Member Info for londoner7

So adding this £16.5m to the £9m for Humberside we get to £25.5m spent this year on expanding the core aggregates portfolio. Alongside divesting peripheral RMC plant - I read this as sites remote from Breedon quarrys. (Note that the acquired quarrys at Penrith and Wrexham each have two Breedon RMC sites, on average, 11 miles away.) At the end of the day whether cap ex is spent on acquisitions or organic development is irrelevant providing the returns justify the spend. No doubt these newly acquired quarrys alongside the two new quarrys due to open by end of this year are/will be candidates for organic cap ex. As Qd22 and spindok point out this bodes well for the future - a grind up in revenues and margins even before the antisipated infrastructure spending hits in 2019 and beyond. Londoner7

http://www.insider.co.uk/news/tarmac-sell-daviot-quarry-breedon-11686137 I'd forgotten the Daviot quarry is the site of the asphalt plant Breedon opened last year. https://www.agg-net.com/news/breedon-open-new-asphalt-plant-at-daviot-quarry As I recall there was talk on this board that Tarmac also had plant in Breedon quarrys so nice to see that no Breedon quarrys were involved in the transaction. Londoner7

“The transaction is not expected to have a material impact on the Group's earnings.” This comment caught my eye and I wondered, “why bother?” But a follow-up comment adds clarity. "This deal brings significant benefits: it adds to our reserve base; it is margin-enhancing; it releases value from peripheral readymix plants; and it will enable us to replace third-party aggregates providers with our own sources of supply." So essentially, the deal should accelerate Breedons progress to its 15% target EBIT margin. How big is the deal? The £4.9m net cash is light but at least Breedon are spending. 25mt adds 3.3% to total reserves. To put this into context this year's aggregate extraction will be about 15mt, so the additional reserves represent about 20 months of total Breedon extraction. Looking back at the Humberside deal in August, £9m bought one quarry with 3.1mt of reserves along with other activities which are hard to cost. Today's deal brings 8x the Humberside reserves so the deal appears more significant than the £4.9m net cash suggests. Londoner7

Some clarification from last week's RNS. "A sovereign wealth fund has agreed to co-invest in the Greidinger Family Holding Vehicle." My reading of this is that the SWF is contributing alongside the GFHV in GFHV's takeup of the rights, i.e. they are sharing the take-up. Better informed people than me will have a better appreciation of what this means. What is clear is that Cineworld's major shareholder (GFHV) want this deal to go ahead. They have agreed to a termination fee of between $4-75m on it failing subject to certain conditions. Cineworld management have agreed to a termination fee of $20m, including if it is rejected by shareholders at the general meeting in Feb 2018. A decent but not huge commitment representing about 10% of last years operating cash flow. In my experience, with his degree of support and commitment, this deal will go ahead. Details of the rights issue are expected to be published in Jan. My back of an envelope calculation indicates a 3 for 2 around 450p. To be clear this does not mean that I expect the pre rights price to fall to 450p simply that rights issues tend to be issued at a discount to current price. The split and price can vary but I believe I'm right in suggesting that an existing holder with about £10K of shares would be required to invest another £13K to take up their full rights. If anyone has a very different number pls let me know. The RNS includes detail on managements reasons for the deal. For anyone looking to invest more than chump change it is required reading. You can be sure that big houses will already be pouring over these numbers and I guess GFHV already has a handle on them. All a bit heavy for me at the moment particularly as I have only scant insight into Cineworld's financials - I've made small trades in Cineworld over the years - but I might add the RNS to my xmas reading list. Though it's the follow up analysis that eats up the time. Londoner7

"A state-owned Singaporean fund is to become a shareholder in the London-listed cinema group Cineworld" 'To become' is the key phrase. I'd like to understand the argument for this deal from current holders - the ones that were holding when the share price was close to 700p. The author is a bit out of touch with this comment, "Investors in Cineworld responded cautiously to the news, sending the shares 0.5% lower on Tuesday as they digested news of the proposed rights issue." Londoner7

Thanks for the useful link. Yes a reiteration, as was last Thursday's at 1,010p. I wonder why they do that. Perhaps on any recovery they hope you only notice their last update.

and a north-westerly forecast for the weekend! Peel Hunt have raised their forecast from 130p to 140p so what resistance - PH think we'll blow through it. ;-)

The Berenberg tip came out on the 30th.

and I don't have a view on the investment case but my sympathies are with the pre-announcement holders. On minute you are riding a business with a simple business model antisapating the next Hollywood blockbuster and the next you are bucked off by a left of centre management decision. What do the institutional investors supporting this deal see that the rest of the market doesn't? Londoner7

It's an illiquid stock in the quiet periods between updates but I've found that buying modest lots on limit prices gets around the large spread. I now have a decent stake. Time will tell if my patience pays off. Londoner7

From the prelim report: "During the year we entered into a five year agreement to become the exclusive distributor to Punch B, comprising a portfolio of c.1,355 leased and tenanted pubs nationwide, in addition to a similar contract to exclusively distribute to Hawthorn Leisure�s c.250 -strong pub estate in England and Wales. Since the year end we have entered an agreement to be the exclusive distributor to the Brakspear Pub Company with effect from November 2017". On reading this I wondered if we were effectively seeing the return of the brewary tied pub. But it then occured to me that a key difference is that Marston's bring 5 breweries to the deal. This theme is expanded further in last night's Investor Chronicle 'Buy' update with the view: "Marson�s has secured direct commercial access to another 1,700 pubs through new distribution contracts, along with UK distribution rights for fast-growing Catalan lager Estrella Damm. Have you ever wondered why Coca-Cola is primarily a distribution business? Control the channel to market and you�re halfway there." Londoner7 .

Very upbeat presentation on the web site. I'm not sure if management were pleased with this morning's market response or they had been sampling the product freebies. A few key points for me: We knew that the share placing for Charles Wells was going to impact EPS growth with broker concensus for a drop so the 2% increase, albeit partially attributed to a lower tax charge, was welcome. I suspect forecasts for next year will start to come out around +3-4%. Any rerating to a low teens PE would be a great boost to the sp. I was surprised by some talk in the market about a threat to the dividend. The CEO has been in place for some time predating the 2008 financial crisis and Marston's have a record of supporting the dividend. The 3% increase suggests this level of increase will continue in the absense of any significant downturn. Of course it is right to consider the dividend payment in the context of ongoing debt. Their debt structure has been any area I've focused my attention on prior to these results and a number of ratios/trends were a concern to me. So I was pleased to see that the CFO had focused on the debt structure this morning addessing my concerns and clarifying some areas that were unclear to me. I'd guess he was aware of some concerns in the market. While I'm primarily a LTH I still trade around my investments and I was pleased to see recent price action hold the 100p level, this puts a fairly solid floor in against future market weakness or events. I'm maintaining my 50% stake looking to add on an improvement in consumer sentiment, but encouraged by recent (post financial year) like for like improvement, which supports the view that much of the weakness in the late summer trade was weather related. Londoner7

"The centrepiece of the budget was a series of targeted housing measures. Cash for house-building would include: a �630 million small sites fund; �2.7 billion to more than double the housing infrastructure fund; �400 million for estate regeneration; �1.1 billion to unlock strategic sites; �8 billion of new financial guarantees to support private building; and an additional �34 million to develop construction skills." Over the last few days the chancellor has frequently said that there is no silver bullet to resolving the housing crisis. The supply side measures described above are all moves in the right direction provided they can be effectively implemented. The fall in share prices of the big house builders indicate the market believes they will be effective. It is not in the interests of the big builders to see supply side reforms because at the margin they should reduce house prices and increase competition in housing supply. But why spoil it by a headline grabbing demand side measure � the removal of stamp duty for first time buyers. It can only be a political gimmick, which I suspect will be exposed over the coming days. It ****es off anyone who's bought recently, is a bung to anyone buying in the near future, and will be absorbed by higher pricing for first time buyers further out. It also increases fraud and complexity. What is a first time buyer and how is it proven? It will be difficult to unwind, just like the other demand side error -help to buy. But that's a problem for the next parliament. Rant over. The doubling in the housing infrastructure fund is probably the biggest budget boost to Breedon provided the funds aren't swallowed up by the GLA. Intro to HIF - Funding will be awarded to local authorities on a highly competitive basis providing grant funding for new infrastructure that will unlock new homes in the areas of greatest housing demand. I've no doubt that alongside the Highways England funding housing and infrastructure will ramp up over the next few years and as Breedon said in this morning's update these sectors represent two-thirds of their end-user market. Londoner7

I was looking at a rounded number for asphalt at the half way stage - 0.9m. In the interim presentation it was up 2% so no change in that runrate today, still 2%. However, the improvement in revenue since the interims is better than I initially thought, which looks good alongside the improvement in organic productivity highlighted in the outlook. Londoner7

I agree. Asphalt was running flat at the interim stage so a 2% lift at the 10 month stage looks good and is reflected in an improvement in the revenue runrate (Hope didn't add any asphalt to the mix). I was hoping for EBIT guidance 'ahead of current consensus' but the update is wide enough to include my target of 4.3p EPS on �5.7m interest charge and 20% tax. Still no news on any corporate activity but amongst the rumours a while back there was talk of regulatory factors delaying any closure on the asset swap till Jan 18, so perhaps Breedon are waiting for closure before confirming any deal. Londoner7

I agree. Asphalt was running flat at the interim stage so a 2% lift at the 10 month stage looks good and is reflected in an improvement in the revenue runrate (Hope didn't add any asphalt to the mix). I was hoping for EBIT guidance 'ahead of current consensus' but the update is wide enough to include my target of 4.3p EPS on �5.7m interest charge and 20% tax. Still no news on any corporate activity but amongst the rumours a while back there was talk of regulatory factors delaying any closure on the asset swap till Jan 18, so perhaps Breedon are waiting for closure before confirming any deal. Londoner7

Sirious, I think you may have misinterpreted the comments on the Marsden quarry. Breedon don't own it so any issues are unrelated to Breedon. The question is whether Breedon pick up any of the business - specifically the quarry itself. jamesm85, your 'any news' comment is timely. A trading update is due out tomorrow (Weds). Expect some numbers on supplies and revenue for the 1st 10 months but IMO the key statement will be their forecast on the group's underlying EBIT for the full year. Their guidance last march was for �77m and current broker concensus is around that number. Breedon also have a habit of announcing acquisitions at the trading update, so we may hear news on an asset exchange with Tarmac which was discussed on this board a couple of months ago. Londoner7

I wouldn't be surprised if the new owners bought it with half an eye on it's redevelopment potential. But you can imagine the reaction of the local NIMBEYs to a planning application. No doubt there would be talk of some sort of community action to maintain its status as a community amenity. Just a shame if they don't have the foresight to back it while it is still (just) a going concern. When I was there it was run as a family business. As I recall the daughter ran the bar, the mother the kitchen (after her day job) and the husband ran a second business near Bristol during the day - seem to remember he spent most of his time my side of the bar. They also employed a couple of locals on a part time basis. In hindsight sounds like a labour of love rather than a business. Londoner7

After my recent post I remembered that the pub had been put up for sale and wondered what became of it. http://www.rightmove.co.uk/commercial-property-for-sale/property-31054978.html I was there in 2010. I'm pleased to say that following the recent sale the pub remains in business. But business detail makes for sober reading - �126K turnover with a 49% gross profit. I suspect that the selling price primarily reflects the property value with little attributed to the pub business. Recent reviews look favourable so I hope the new owners can make a success of it. If I ever find myself in the area I'd definitely pay a visit, but hope the locals now add their support before it's too late and lose a pleasant local amenity. Londoner7

If you register with the Telegraph you can read one premium article a week. Trent, you're right that the article doesn't highlight anything new but as a Marston's investor I thought it was worth reading. It highlights the current trends and challenges faced by the beer and pub trade. More topical it points to data from the British Beer and Pub Association showing a 3.6% decline in beer sales in Q3 - data was released two weeks ago. There are some interesting stats on their website. The opening piece of the village landlady bemoaning the 5% of custom she sees from the villagers tallies with my experience a few years back when I lived in an isolated village in the west country. It was the only pub for 5 miles after surrounding village pubs had closed through lack of business. I was renting for a summer but only chose the location because it had a local pub. I think to say 5% of the villagers were regulars would be generous but the estate agents never failed to highlight the pub in house sale instruction details - recognising its asset. Londoner7