Marston's Share Discussion Threads

[redartbmud] 22/3/2012 19:45

millar

Have to declare an interest. I have a good sized holding in mars.

Understand your comments on new pubs, they fit the revised model based on how the public now use pubs. As a medium sized business with a lot of baggage to work through and little room for manouvre they are doing what they believe is best. Unfortunatley for them it is pretty much all of the eggs in the basket.
I just think that in the current climate it is going to take a very long time to re-position the business into the more profitable outlets. Meanwhile, they have to get tennants in existing properties onto the new style contracts. They are taking a lot longer than originally forecast.
Overall pubs are closing at a rate of knots every week. Not all of the sites are saleable - I see a lot of pubs that closed several years ago that have still not been sold.
Potential declining value of certain assets securitized could bite them on the bum.


Overall as dynamic as a snail, with management paid Formula 1 wages.

[rmillaree] 21/3/2012 09:33

Hello redartmud

They are currently investing quite a bit in the new pub formats, these new units are generation good returns on cash invested and will generate extra profits in addition to the modest lfl increases we may see this year (I don't quite agree that lfl growth is going to be nil for current year).

So debt will remain similar to previously levels but there will be be higher levels of profits from these new units and there will also be extra valuable assets on the balance sheet. This adds an extra safety margin to the business finances as there is greater interest cover all other things being equal - unfortunately interest costs will probably be rising a tad in the near future but this is a swings and roundabouts situation in that they may secure lower rates at a later date.The main thing at present is that the debt is mostly long dated and it is worth paying a bit more if they don't have the continual near term need to refinance the whole wad of debt every couple of years.

I see no reason for pub valuations to particularly drop now as things have been worse in the last 4 years than they are now. I think planning laws have been/are being made easier which may make it easier to sell any units that have more value as residential or other uses.

I can't argue with you on pay and i do agree that the debt is at a level where there are risks if they fail to deliver profits somewhere near current levels.
I have paid my money and will take my chance in that regard.

[redartbmud] 21/3/2012 08:51

Debt still in excess of £1 billion.
Reduced by £34 millions between the 2 years ending 2009 & 2011.
They don't generate enough revenue to pay off debt!

PS exec pay up on average over 60% per head in those 2 years from '09 to 11.
EPS & dividends down in double figures%.

A great performance - not!

Suggest you study the accounts.

Debt securitised on pubs, will they be devalued next time round as commercial type property still struggling.

[spacecake] 21/3/2012 08:42

The story here is not of growth, its a debt management / reduction story.
If they can manage the step up payments, make steady debt reductions then beat off the pub competition from the likes of Weatherspoons . Introduce new brewing technology that leads to manufacturing cost reductions, don't fall into a pensions black hole and if the board could pull their heads out of the feeding trough then things might get better !

[wskill] 19/3/2012 22:27

Still picking up a few on the dips myself too many excellent brands for the shares to be trading at this level below £1, a new addition to the board would not go amiss though with a bit more get up and go and clear out some of the old guard who seem to have little regard for share holders and only their ever increasing salarys and bonuses.

[bigbertie] 14/3/2012 11:59

These figures appear to suggest that underlying like managed sales are flat year on year. They were up 5% after 16 weeks, but only 3.5% ofter 23 weeks so in the last 7 weeks the like increase must have been close to zero. The increase before Xmas looks like an exception caused by low comparatives during the bad weather in 2010 (as the company admitted in the previous statement).

So my reading is that like growth is still eluding this company (and most of the pub industry I suspect). I'm out - I prefer companies with a long-term growth story. All this IMHO only - good luck to all holders!

[skinny] 14/3/2012 07:42

TRADING UPDATE

23 weeks to 10 March 2012

Our trading performance has remained resilient, reflecting the continuing appeal of value, service and quality in attractive pubs. After a good Christmas and New Year, market conditions have, as anticipated, been somewhat more subdued against stronger prior year comparatives which benefited in part from milder weather. Profitability continues to be in line with our expectations and we continue to make good progress in each of our trading divisions.

In our managed pubs, like-for-like sales for the 23 week period were 3.5% ahead of last year, including like-for-like food sales growth of 3.9% and like-for-like wet sales growth of 3.4%. Operating margin is in line with last year and our plan to build around 25 pub-restaurants in the current financial year remains on track.

In tenanted and franchised pubs, underlying profits continue to increase with profits estimated to be 3% ahead of last year. Our performance reflects the successful rollout of Retail Agreements in our franchise estate, now in around 400 pubs, and robust trading in the traditional tenanted estate.

Our own brewed beer volumes are up 2% versus last year. Our focus on localness and premium ale continues to drive growth, with premium cask ale up 2% and bottled ale up 10% in the period.

Net debt and cash flow are in line with our expectations.

Commenting, Ralph Findlay, Chief Executive Officer, said:

"We expect the consumer backdrop to remain weak in 2012, but with potential for better trading periods around Euro 2012 and the Queen's Diamond Jubilee. Our clearly defined strategy, underpinned by our continued focus on value, service and quality has ensured a resilient performance. We remain well positioned to make progress towards our key objectives of sustainable growth, improved return on capital and reduced leverage."

[shammytime] 13/3/2012 11:46

This looks tasty...

[skinny] 01/3/2012 15:40

More likely employee share save or similar?

[wskill] 01/3/2012 15:26

376 trades already today mostly for 200 or so shares no manipulation here then for an AT trade there must be a buyer and a seller the same person I would think just another account are there any large shorts running in MARS still I wonder trying to get out or to pick up some cheap stock ahead of the Trading Update.

[wskill] 29/2/2012 15:36

Due a trading update soon last year was 16/03/11 so around 2 weeks to wait then seems a lot of trades today nearly 10x the normal amount of the last few weeks a leaky ship them me thinks.

[redartbmud] 16/2/2012 09:05

I see Mars as a trading stock between low 80's and 100p for the foreseeable future. Nothing in the economy or company to change that.
There are other stocks that are more appropriate for trading than Mars however.

rmillaree makes some very valid points, the key to which is 4/5 years time, and there are better opportunities in the trade - green King springs to mind.

Not in the same position as Enterprise, whose rock & hard place is somewhere I would not want to be.

As far as I am concerned the jury is out. Time some of the non-execs were cleared out. The board needs to be slimmed down in that respect and fresh blood introduced.
Also beginning to think about Chairman - time for succession planning??? I like "the cut of his jib", but every dog has his day as they say

[fangorn2] 15/2/2012 11:47

Sub 100p is a good entry point. I'm looking to top up high 80's myself. Decent divi, a strategy that seems to be paying off (roll out of new pub restaurant family theme), a decent premium ale sales.

Certainly a fan of this company (as indeed I was of another pubco called Old English)

[dandu71] 15/2/2012 11:42

Been looking at this stock for some time as wanting to diversify my portfolio a little and hold more FTSE250 stocks, looking for an entry point sub £1.

[rmillaree] 15/2/2012 11:00

Hello redartbmud

As far as the debt is concerned in some respects they are between a rock and a hardplace at present.

They could have paid debt down and not launched the new megapubs format and they could have sold some sites to pay down debt (similar to the London deal a while back)
The problem is this would be seriously compromising the business viability going forward.Earnings would be under pressure and there would not be the same safety net that would exist with earnings £10 - £20 million higher.

In some respects although the interest rate is higher than what we would like on the debt - the main thing is that it is long term debt and they are not under massive pressure to refinance.
Hopefully in 4-5 years when the majority of expenditure has been laid out on the new megapubs the cash will start to flow in and the debt should start to drop at a decent lick.Factor this in with an eventual increase in site values if the property market improves/or based on site profitability at that time.
At that time once debt starts to fall then there will be a nice uplift in EPS without the company having to do anything.

So as far as i am concerned there is risk involved but generally speaking i agree with the current strategy as far as delivering long term reward for shareholders.

[redartbmud] 14/2/2012 21:35

Fact remains that they have reduced debt by £34 millions in 2 years since the rights issue in 2009.
It continues as the biggest agenda item and overwhelmes everything.

I want to see the company succeed as I have a decent stake in them.

[philanderer] 14/2/2012 20:37

Haven`t seen the HL note either but Numis reiterating their 'buy' and 130p target this morning.

[fangorn2] 14/2/2012 18:00

There's a bullish note from Hargreaves Lansdown today?

Don't seem to have got that, despite holding Mars in my HL Sipp. Do you have a link please?

[skinny] 14/2/2012 17:22

Also a fairly bullish note from Hargreaves Lansdown today and, for the moment, no longer a penny share!

[billy_liar] 27/1/2012 13:54

Time to get rid and employ a board that aren't lining their own pockets at shareholders expense.

[redartbmud] 27/1/2012 10:16

A few Key facts.

Net Debt 2009 £1099.3m 2011 £1065.3m Reduction £34m

Dividends 2009 7.1p 2011 5.8p Reduction 18.31%

EPS (Bef Exceptionals) 2009 13.4p 2011 11.2p Reduction 16.42%

Directors Emoluments 2019 - 2011

R Findlay Increase 54.04%
D Andrew Inc 50.1%
A Darby Inc 62.91%
S Oliver Inc 64.45%

D Thompson Inc 8.7%

Other Non-Exec each received an increase of over 10% in 2011, admittedly their first rise since 2009.

Any comments/observations?

[redartbmud] 27/1/2012 08:58

Fangorn

Thanks

Red

[fangorn2] 27/1/2012 08:55

Indeed, a great result. bar the rise in directors remuneration.Frankly fiven their less than optimistic outlook, "the company said it expects the tough trading conditions the industry endured in 2011 to continue in 2012" then sucha pay rise is not justified imv at the moment.