Marston's Share Discussion Threads

[barnes4] 17/4/2024 12:56

High time this outfit comes out with some soothing updates

[fenners66] 17/4/2024 12:27

New all time low?

[fenners66] 17/4/2024 12:26

I don't think there is any danger for the company - however there may well be a danger for the shareholders.
Whether that is a debt for equity swap , or a massively dilutive fund raise, or just higher interest rates ensuring there is no return for shareholders for many years...

[barnes4] 17/4/2024 11:50

Well NY boi
I wouldn’t be parting with 100K unless I was very sure this wasn’t a basket case

So I disagree with you

[sooty snipes] 16/4/2024 16:15

Well a month ago the CEO bought £100,000 worth of shares? Would he do that if the company was in trouble? I don't think so. I bought in at 28p so a bit under water but I can wait. Happy to hold

[fenners66] 16/4/2024 13:32

Just read the financial instruments note and confess I do not follow there wording on just how the numbers are influenced on their using floating-to-fixed interest rate swaps.

I do note "The fixed rate of this interest rate swap at 30 September 2023 was 6.0% (2022: 6.0%)."

[fenners66] 16/4/2024 13:31

rmillaree - The company has met its obligations to tell all just what they have done so far....
The market works on what they have not yet told us or cannot tell us.

The market has to make future assumptions and look forwards - otherwise every quoted company that went bust
would do so with their share prices at say an average - not at the all time lows they generally reach before the company discloses the info.

We know the market is betting on something and that generally the large investors are aware, or have done more in depth analysis of the accounts etc, of some things that retail investors are not.

So Stonegate already looking to refinance next years borrowings and not getting anywhere whilst a much smaller amount the market is perhaps reading across here.

[rmillaree] 16/4/2024 13:16

In other words there is becoming an urgency to get that bit done - that I guess is what the market
is aware of given Stonegate saying they cannot refinance stuff due next year.

Whether it is an unrgency or not it would probbaly be better to ask the company than me - note they had £230 mill headroom on their bank facility - although that expires in 2025 i wouldnt prume they would have an issue rolling that over - although i wouldnt presuke the opposite either.

I would like to think the board have senn this coming and have suitable plans - one would need to ask them though as the shareprice is in the doldrums - thats not unusual though sometimes the mere hint of uncertaintyu can be siezed on by the market - what is particulalry dangerous though is the potential double whammy of forced placing whilst shareprice is in the doghouse.

anyone who wants something more than gossip is probably best contacting the company in that regard.

[fenners66] 16/4/2024 13:12

Swing in % terms ?
Maybe not on the whole estate.
But the securitised debt tells us tha carrying value of those pubs was 1166.6 vs 1166.7 so no change
Maybe just a coincidence...

but leaving the swing as a larger % of the rest

I am just surprised that in the climate of the last few years there should be an upwards revision followed by a downwards

[fenners66] 16/4/2024 13:07

The other thing that consistently annoys me about "adjusted" numbers
is the unamortised finance costs that never run to term (most companies)
I have seen year after year of "adjusted" or in other words "exceptional" finance costs
written off.
If they do it every time / every year its the ordinary course of business !
It is underlying !

So at the last balance sheet date Mars had £3.4m with less than one year left.
If they can reissue that debt no doubt some bright spark will look to reanalyse some of that as "non-underlying"

[fenners66] 16/4/2024 13:01

rmillaree
The maturity of borrowings note p 130
which of course is dated as 30-9-23 i.e. over 6 months ago....

Had
due <1yr 66m
>1yr<2yr 322m

so that 322 is less than 18m now and was up from 266m the year before.
In other words there is becoming an urgency to get that bit done - that I guess is what the market
is aware of given Stonegate saying they cannot refinance stuff due next year.

[rmillaree] 16/4/2024 12:58

How do they get so much of a swing yr on yr ?

thats doesnt seem to a huge variation in % terms ??

[fenners66] 16/4/2024 12:21

Revaluation of land and buildings 2022 + 62m
Revaluation of land and buildings 2023 - 24.3m

How do they get so much of a swing yr on yr ?

Given the state of the pub market this year what should we expect as they are supposed to be on
"an open market value basis"

[fenners66] 16/4/2024 12:13

Can anyone make head or tail (on first read) of the Interest rate swap movements note on page 117 ?

Moreso can anyone guess what happens in the following year ?

[fenners66] 16/4/2024 11:34

Has anyone noticed the retained earnings line on the balance sheet?

So Marstons been around for how many years .?

Retained earnings (6.5)m

Note the P&L account has the Profit / (loss) descriptor

But the balance sheet does not say earnings / (deficit)

just a bit too unpalatable for the BOD that after all these years , Marstons has net cumulative Losses....

[rmillaree] 16/4/2024 11:24

jeffian

the fact that they may impacted less than some doesnt alter the fact that higher rates will impact them thats pretty basic

yes rates are hedged where posible and very sensible - presumably each time they hedge though that needs paying for if future expected rates are higher now than they were.

Note they have £250 mill of securitised loan notes that need to be repaid between 2023 and 2031 - half of which need to be repaid before 2027. Note they have another £200 mill which they need to repay between 2027 and 2032. The lack of having to sort replacement financing here immediately doesnt mean its a complete non issue. I doubt many (if anyone) would want to be lending to marstons at present at rates of 5% !! - seems much less risky similar returns elsewhere.

I am not saying Marstons is a basket case - but lowly shareprice could be disatorous for sharholdsers if they ned to go cap in hand yest again to shareholders to raise cash with severe dilution.

[jeffian] 16/4/2024 10:48

It's amazing how often I see comment about the impact of short-term interest rate movement on Marstons' P&L. The structure of their debt means that their interest charge is largely fixed, so short-term impact is negligible. They neither got the benefit of excessively low rates but nor will they be impacted by higher rates.

"Interest
Our borrowing is largely long-dated and asset-backed. The securitisation is in place until 2035 which provides financing security and high visibility of future cash flows; this is of particular importance in an environment where interest rates have been rising to curb inflation. The securitisation is fully hedged until 2035. Other lease related borrowings are index linked, capped and collared at 1%–4%, providing protection against high inflation. Of our £300 million bank facility, £120 million is now hedged. Overall, we
are 93% hedged, providing significant protection against changes in interest rate movements that may occur during the year."

[heatseek77] 16/4/2024 10:29

Careful the debt is less than the AA when it's was bought by US private equity and the AA NAV was pretty much zilch

[careful] 16/4/2024 09:35

Good point about net asset value.
The difference between two large numbers, net debt vs assets.
If assets were 10% overvalued then net assets would be much smaller.
And the converse, if asset values are prudently valued then net asset value could be way over 100p per share.

I thought the strategy was to sell assets that they were no longer interested in, retaining the most desirable.

The net debt pile is too high, but it is not ridiculous.
Reading recent reports and updates closely, the trading and cash flow situation is quite good and moving in the right direction.
We would welcome a reduction in interest rates, better weather and a stronger economy.

Reducing the net debt target to £1bn or less whilst increasing turnover to £1bn is a realistic target.

Over the next few years this will be a grind, recovering from the near death experience that was Covid and the disaster of bungling Boris, but there is a good chance that Marston could be worth much more that todays derisory valuation. Today we are priced for failure.

[ny boy] 16/4/2024 09:15

I would seriously question the NAV, most of the good sites were sold off years ago. Highly questionable imo and then the debt pile is ridiculous, unsustainable unless interest rates fall rapidly..highly unlikely.

The chart from the beginning of the year is awful

Not a serious investment

[fenners66] 15/4/2024 22:48

I can't see UK interest rates moving lower until the US does as the UK cannot afford to import $ based inflation.
Since the US economy is doing just fine the prospect of their interest rate falling is being pushed further back as each new piece of economic data is released.

[rmillaree] 15/4/2024 18:10

I think that is the issue here - i would guess they have alot of decent laregr outlets now and i suspect most of those are probably now in as good a sweet spotb as we will get. If they are only expecting to make £50 mill profit and they need to "maintain" the estate" how long is it gonna take to get decent inroads into debt?

I suspect if interest rates came right back down to prior lows and they were trading well things might look up debt has remained stubbonly high though as things stand and cost of servicing debt must be higher and have less options than was the case when interest rates were bottom dollar.