. On my first visit early on a Saturday evening (7pm ish) there were 30-40 people drinking and most had meals - I'd guess about 25% capacity. The pub was decked out with flags for the World Cup and had around five 32"-42" screens and one larger screen in the games area. There is a very attractive and large outside space. I had a pint and checked out the menu, but decided I was going to stick with my original plan of a meal and beer at the Wetherspoons in Aylesbury. But one observation - I was surprised to be offered a stamp discount card with my beer, one free beer for five. I have never had that offer anywhere before and it surprised me considering Marston's claim to avoid discounting. To be continued ...

Appleby, you make what appears to be a 'no brainer', but (you knew a but was coming) I think you must take account of the market sentiment and the real cost of debt to the company (not the 0.5% bank rate). There are many companies in a similar position to Marston's in that their cost of debt appears below the dividend yield, so if it is a no brainer then why aren't they all increasing debt for buy backs? Marston's have three forms of debt: Property leasing which funds their new builds and is secured against the asset. In a recent call the cost of this debt was put at 4%. Securitised debt is secured against cash flows with covenants attached. Securitisation is currently 54% of EBITDA. The £320m bank facility is essentially an overdraft facility - a facility which has been agreed with a syndicate of banks who will balance interest rates against risk of default. In 2017 the interest charge was £78m and the end of year net debt £1,329m. It was similar at the half way stage so I'd guess it is close to the running average through the year. This represents an interest cost of 5.9%. If Marston's approached a bank seeking additional debt for buy backs I suspect the cost of this debt would be above the current 5.9% level backed by property and cash flows. Marston's share price is where it is because of the market's concern with its debt level. I don't think adding more debt would be helpful. Londoner7

Hi Bamps21, just to qualify your comment - I have posted to the LSE Sound Energy chat board but I have never been invested. It's one of a few companies with an interesting story I like to follow. I posted last week to get clarification on the value of the pipeline RNS. As usual a meaningful conversation with a couple of posters was drowned out by the hype which follows the stock. I'm not yet sufficiently convinced by the long term case to invest. Londoner7

Mike, there are a couple of ways of looking at this. Pre-rights, Carllion etc, broker concensus earnings were 170p. With 83.2m shares in issue at the time the dividend payment covered twice would be (1.7*83.2)/2= �70.7m. The 28p interim was paid on 83.2m shares at a cost of �23.3m, leaving (70.7-23.3)= �47.4m shared by 111m shareholders post rights = 43p final dividend. Post interims my expectations for full year earnings increased leading to a 46.5p final, assuming GFRD stick to their 2x cover on pre-exceptional earnings. Alternatively, broker concensus is for 76p total for the year. With 28p paid at the interim perhaps it's simply 76-28=48p final. But I don't know the basis for these numbers. Londoner7

GozoMike, I agree with your 1.16 bcf number. It makes more sense. 60MMcfs represents only 5% of capacity - a more commersially viable option. I had a 200MMcfs number in my head from a previous Sound update, obviously related to something else.

Just for clarification I dropped a decimal on the conversion to a capitalised share price value. $73.6m pa subject to the conditions I stated.

wh0sthedaddy, thanks for the correction, 6.25cents it is. Always feared dropping a decimal place. Makes it more interesting. Using $8 mmcf, and this time deducting the $20m low fee I missed on the last calculation gives us $73.6m. Close to my original number but for a decimal point ;-) Londoner7

A good step towards commercialisation. This is my attempt to crunch the numbers - please highlight any errors. US$184 for consortium to build 60mmscf/d pipe and gas processing plant. Sound and partners pay consortium a fee assessed on an internal rate of return subject to a maximum annual payment of US$45m per annum. The maximum would equate to 24% return. What might be the low side? Let's say 10% or US$20m. The new pipe will feed into the Gas Maghreb-Europe pipeline system, which I believe is a 200mmscf/d system. There will be a fee for this access. What is the delivered cost of Moroccan gas? I have no idea. Help! Using the US HH price of $3 / thousand scf, annual gas revenue would be (60,000,000/1000)*3*365= US$65.7m. Using UK price currently around 50p/therm and �/$ 1.35, annual gas revenue is (60,000,000/100)*0.5*365*1.35= US$148m. Assuming Moroccan gas price is similar to UK, let's use US$148m. Sound interest 47.5% = US$70m pa. With 1.12B shares, this represents US cents 0.62 or 0.46p. Capitalise this @ 10x gives us 4.6p/share. I have assumed there is no additional capital cost for Sound and partners to extract gas at the well head - covered by the gas processing plant? I assume all operating costs at the well head are also included. A Maghreb-Europe pipeline fee is not included. Londoner7

It is a flag ship venue - the 100 room Ebbfleet lodge opened earlier this year. And when you're in the beer business no doubt a jolly affair too.

The visit to Ebbfleet was planned several months ago and was mentioned in the recent call. An analyst visit is standard PR stuff. The RNS simply informs other parties that the presentational material will be available on the webste.

I got off but was surprised by the dip after the results. I struggled to get a clear view of the business and prospects. I guess it's one for the traders not me.

The quarry does help fill a surprisingly large gap to the north and south. I wonder if Breedon are looking over the Skene Group just to the north but south of Edinburgh?

spogbat, the only thing I know about grit is that hurts if I get it between my toes. I'll take your word on the benefits of 'hard rock'. But I guess from your comment the material lends itself to the production of asphalt. It's this combination of infill acquisition, with lower head honcho costs, and associated capital expenditure on say asphalt plant that boosts both revenues and margins. A nice combo. I've no doubt there are more acquisition opportunities in train, which will come to fruition over coming months and years, and from the presentation of Lagan's recent expansion in ROI it sounds like Breedon should hit the ground running there too. Londoner7

"instead of still being saddled with $50m of debt" volcano, that made me smile. I haven't checked your figures but most investors in North Sea Oilies can only dream of such a number, then they wake up and cry.

sweatysock, good post on the recent 110m share placing. I also noted the absence of Angel from the release. (preston bob - nothing wrong with a friendly taking the placing, sadly it is allowed on AIM, but would you have taken a rights offering? Not withstanding the broker costs.) But I was staying on message with my previous comments on Welch. You may have noticed that I didn't reference the Feb placing. That was because it didn't reference Welch. It talks about funding for acquisitions which I take to mean any additional payments for a potential extra holding in Arkoma. " .... we are all AWAKE!!!" Good! But it was a long hibernation. Best, Londoner7

firepisces, thanks for the link. I just took another look - it is a wealth of information. I particularly like the purple numbers showing gross take todate and the number of days since first release. May numbers should be good and it doesn't take much to extrapolate potentially good numbers for Q2.