Marston's Share Discussion Threads

[cokehookerscars] 22/3/2020 12:26

This has been an interesting debate, cheers Chaps.

[diku] 22/3/2020 11:43

Best not to buy the car!...

[wigwammer] 22/3/2020 11:11

Fenner - thanks again for conceding that Marstons will be receiving substantial cash inflows, contrary to what you previously suggested. Your example of a car stored in a garage losing value is not one that helps your point. Tell me, will the car lose more value if it is stored in the garage or if it is being used? You of course will claim it doesn't matter from an accounting pov.. but it does. The car that is being used will require more cash to maintain it - and anyone with an ounce of common sense knows it. Hope I've made that simple enough for you :)

[john09] 22/3/2020 10:58

I think it’ll be 50p very quickly

[fenners66] 22/3/2020 10:55

>Wigwammer

"depreciation rate applied to MARS d/t assets in the accounts are based on the prospect that they ARE being used."

Wrong. Its accounting principals that determine depreciation.

I thought you said you understand accounting ?

[fenners66] 22/3/2020 10:52

redartbmud - can you add some more simplistic terms? I fear not all readers on here will understand.......

Wigwammer, if you do understand accounting .... then you will understand that it does not matter the assets have been mothballed , they are depreciating and the balance sheet is going to be hit.

NAV fixed assets declines and the (presumed) accumulated losses increase.
The debt borrowed to finance the loans increases

And your altruistic bond holders will understand...... that they have the whip hand .

[careful] 22/3/2020 10:52

...but Marstons are also a brewery who's produce is currently in high demand.

[redartbmud] 22/3/2020 10:27

I was searching for comment on the pubs recently sold, but failed, so it may have been verbal from Ralph 'the Magnificent' at the AGM.
They were sold at a loss to balance sheet NAV, because the asset valuation was based individually on the EBITDA for each pub (- not on bricks and mortar).
Most of the £1.4 billion of loans are securitised on tha assets.
Should it be necessary to revalue those assets the current EBITDA is 0 and when they finally reopen, if they finally reopen, it may take a while to recover to previous usage levels. That assumes they can be supplied with all of the alcohol and foodstuffs necessary to meet demand.
The ongoing valuation calculations will be interesting, to say the least, and the implications have certain ramifications.

[careful] 22/3/2020 10:23

Marstons is an interesting case and tempting risk punt.

It is a great long standing company well run.
many will have an eye on this.

it will suffer, but if it survives this will be a great opportunity.

[john09] 22/3/2020 10:06

This board has never been busier. Why? Because it wont be 30p for long...

[123trev] 22/3/2020 09:51

Lol,I’m far from emotional just educated enough and rational enough to understand long held research and it’s implications.Please name just five major events that passed without material impact! Every major event has consequences that are long lasting and are only solved by the printing of even more money.Enjoy your Sunday too.

[wigwammer] 22/3/2020 09:34

123 - you're getting rather emotional. Please don't. For every event that you describe as having a longer than expected effect, there will be five where the event in question passed without material long term impact. Which is precisely why behavioural finance research repeatedly consolidates the same simple investment advice - buy when others are fearful, sell when they are greedy. Easier to do in theory than in practice. Enjoy your Sunday :)

[wigwammer] 22/3/2020 09:24

Fenner: "You buy a new ordinary car and put it in your garage. Come to sell it years later and despite not using it - its value has fallen."... but the depreciation rate applied to MARS d/t assets in the accounts are based on the prospect that they ARE being used. The reality is - as any lender with an ounce of sense can see - they are not. ATB :)

[123trev] 22/3/2020 09:15

Wigwammer that has got to be one of the most stupid posts I have read recently.Most shock events are all unprecedented that’s why there shocks but most are specific this is not. Let’s make this simple what did Bse do to beef sales and what did the horse meat scandal do to sales of ready meals burgers etc!

[wigwammer] 22/3/2020 09:13

Fenner - thanks for conceding that mars will be receiving substantial inflows, contrary to what you suggested previously. And trust me - I understand accounting. Do you understand common sense? An asset can depreciate in an accounting sense at whatever rate an accountant estimates, but the reality is - if it isn't being used then it isn't depreciating at the same rate. I trust that most lenders have the common sense to realise this. Genuinely, let's end this unpleasantness. Have a great Sunday :)

[diku] 22/3/2020 09:08

What chance some of the staff will even move over to other jobs if lucky never to return back...

[fenners66] 22/3/2020 09:05

In layman's terms rather than accounting....

You buy a new ordinary car and put it in your garage.
Come to sell it years later and despite not using it - its value has fallen.

[fenners66] 22/3/2020 09:03

"assets aren’t depreciating much when they aren’t being used"

Depreciation is a time cost - you clearly demonstrated there you do not know how accounting works.

[wigwammer] 22/3/2020 09:01

Thanks 123, if something is "unprecedented" then simple logic suggests that past events aren't going to tell you much. It is your opinion that CV will have a long lasting impact, but it is not a fact.

[wigwammer] 22/3/2020 08:53

"No cash flow to support"... is this one of your facts? My understanding is the government is providing them with property grants running into tens of millions, wage subsidies running potentially over £150m, the brewing op is likely to contribute tens of millions to cash flow, and so on. But according to fenner, none of these inflows really exist. As for worrying about accounting depreciation - it doesn't take a lot of nous on the part of a lender to work out the assets aren't depreciating much when they aren't being used. ATB :)

[123trev] 22/3/2020 08:53

Wigwammer this is not my opinion it is a fact in economics,psychology and social science that although events of magnitude are different the results are similar. Given that this is unprecedented then past research would imply this would be far worse.

[wigwammer] 22/3/2020 08:47

Fenners - your posts are heavy on rhetoric, and light on fact. Perhaps you are an emotional type of investor. Best of luck with your other investments :)

[fenners66] 22/3/2020 08:42

What that depreciation and interest uncovered by profit causes a loss taken to the balance sheet ?
Or that borrowings used to cover interest cost with no cash flow to support , adds debt to the balance sheet ?

Surely if you invest you know how a balance sheet works ?

[wigwammer] 22/3/2020 08:33

Is it a well known a fact? Or is it your opinion? Given this is an unprecedented event in modern history, there isn?t much evidence to know anything as fact. But it is a fact that I will raise a glass to those tackling CV in a pub at the earliest opportunity.

[wigwammer] 22/3/2020 08:33

Is it a well known a fact? Or is it your opinion? Given this is an unprecedented event in modern history, there isn't much evidence to know anything as fact. But it is a fact that I will raise a glass to those tackling CV in a pub at the earliest opportunity.