Marston's Share Discussion Threads

[pubs advisory service] 29/1/2020 16:24

Thank you, the Anderson awards show everyone a failure of Marston's in house RICS qualified valuers to account for wastage and sediment in the assessment of rent, it is a massive problem and unpicking it will be very expensive. The board should really be fessing up to the problem not doubling down as that only serves to increase the final cost of redress and as they know full well from just trying to fight off a couple of PCA arbitration's its big money already. We see investors as victims too after all you have never been informed by the company about what their staff have been been doing when setting rents, you had to find out from other sources.

[redartbmud] 29/1/2020 15:56

PAS

Thanks for the comment.
I have filed my notes, takem at the AGM. When I get 5 minutes, I will look them out. I try to make a note of the questioner's name if I can. Despite requests, from the Chair, to state name when asking a question, not all comply.

[pubs advisory service] 29/1/2020 15:43

Thanks, it was a good question shows people are twigging this as a problem, i wonder if his answer convinced them?
As it stands well over a thousand pubs are let on separate leases or tenancies - one for each individual pub you rent, one Marston's tenant i spoke to had over 100 pubs all on different agreements and rents. I spoke with Mr Anderson he confirmed the costs situation so the CEO was not truthful re the nil cost of the cases, added to that Marston's own legal bill they had to fund all for arguing on a losing wicket.
You should note the PCA office is funded in part by Marstons and new levy funding policy which was published just yesterday means PubCo's will pay a greater share for every case filed - a sort of pro-rata fine if you like, i.e the more complaints the more you pay. The Anderson award shows every single Marstons tenant can now file a complaint with the PCA on same issue and win every single time.

[redartbmud] 29/1/2020 15:26

PAS

Sorry. Can't send a link. It was verbal, in answer to a direct question from the floor.
Hmmmm.... fail to understand how 1 pub (or 2?) has a unique contract.

[pubs advisory service] 29/1/2020 15:19

Thank you, can you send a link to his/this statement please - by the way Mr Anderson has 2 Marston's pubs so the CEO misled you on that point and as directed for pub companies losing statutory arbitration s Marstons will have to have paid Mr Anderson s costs so that is twice you were misled, i would be very worried.

[pubs advisory service] 29/1/2020 14:47

failure to account for actual contents in a 72 pint barrel would inflate assessed revenue by £10k in this average 200BB pub hxxps://www.72pints.co.uk/200-brewers-barrels-example

[redartbmud] 29/1/2020 14:32

Froth in the glass, A bit like the 72 pint barrel that is really 68 pints.

[essentialinvestor] 29/1/2020 14:26

Everything has a price I suppose, back on a watchlist but
really surprised it somehow reached near 1.30 pence a share.

[redartbmud] 29/1/2020 14:22

They will not be able to hold the pledge to freeze dividends, for the remaining 3 years, unless they sell more assets, but that may impact on the debt reduction plan that they agreed, at the insistence of major shareholders, as asset sales are being made to pay down debt.

[chinese investor] 29/1/2020 14:13

I'm Watching & Waiting !

[cc2014] 29/1/2020 14:11

If it gets to 90p I'll have pressed the buy button before then... Expect it's just broker downgrade to let their mates in.

[knowing] 29/1/2020 13:55

HSBC 29/01
Downgrades
Hold
Reduce
90.00p

[cc2014] 29/1/2020 13:50

Back to 105p at a speed that surprises me. I expect support will kick in somewhere, maybe around the psychological 100p. I'm not yet dithering over the buy button but the share price has fallen enough to make me take a closer look.

[skinny] 27/1/2020 14:09

.

Approve the Directors' Remuneration Policy 89,792,873 86.05%

[crossing_the_rubicon] 27/1/2020 11:55

Similar position Luderitz.
Watching and wondering.

[spacecake] 27/1/2020 07:17

Tales from the dark side... any reports, stories and revelations from the AGM knees up ?

[luderitz] 25/1/2020 00:56

I used to like what Marston pubs had to offer but recently not so and have not owned any shares for a few years now.

As said on here people’s eating habits have changed somewhat so staying out and on the fence until further notice with these.

A takeover? Who knows but good luck to any holders who gain from one.

[redartbmud] 24/1/2020 18:59

Food led pubcos are competing against the takeaway market, as well as the pizza parlours and the like. They offer a very similar price range. All of them, including rival pub chains are regularly giving significant discounts 25/30/40/50% discount deals to attract punters, who are not crossing the threshold as regularly as they were several months ago.

[loganair] 24/1/2020 18:44

Investors have not taken kindly to the trading statement and appear to have priced in a 2020 loss. Although revenues have been growing each year, costs have been eating more and more of them away. Management thinks that the market will grow in 2020, as consumers are enjoying low unemployment and wage growth.

But it is costs, not revenues that have been the problem. Debt reduction will help bring financing costs down, but there does not seem to be a dedicated plan to reduce operational costs. Perhaps selling high-cost pubs and buying fewer, but more profitable, new ones will kill two birds with one stone.

If 2020 has fair weather, revenues will get a further boost (there is a good correlation between sun and income) but on balance 2020 looks to be more rain then shine for Marston’s.

The dividend yield is around 7% at the moment but there is an appreciable risk of seeing that fall in the future. Investors will run for the exits if dividends are cut.

If management can get a hold on costs, reduce debt, the economy holds up, and the sun shines, then this stock could do well. That’s a lot of “ifs”.

[loganair] 24/1/2020 18:38

Analyst Mark Brumby at Langton Capital said pub prices were likely to have to rise, with the gross impact of the new minimum wage to be doubled in the next full year, though the company will have longer to mitigate the impact.

He said the best estimates at this stage would be that "by taking a little price, tighter labour scheduling and efficiencies, MARS may be able to mitigate up to a half of the gross impact in FY21. But it’s not as though the company hasn’t been doing much of this already and, as cost savings etc are finite, it is likely that price rises could feature more prominently than they have in the recent past.

"Here MARS will need to be measured and cautious. It will not be alone. For some operators, for example the casual diners, this may be a very serious problem."

Broker Peel Hunt said it was cutting its forecasts for adjusted profit before tax by an average of 4% to reflect the wage hikes and additional disposal activity.

"This combined with faster debt reduction still equates to 28% equity value creation (down from 32%) over the next two years, including dividends."

[redartbmud] 24/1/2020 18:37

MRF

Thank goodness for a rational comment - £1.6bn of debt!!
They are trying to pay down £200m over 4 years.
They can't afford to build any new pubs. The institutions have their balls in a vice and squeezing them hard.
The pubs aren't valued on the bricks and mortar, instead they are valued on a factor of EBITDA!!
Back in the day, an asset was valued at the lower of cost or net realisable value.
If you look at the recent disposals, they incurred a significant capital write off, because the EBIDA was significantly higher than resale value, even as a going concern.
Apply a similar factor to the rest of the estate and yoy are in the deep doodoo.
They expect to spend £80m capex in 2020 and that is just on existing outlets, and no additions. How much of that is revenue expense that is capitalised?

Build a new pub for say £2m. As soon as it commences trading, revalue it to £4m. After 5 years, you have to spend £1m to refurbish it, so that it stays fresh for the punters. Look at the number of new pubs they have built in the last several years that are now requiring major refurb spends. Work out the cost.

They aren't likely to cover the full dividend, out of free cash flow, in the next 5 years. They are only going to pay down debt by selling assets.

PS. They have reassessed the executive remuneration plan for the next 3 years. Apparently it is done every 3 years.
When questioned, they had to admit that the new targets are softer than current ones and that they would have received greater remuneration, over the last 3 years, had that policy been in operation. "It is important to properly incentivise and reward directors for their efforts".

[davr0s] 24/1/2020 18:01

MARS goes through the same nonsense every time it reports. Price falls, lots of people post bearish posts/ and why they sold out a few days ago and then it grinds back higher. Uptrend still intact for my style so I keep holding

[my retirement fund] 24/1/2020 18:00

1.6bln of debt and coming out to say what a shocker the minimum wage increases has been. Jeez that increase is something they've known full well about for a couple years now. I'm mean REALLY !! The story I've read seems quite stinky