Marston's Share Discussion Threads

[trytotakeiteasy] 18/5/2017 11:22

Marston's should of had lower debt and been able to do this without issuing equity. They have pursued the wrong strategy by not seeking reduce the debt burden in my view.

[speedsgh] 18/5/2017 11:18

@timbo - AFAIAA Charles Wells' 200+ pub estate was not up for sale (I know someone who works for CW). I also believe that CW's 'leading brands' & others (distribution rights/brewed under licence) mentioned in the rns today which are being acquired by Marstons have been struggling for a while. AIMHO DYOR.

[dogwalker] 18/5/2017 09:21

That's the spirit (geddit?) Lord Gnome.

[skinny] 18/5/2017 09:04

Shore Capital Buy 140.90 - - Retains

Peel Hunt Add 140.90 160.00 160.00 Reiterates

[lord gnome] 18/5/2017 08:52

Good set of numbers and a good acquisition at a sensible price. The market will like this. The placing will hold back the share price until it is out of the way, but that is going to be temporary and today we have a genuine buying opportunity - so I have. Paid a tad under 1.41 because I prevaricated about it. Never mind, I can see these getting back above 150 in very short order.

[janekane] 18/5/2017 08:07

We could see a 15% drop off today's share price the marker never likes placing even when it's a good deal

[timbo003] 18/5/2017 07:42

We are just buying the brewing and beer business, not the pubs I see, I wonder if the pubs were for sale?

[skinny] 18/5/2017 07:38

Marston's PLC ("Marston's" or the "Company") today announces its intention to conduct a non-pre-emptive cash placing of approximately 57.6 million new ordinary shares in the Company to institutional investors (the "Placing"), which represents approximately 9.9% of the Company's issued share capital (excluding treasury shares). J.P. Morgan Securities PLC, which conducts its UK investment banking activities as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), and Numis Securities Limited ("Numis") are acting as joint bookrunners (the "Bookrunners").

The Company has also announced today that it has agreed to acquire the Charles Wells Brewing and Beer Business from the Charles Wells Group for a cash consideration of £55 million, plus working capital adjustments, representing 5.5x EBITDA post synergies. Based in Bedford, Charles Wells Brewing and Beer Business is an established high quality brewing business with a portfolio of more than 30 beers including leading brands such as Bombardier, Young's and McEwan's. In addition, the business has UK distribution rights for the Estrella Damm lager brand and other beers under license including Kirin and Erdinger (see separate announcement).

The Company also announced today the agreement to acquire seven pubs in strong locations to enhance its Destination and Premium estate for a consideration of £13m with a refurbishment investment of £3m, representing 7.8x post investment EBITDA.

Both of these acquisitions (the "Acquisitions") are expected to complete in June 2017.

The Acquisitions are expected to deliver a combined ROIC in excess of 15% in the first full year and to be EPS neutral in the first full year and accretive thereafter. Pro forma Net debt:EBITDA is expected to reduce by 0.3x post completion of the Acquisitions.

In addition, Marston's is today issuing its interim results covering the 26 weeks ended 1 April 2017 (see separate announcement).

Background to the placing - use of proceeds

The net proceeds from the Placing will be used to fund the consideration for the Acquisitions.

The Placing is not conditional upon completion of the Acquisitions. In the event that the Acquisitions do not complete, Marston's will retain the net proceeds of the Placing for potential investment opportunities and general corporate purposes.

The Placing

The Placing is subject to the terms and conditions set out in the Appendix. The Bookrunners will commence a bookbuilding process in respect of the Placing ("Bookbuild"). The book will open with immediate effect following this announcement.

The price per ordinary share at which the Placing Shares (defined below) are to be placed (the "Placing Price") will be decided at the close of the Bookbuild. The timing of the closing of the Bookbuild, the Placing Price and allocations are at the discretion of Marston's and the Bookrunners. When issued, the Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 7.375 pence each in the share capital of the Company, including the right to receive all dividends (including the interim dividend of 2.7p per share announced today) and other distributions declared, made or paid on or in respect of such shares after the date of issue of the Placing Shares.

Application will be made for the Placing Shares to be admitted to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the main market for listed securities of the London Stock Exchange (together, "Admission"). It is expected that Admission will take place at 8.00am on 22 May 2017 (or such later date as may be agreed between the Company and the Bookrunners). The Placing is conditional upon, inter alia, Admission becoming effective. The Placing is also conditional on the placing agreement between the Company and the Bookrunners not being terminated.

The Appendix to this announcement (which forms part of this announcement) sets out further information relating to the Bookbuild and the terms and conditions of the Placing.

[skinny] 18/5/2017 07:38

Marston's PLC ("Marston's" or "the Group") today announces that it has agreed to acquire the Charles Wells brewing business from the Charles Wells Group for a cash consideration of £55 million, plus working capital adjustments.

Based in Bedford, Charles Wells Brewing and Beer Business is an established high quality brewing business with a portfolio of more than 30 beers including leading brands such as Bombardier, Young's and McEwan's. In addition, the business has UK distribution rights for the Estrella Damm lager brand and other beers under license including Kirin and Erdinger. As part of this acquisition, we have entered into a long-term exclusive agreement to supply all beer, wine, spirits and minerals to the Charles Wells pub estate. The brewery site, which is freehold, employs around 300 people.

The Charles Wells Brewing and Beer Business acquisition complements the existing Marston's Beer Company strategy:

· Extends our number 1 position in the premium bottled ale and cask ale markets, and enhances our share of the premium canned market.
· Strengthens our presence in London and the South East and presents a platform to expand into Scotland.
· Develops our licensed brands business.
· Expands our production capabilities to include lager brewing and canning, whilst improving production and distribution efficiency.

Furthermore, there is a strong financial rationale for the Charles Wells Brewing and Beer Business acquisition:

· Enterprise value of £55 million equates to 9x current EBITDA before synergies.
· Transaction to be funded through equity placing as announced today (see separate announcement).
· Expected synergies of £4 million to be achieved by financial year 2019.
· ROIC expected to exceed 18% in third full year.



Rationale for the Charles Wells acquisition

Marston's Beer Company ("MBC") has deployed a consistent strategy over the last five years to become the UK's leading premium beer business. Today, MBC has an experienced senior team and holds leading market share in both the premium bottled and premium cask ale markets. MBC takes a local approach to its brewing capabilities via its portfolio of five regional breweries located throughout England and has recently extended its focus to licensed brands, including Shipyard, which is now the number 2 Craft Beer in the UK, as well as the Warsteiner, Kruzovice and Kingstone Press brands.

MBC has also successfully enhanced shareholder value through acquisitions, most recently through the £25 million purchase of the Thwaites beer business in 2015. Since acquisition the Thwaites beer brands have performed strongly, delivering synergies in line with expectations and returns well in excess of the Group average.

Charles Wells Brewing and Beer Business presents an excellent opportunity which is consistent with our strategy. With a brand portfolio which will not only increase our ale market share from 11% to 16%, this acquisition will also strengthen our representation in London and the South East, and present an opportunity through the McEwan's brand to expand into Scotland. Charles Wells Brewing and Beer Business also brings with it significant expertise in licensed brands most notably its portfolio includes the growing Estrella Damm lager brand which represents a significant opportunity. From a supply chain perspective, Charles Wells offers lager brewing and canning capacity of scale, activities which are not currently undertaken by Marston's. In addition, the acquisition presents opportunities to further improve efficiencies in brewing, packaging and logistics.

Charles Wells Brewing and Beer Business financial profile

For the financial year ended 30 September 2016, Charles Wells Brewing and Beer Business generated revenues of £92 million, EBITDA of £6 million, operating EBIT of £5 million on a 52 week basis and net tangible assets of £36 million. Marston's estimates it can generate operational improvements similar to those achieved in previous acquisitions and has identified potential costs savings of £4 million by financial year 2019, with the majority being realised in financial year 2018.

Transaction details and timing

Marston's intends to finance the acquisition from the proceeds of an equity placing announced today, which represents 9.9% of Marston's issued share capital.

Completion of the acquisition is expected in June 2017, following completion of the appropriate consultation procedures.

more.....

[skinny] 18/5/2017 07:38

· Revenue and earnings growth despite late Easter

- Revenue and earnings growth despite Easter falling later this year in second half
§ Easter impact on profit before tax estimated at £1.5 million
- Statutory profit before tax up 61% reflecting positive movement in valuation of swaps
- Leverage maintained at 5.0x, fixed charge cover improved to 2.6x

· Improving quality of pub estate
- Average profit per pub up 3% in first half year
- Four pubs and bars opened
- Three lodges opened, taking estate to over 1,000 rooms

· Market-leading beer business continues to demonstrate growth
- Strong brand portfolio continues to outperform market
- Further market share growth, with 26% share of premium bottled ale and 19% share of premium cask ale

· Interim dividend up 3.8% to 2.7p per share


· Acquisition of Charles Wells Brewing and Beer Business for £55 million (see separate
announcement)
- Transaction to be funded from the proceeds of an equity placing to raise 9.9% of issued
share capital announced today (see separate announcement)

· Current trading (for 30 weeks incorporating Easter) remains encouraging

- Destination and Premium like-for-like sales up 1.6%; operating margins in line with last year
- Taverns like-for-like sales up 1.7%; Leased like-for-like profits up 2%
- Own-brewed beer volumes up 2%
- On track to open 23 pubs and bars and 8 lodges in current financial year
- Acquisition of three Pointing Dog Premium pubs in May and agreement to purchase seven Destination and Premium pubs

Commenting, Ralph Findlay, CEO said:


"Marston's has been transformed over the last 10 years by the consistent implementation of our established strategy. In that time, we have built around 200 pubs on new sites representing 60% of the Destination estate today, and we have developed a leading premium pubs and bars business. The Taverns estate has been repositioned, having sold around 1,000 pubs and introduced pioneering franchise-style agreements designed for community pubs. In Brewing, we lead the premium ale market and benefit from a growing contribution from craft beers and international licensed brands, including premium European lager brands.

"Our market position will be enhanced by the acquisition of Charles Wells Brewing and Beer Business and we remain confident our strategy will continue to create value for shareholders."

[speedsgh] 09/5/2017 09:25

Peel Hunt downgrades strong Marston’s -

Peel Hunt has downgraded pub retailer Marston’s (MARS) on the back of recent strength in the share price.

Analyst Douglas Jack downgraded his recommendation from ‘buy’ to ‘add’ and increased the target price from 150p to 160p. The shares rose 2.5p, or 1.8%, to 145.4p ahead of interim results.

Jack is expecting profit before tax to be up 1% to £33.5 million and over the longer term for margins to benefit from ‘a shift in the sale mix’.

‘We expect forecasts to be held on 18 May, with accommodation expansion providing upgrade risk to our 2019 estimated forecasts, which are 2% above consensus,’ he said.

‘We believe Marston’s offers a relatively low risk model with a secure dividend – yielding c.5% - which should act as a support for the share price.’

[spacecake] 07/5/2017 18:45

Around 10 days to the next results, will we see some better trading numbers and make a start on reducing the eye watering debt ?

[lord gnome] 13/4/2017 15:48

Still here and still happy holding. I had made up my mind to add a few more on the next dipette to 132 - cue a rise to 140. I'm actually now in profit on these for the first time since I bought back.

[jeffian] 13/4/2017 15:29

Not sure which bit to learn from; the fact that they're always full or the fact that you've given up going!

;-)

[martinc] 13/4/2017 12:34

We have given up going to our local Marstons new build pub. It's always full with a 40 minute wait for tables. So on that anecdotal basis I'm happy to carry on holding.

[poleaxe] 13/4/2017 12:32

Anyone out there, if so,why the rise,any ideas.

[defcon3] 14/3/2017 14:30

Had to take some more today in 131's. Tucked away for the LT portfolio

[skinny] 08/3/2017 12:11

Lord Gnome - it hardly sets your pulse racing, but I'm happy to carry on holding.

Bought at 93p sold some at 164p.

[olliemagern] 08/3/2017 10:59

Time to buy? my advice would be to wait for the half year results first.
Remember last years normal eps of 12.7p does not include the £40m cash flow hedge loss, so real eps were around 6p last year.
If half year cash flow hedge loss is ~£20m they are on target for real eps of 6p this year therefore sell.
If half year cash flow hedge loss is near zero they are on target for real eps 13p then buy.

[lord gnome] 07/3/2017 17:36

Two votes of support then, Skinny. Hopefully someone will take notice and give the share price a lift.

[skinny] 07/3/2017 16:12

Berenberg Buy 134.05 - 170.00 Initiates/Starts

[skinny] 07/3/2017 08:48

Peel Hunt Buy 135.20 - 150.00 Initiates/Starts

[jeffian] 01/3/2017 16:08

Kind words, but what do I know? If I'd been that prescient, I'd have unloaded all my ETI at £8 and been writing this from my yacht in the Bahamas!

[exel] 01/3/2017 13:34

Thank you, jeffian, for your very good points on gearing, and our long-running MARS - GNK comparison. Also, coming from yourself, an acknowledgement of my earlier posts on MARS means a lot. Thank you! ex