Marston's Share Discussion Threads

[zcaprd7] 14/5/2010 08:47

Timbo, how about HMV?

[timbo003] 13/5/2010 22:52

diku

You are possibly correct about gold (although I'm not so sure), so where would you suggest investors should put their cash (other than Marstons and similar asset rich pub companies), assuming they are risk adverse (like me)

[diku] 13/5/2010 22:34

Gold is in bubble territory...

[timbo003] 13/5/2010 22:08

20% VAT coming up in all probability (possibly in graduated steps), oh joy! But I'm hanging on in here, where else could you put your money (other than gold or cash)?

[jeffian] 13/5/2010 16:55

"....and it needs no refinancing". Well, no MORE refinancing! It's less than a year since it diluted itself by around 50% at 59p/share which didn't exactly endear itself to shareholders and is probably the reason they have struggled to achieve a decent rating since. If they tried that trick again they'd get slaughtered. A quick glimpse at the graph above around June/July 2009 shows what happened to the share price

[wskill] 13/5/2010 15:16

With the World cup this year I am sure Marstons will benefit and it needs no refinancing.

[zcaprd7] 11/5/2010 14:03

What's pushing this up?

Enterprise Inns claims to have stemmed the decline in net income per pub, as it unveiled a £625m refinancing package this morning.

The company said that average net income per pub was £31,200 for the six months ended 31 March 2010, down from £32,200 over the same period in 2009. Despite the 3% decline, Enterprise said it marked an "improving trend" compared to last year's 8% decline.

Regional variations were also "significant", with average net income per pub down by 5% in the North, 3% in the Midlands and 1% in the South.

Enterprise generated £86m from the sale of 261 pubs in the period, which helped it to make a £91m pre-tax profit for the period, compared to £9m in 2009. It now plans to auction a further 30 pubs under its sale and leaseback programme during the second half of the year.

And it managed to reduce its debt pile by £163m to net debt of £3.4b, compared to almost £3.6b at the beginning of its financial year.

The company now has a total of 7,138 pubs, valued at £5.3bn - an average of £740,000 per pub.

Commenting on the results, chief executive Ted Tuppen said: "In the face of very challenging trading conditions across the pub sector, these are solid results which reflect the quality of our pub estate, the resilience of the leased and tenanted pub model and, above all, the skills and determination of our retail partners and the Enterprise team."

"We expect trading conditions to remain challenging during the second half of the year and we sincerely hope that the new Government will take steps to recognise and support community pubs and their vital role in British society," he added.

The company also released more details of its new lease agreements, announced in a trading statement earlier this year. It indicated that it would offer leases of 10 to 20 years, linked to the Retail Prices Index (RPI) of inflation, with no rent reviews.

All new agreements from July 2010 will offer a free-of-tie guest ale option for locally-sourced cask ales supplied by brewer members of the Society of Independent Brewers (SIBA) located within a 20-mile radius of the pub.

[zcaprd7] 05/5/2010 14:10

Pub group Wetherspoon (J.D.) (LON:JDW) said it was "slightly more cautious" about the outlook for the next financial year because of the combined effect of recent tax and duty increases, and higher interest charges, together with the risk of more subdued consumer expenditure. Reporting on its third quarter performance, JD said like-for-like sales had fallen by 0.8%, with total company sales increasing by 3.6%. So far this year, the group has opened 26 of a planned 45 new pubs and closed just two. Its shares were trading down by more than 8% at 499.50p.

[zcaprd7] 05/5/2010 14:09

I know everything is red but this has been bashed - are there Spoons figures around today?

[richardbroughton] 28/4/2010 17:26

Ian, you were right I looked the assets rather than net assets for PUB, the numbers are similar to MARS as you say, still too high a % of net assets IMO. reflects the asset boom I suppose! Now it all has to be paid for.

[diku] 28/4/2010 13:08

Last year it turned back after hitting 110p...this time so far 105p...wonder if it will have a crack at 110p again once markets have calmed down?...

[jeffian] 28/4/2010 12:02

You're joking joefromleeds, right?!

[joefromleeds] 28/4/2010 11:41

Anyone know what's pushing this sector down so much today?

[timbo003] 28/4/2010 07:50

Nice trading update from Green King today:



Could have a positive effect (I hold both MARS and GNK)

[diku] 27/4/2010 22:26

broker recommendation..

27-Apr-10 Marston's MARS Seymour Pierce Buy 103.50p - - Reiteration

[milacs] 27/4/2010 15:55

Holding up well today, expect to reach 120p in short order.

jeffian, bought a few NEX, could be the next T/O candidate. In which case I could finish up with that winner of yours, Stagecoach.

M

[jeffian] 27/4/2010 14:55

"cannot get a yield like this in many shares today"

Depends on what the yield is! Just to make sure you are aware that MARS is cutting.....oops, sorry, "rebasing"....its dividend following the recent Rights Issue. In 2008 it paid out 9.52p/share; following a cut in the 2009 Final, it paid a total of 7.14p/share that year; it has said that the 2010 Interim will also be cu...rebased and going forward it aims to have its future divis 2x covered by earnings. According to Yahoo, average of analysts' estimates for 2010 earnings is 11.2p which would mean a divi of 5.6p and 2011 earnings anticipated to be slightly less. OK, a yield of 5% is still pretty good but just wanted to make sure it was not the historic yield you were talking of.

[wskill] 27/4/2010 13:03

Looks like a breakout to me cannot get a yield like this in many shares today and we are still undervalued in my book next stop £1.40.

[jeffian] 23/4/2010 10:28

Hi, Richard,

As I said in 634, I take your point about asset valuations but in discussions on this issue (I had a long debate with Madgooner on the ETI thread a few years ago on the subject), I've always been less hung up on the value of the underlying asset than the ability of the company to service the interest and repay the debt over time through cashflow (a bit like we all pay off our domestic mortgages). Even 'negative equity' isn't the end of the world - as long as you keep making those payments! - and the one thing all these pubco's do, even in recent dire circumstances, is generate cash.

I fear you may be right in where we're heading with the economy but pray that interest rates don't spike as they did in the 80's/90's recessions. Despite the depth of the current recession, the one thing that has kept things on an even keel is low interest rates meaning that borrowers can service their debts. The pubco's have effectively hedged against this by securitising their debt over a long term at fixed rates of interest but plenty of others haven't and unaffordable interest = forced sales = tumbling asset values and that really would shake the pack of cards!

Regards, Ian

P.S. In your remark about intangibles, I don't think you've compared like with like. To get to 30% for MARS, you have to be comparing intangibles to NET assets whereas your 10% figure for PUB is by reference to GROSS assets. If you use the same basis for both, they work out about the same.

[hazelton] 23/4/2010 06:46

Tremendous comment all regarding debt & NAV.

Jeffian , the comment about debt not being a bad thing I agree with. As I see it it may be cheaper to finance through debt rather than equity. However its probably more risky as you have to pay it back. So its a question of judgment as to how much debt which must depend upon the borrowing terms.

I would be interested to hear from you all as to what is a useful level of debt in these sort of companies ?

[diku] 22/4/2010 23:36

McDonalds :)...

[jeffian] 22/4/2010 23:22

RB,

I'm not quite sure of the point you are making. I don't think I've promoted MARS as an asset-play, have I?

Co-incidentally, I happen to be a Chartered Surveyor with experience in the pub industry but would accept your general point that 'asset values' need to be taken in appropriate context. How often has one seen people advocating buying on the basis that the shares are "at X% discount to NAV" only to find that NAV is a miasma?

The rush towards high-rented leasehold High Street bars caused all sorts of problems (to me, a lease is a liability not an asset) but I feel very comfortable with the good old-fashioned freehold Community Pub. They are almost always underpinned by some sort of alternative use (usually residential; a village pub = 3 'plots' - the pub, the car park and the garden). I'm not yet completely convinced by MARS policy of building expensive new-builds on out-of-town retail parks etc. despite the apparently good initial returns. If the market changes, the alternative use is.......?

[electronica] 22/4/2010 21:08

Richard

Sorry about the loss on Aero Inventory - I got out early last year when the accounts became completely opaque. Lots of "profit" and major cash outflow just didn't add up.

As far as MARS goes ............... Standard & Poors have recently (last month) run a very thorough check on the pub assets & awarded MARS with a maintained (and excellent)rating for its property debt. There ain't a problem here & when the market increasingly starts to accept this (maybe after the Analysts Presentation with the Interims) we will see a continuation of the MARS re-rating.

My target is still 140p at the time of the pre-close IMS in Sep/Oct. This plus an Interim Divi of 3.5p (my current guess) gives an attractive looking 35-40% 6 month profit prospect.

[richardbroughton] 22/4/2010 20:06

Jeffian, you have to be very careful valuing assets, I have just lost a lot of money in a company called Aero Inventory whose assets..., weren't.! Auditors didn't pick it up nor did anyone else.