Marston's Share Discussion Threads

[pherrom] 25/3/2020 09:32

I bought these when they were Marston Thompson & Evershed (1970) @ 10/6d (52½p).
I'm hoping that they'll soon be back above that.

[john09] 25/3/2020 08:58

Yep. And marstons is a long way off from being a Marconi mate

[mister md] 25/3/2020 08:53

Just have a diversified portfolio of shares. Thats a good start.

[careful] 25/3/2020 08:48

Calmer heads must exploit the fear of others.
But sometimes panic is the correct course of action.

[smithie6] 25/3/2020 08:44

jeffian
some interesting points

I dont agree that ale is a declining sector in the medium term

in Europe as a whole it has grown from not-existing 5-10 years ago. People had heard of it before or every experienced the flavour.

in Spain for example some people are now drinking IPA as an occasional treat (since it much more expensive), & many micro breweries in Spain now make it & sell it !....& it is now appearring in supermarkets...

in eastern Europe one of the biggest selling canned beers is an IPA, whereas perhaps 5 years ago it perhaps didnt exist at all

(the new Hobgoblin IPA won the award for the best IPA in the world, whether the directors are able to turn that award into monthly profit, I dont know; but the market/demand for IPA is there & growing in Europe if not in the UK)

they, in Eastern Europe, also sell a LOT of weaker beers/shandies in summer, mixed with
- grapefruit
- lemon
- & other fruits

One of the biggest selling drinks in Spain in the summer is beer with lemon. On draught or in cans/bottles.

craft beer is a growth sector in the rest of Europe

while Im sure that lager dominates the market, as you said,....but there is a big market for other drinks/tastes.

Coca cola is one example. there used to be just 1 type. Now there are maybe 10 different types.
If you look at the product range of companies like Damn Estrella, San Miguel you will see more different tastes/drinks/beers. It is proof that providing different flavours is what is happening, imo

& the world doesnt just want to drink (cheap) lager (while it might be the biggest seller)

----

the size & growth & success of Wetherspoons over X decades also shows that there is solid massive demand for 'tasty' ales.

[john09] 25/3/2020 08:35

Good me too. I unfortunately paid 26p lol.

[archy147] 25/3/2020 08:34

Yes I did get some at 25p thank you John!

I see no reason to let go of these until they hit 100p either. :)

[john09] 25/3/2020 08:29

Yep its catching people out on the sidelines

[chinese investor] 25/3/2020 08:24

Looking Good !

[john09] 25/3/2020 08:17

35p great. Hope people bought some 25p during all that long winded debate lol

[archy147] 25/3/2020 05:42

MARS is presently trading at 50% below its previous lowest price ever (which was c60p after the financial cash bottomed out in 2008)

Can anyone see a share out there with greater growth potential over the next 6 months?

[jeffian] 24/3/2020 23:21

Smithie6,

I think you're guessing at what you would like/believe to be the case rather than what is. I used to be a Director of a regional brewer, albeit a long time ago, and, indeed, used to espouse the very points you make about the advantages of selling your own ale through your own pubs but the trends apparent back then have continued and I'm afraid worsened for traditional ale brewers.

For a start, most people don't drink ale, they drink lager. Marstons' own figures show that 70% of on-trade sales are lager. Ales are 23% and declining. Nobody can compete with the giants like Carling/Carlsberg on price.



None of the other stuff is relevant (product quality/delivery/price control) as the international brewers are desperate for outlets for supply and are more than happy to negotiate fixed contracts at huge discounts based on volume. This was the model used by the pubco's (Enterprise/Punch etc) whose ever-expanding estates gave them leverage to negotiate ever greater discounts.

Marstons beers are nowhere near achieving 'international' status and are unlikely ever to do so.

Keeping little breweries going in Ringwood, Barrow-in-Furness, Bedford etc etc may delight us ale-lovers but it is madness commercially. It looks as if they are doing it for the love of it/'tradition' but the obvious solution would be to focus on a (very) limited number of key brands (Pedigree etc), centralise the brewing process and create efficiencies of scale.

Archy147,
I don't dispute that MARS shares could be a reasonable recovery play at current prices but as everything is being trashed, I just think there are better opportunities. I would rather buy into companies with genuine growth opportunities than those that are just going to survive.

[archy147] 24/3/2020 21:21

careful24 Mar '20 - 13:41 - 3447 of 3458
Well yes jeffian, in a way I am.
this morning I bought some more MARS.
Either we think this corona virus is an over hyped panic that will blow away, or it is a potential mass killer changing all life as we know it.


+1 This is bang on and my position exactly. MARS is my big recovery play to (hopefully) recover the money I’ve lost in my SIPP over the last 3 weeks + hopefully come out on top afterwards. Also bought some MAB yesterday, which seemed the 2nd best bet.


jeffian24 Mar '20 - 16:53 - 3452 of 3458

This market shakeout is going to produce many bargains and great gains when they recover but in MARS' case, recover to what? To toddling along much as they did before, I suspect.



My thought: They may have been disappointing before but as a new investor, I’m more than happy for this to recover to a “toddling along” 107p, which is the price it was on 21Feb, the day before the CV panic first started to hit. To return there would still be a 250% upside from where we finished today.

[smithie6] 24/3/2020 21:05

well, 10% of co. brewed beer is exported

that's very impressive dont you think ?

[technowaxy] 24/3/2020 20:46

No. Bottled product is a small fraction of draft sales.

[smithie6] 24/3/2020 20:25

from annual results

"brewing businesses have both once again outperformed the market, building on an outstanding year last year. " ( the previous yr 2018 had the world cup & a good summer so in 2019 to keep up the same beer sales was good)

---

"Our brands are also demanded globally, with exports now accounting for around 10% of our own-brewed beer sales. We export 19 brands to 61 countries, including our six key markets of Russia, Canada, France, Italy, Germany and the USA"

Marstons ales have 14% of the UK market, ie. its a big player. So, to export 10% of the beer that it brews shows that the products are top quality & in demand in other countries.
Perhaps a Marston beer could become a global success like Budweiser or Guiness. Marston's sales are 25% of the premium ales off-sales market, so clearly the products are good (& have won various awards)
(also the chance that Guiness/Diageo/Budweiser/San Miguel might buy the co. to then roll out Marston beers globally much more quickly than Marstons could do it. (its the proven business model of companies like Diageo, Disney etc).

[smithie6] 24/3/2020 20:12

Jeffian
making beer & the capital investment

it depends imo

if customers are sitting in a pub you own drinking beer then it makes 100% sense imo to also be making the basic product that the clients are buying
....you can then control the quality/value of the venue & of the beer

if you own the pub but buy the beer from a 3rd party then you are exposed to big basic risks imo incl :-
- fluctuating quality of the beer, & loss of clients
- sudden jump in the price, that you dont control
- non-arrival of beer
etc


during the current crisis the breweries can still operate & sell beer via food shops. that is a benefit for the co.

the sales overseas of Marstons beers are growing nicely....

& beer sales have increased in food shops during the crisis, in every country

personally Im impressed by the different beers that the co. makes, I know/drink them :-)
-----

you dont like them operating a number of different breweries
I dont think it is very easy or logical to merge them....& some are local breweries imo
Hall in the Midlands, Ringwood to the west of Southampton
....if you moved production to a shiny factory somewhere you would then have higher transport costs & maybe clients would lose the historic/loyalty/trust/'local beer'/our beer feeling if the brewery was not local any more

----

some breweries/brands have done well & become international & are now worth a lot of money I think, San Miguel, Guiness, Newcastle Brown, Corona, Budweiser

you dont think any Marston product could achieve that ? (or the bod is not up to it ?)

....craft beer (ales etc) is a rapidly growing 'thing' in some European countries & gives opportunities imo for Marstons to increase sales abroad; & Marstons products are high quality & cheaper than the products made abroad (in Western Europe anyway)

in some countries a half pint of IPA is 3€ !

[careful] 24/3/2020 17:23

'toddling along' paying a 3% divi will be the new normal.
About time we cured ourself of unrealistic expectations wealth growth in a low interest/ inflation world.

[meijiman] 24/3/2020 17:10

There is no plan, there is no strategy. It's all about muddling along on big salaries forever.

[jeffian] 24/3/2020 16:53

Well MARS was one I was quite happy to hold too and I still have a chunk in my SIPP, mainly for income (Ha! Not now!) but I was becoming disillusioned that, even in the good times, management seemed unable get it moving forward. The other current MARS thread running is headed "Needs Shaking Up" and it does. There seems to be too much complacency in management and too little urgency to take decisive action. Before the coronavirus crisis, they could have taken much more positive action to reduce debt; they could have split the brewing and property businesses; they could have rationalised their brewing portfolio (HOW many breweries have they got now?!) but they haven't done any more than nibble at these issues, if address them at all. Personally, I do not like the obsession with brewing (and I say that as a confirmed ale-lover). They have continued to pile investment - via both acquisition and capital development - into brewing brands and equipment, an activity with low ROCE, low growth prospects and being squeezed between the big boys - whose efficiencies of scale they cannot hope to match - and the tiddlers who have tax advantages and are eating into their market.

This market shakeout is going to produce many bargains and great gains when they recover but in MARS' case, recover to what? To toddling along much as they did before, I suspect.

[smithie6] 24/3/2020 15:01

ah cool. thanks

Greggs, I like the co. (& their bacon roll offer !) but I also always thought the shares were a bit expensive for my taste...I'll take another look (even after its fall its not cheap !)

(I've picked up some MARS as my favourite recovery buy, logic being that for companies in the sector it looks to be the one showing the biggest % fall, & its the cheapest, & got tang. assetts, (& yes a lot of debt)

Im hoping for a quick bounce & then a slower recovery. ....going nicely today...

happen to have some DEMG from the past (medical stuff, I dont know that much about it) which is up a lot today, so today is going well for me)

Im hoping that MARS has now pegged in its low & its basically upwards from here. Time will tell.

(today & yesterday its been a steady queue of ppl buying the shares, a good sign imo)

[jeffian] 24/3/2020 14:36

Well I made the mistake of buying Aviva (AV.) a bit too soon but the current plan is to feed in over a period to a spread of Investment Trusts. Not normally my style but a way to get a good spread across the market. Individual companies on my wish-list include Greggs GRG and 4Imprint FOUR, basically things which I liked but thought too expensive before.