Marston's Share Discussion Threads

[janekane] 01/6/2022 14:20

Why explain please

[buywell3] 01/6/2022 08:41

Next week is set to be worse for shares like this

[janekane] 31/5/2022 18:50

What’s the debt figure now that’s the major problem with Mars it’s £2+billion

The cost of living will have a massive impact on pub trade and Mars with be a major loser as its leaseholders struggle with rents and full repair leases
The tenants will have an easier way out as most are on a 3 year agreement so they will struggle to the end of the agreement and then walk if they (Mars)don’t make the rents payable affordable
Leaseholders are stuck with foot irons lasting years and insolvency is the easiest way out
The future is looking very bleak for all pub companies with massive debt

[careful] 31/5/2022 08:25

This is bing hammered of late.
Recent update was o.k.

Momentum traders having fun I guess.
JDW similar.

[fenners66] 26/5/2022 10:43

Looked further down the notes and saw the CPI inflation expectation for the pension scheme was 2.6%
Granted that is probably over 20+ years but I guess the next valuation is going to be a challenge...

[fenners66] 26/5/2022 10:01

There's a mention of counter-party risk of trade receivables from, finance leases and pub tenants but no simple explanation of what /how it works.

[fenners66] 26/5/2022 09:57

Actually reading those notes , its as clear as mud.

[unastubbs] 26/5/2022 09:55

"avoid" in the times today - Emma Powell "Tempus"

[fenners66] 26/5/2022 09:54

Found it note 25

"The fixed rate of this interest rate swap at 2 October 2021 was 6.0% (2020: 6.0%)."

But also

"The weighted average interest rate of the fixed rate borrowings was 5.2% (2020: 5.1%) and the weighted average period for which the rate is fixed was 15 years (2020: 14 years)."

[fenners66] 26/5/2022 09:45

jerffian - so page 115 detailed £680m of securitised debt maturing between 2027 and 2035

£480m of which already reached its step up date, from which the rates became floating as LIBOR + 1.32% to 2.55%

However this was then switched to SONIA +

But then "All floating rate notes are economically hedged in full by the Group using interest rate swaps whereby all interest payments are swapped to fixed interest payable "

But they don't declare what the interest rates were fixed to by those hedges (least not on the same note).

My question also is how does the hedge work ? The collateral is with the original debt holder so what can they support the fixed rate hedge with , what is the risk ?

[buywell3] 26/5/2022 07:47

The other day MKS announced the closure of 32 stores




Pubs are likely imo to suffer the same fate as M&S --- still too many chasing the dime

[skinny] 26/5/2022 06:03

The webinar is now available :-

[ianood] 25/5/2022 22:39

Don't confuse a revolving credit which I agree will be quite a bit higher (based on base rates + etc) However, the IRS's are typically fixed rate, hedging the property assets and are for longer term. Admitedly these will also probably be higher when they fall due but they are often fixed for 7,10yrs, or maybe even longer. Really need to see a maturity profile rather than guesstimating

[jeffian] 25/5/2022 22:36

No, the interest rates were set years ago when the long-term securities were taken on. Nothing to do with "perceived high risk". In my days as a property developer/investor in the days of highest interest rates (in Norman Lamont's day I was paying £17% at one time - 15% Bank Rate plus 2% margin) we fixed our interest rates using SWAPS. If you had an investment yielding X% and you could fix your interest rate at 50%X, then you were more interested in securing your margin than taking the risk of gaining additional margin from falling interest rates. The effect of renewing the rolling loan will be marginal in the context of the total.

[whoru] 25/5/2022 21:44

ianood
I watched the online presentation today and that is where I got the debt figures that need renewed. I suggest the interest rate by middle of next year will be higher than the rolling debt one they have just now as the risk rate will have gone up never mind the real interest rates. If they had such high rates before it was due to perceived high risk which I suggest will be higher next year in the teeth of a recession.
You can off course assume it will be lower if it makes you happy, no skin of my nose.

[jeffian] 25/5/2022 19:53

The details of their debt arrangements are in the full published accounts -



- go to page 115.

[fenners66] 25/5/2022 19:41

I was hoping that detail of loans may have been in the interims , but alas no , and I didn't bother to find the last finals ....

[ianood] 25/5/2022 19:20

Thank you jeffian, agreed.

[jeffian] 25/5/2022 19:18

From memory, I think their blended rate is about 7%(?). Position slightly opaque as they've cashed out some of their hedges, but it'll be there or thereabouts.

[ianood] 25/5/2022 19:10

Suggest you reread Jeffian's post 6077. From memory several of their IRS's are at higher rates than present.

[whoru] 25/5/2022 15:44

When mortgages were at 8.75% house prices were so much lower. I bought a flat in Glasgow for £40k near that interest rate, think I had 10% fixed. That flat is now worth £130k. Higher interest rates means lower property values to get the same return on investment. Nobody will buy the freehold properties at MARS at current values when interest rates are higher.

[fenners66] 25/5/2022 15:14

oldfellowme2 - agreed its just that the sums borrowed are much larger now.

[oldfellowme2] 25/5/2022 14:57

But money is still relatively cheap i remember when people were scrambling to fix their mortgage rates at 8.75%

[whoru] 25/5/2022 13:04

Problem with buying assets is that cheap money will not be available as it has been for the last 20 years to buy them. May put a stop to people buying the freehold estate. Not a worry for me anymore now I have sold, I cannot see the prospects looking good for this, or any business that relies on discretionary spend, and the plan here is to increase prices to combat rising inflation that is putting less money in customers pockets.
I am doing a portfolio clean out.
Good luck if you remain.