Share Name Share Symbol Market Type Share ISIN Share Description
Marston's Plc LSE:MARS London Ordinary Share GB00B1JQDM80 ORD 7.375P
  Price Change % Change Share Price Shares Traded Last Trade
  2.10 5.37% 41.22 5,484,809 16:35:05
Bid Price Offer Price High Price Low Price Open Price
41.58 41.88 43.00 36.84 39.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Travel & Leisure 1,173.50 -20.00 -2.80 261
Last Trade Time Trade Type Trade Size Trade Price Currency
17:16:56 O 8,218 41.222 GBX

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Date Time Title Posts
22/9/202021:49Marstons...time to buy???5,282
22/9/202013:20MARSTONS 2020 432
18/8/202013:54Marstons - Needs Shaking Up !1,777
21/7/201811:24Is there Life on MARS?91

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Marston's Daily Update: Marston's Plc is listed in the Travel & Leisure sector of the London Stock Exchange with ticker MARS. The last closing price for Marston's was 39.12p.
Marston's Plc has a 4 week average price of 36.84p and a 12 week average price of 36.04p.
The 1 year high share price is 133.80p while the 1 year low share price is currently 18.40p.
There are currently 633,991,930 shares in issue and the average daily traded volume is 4,331,409 shares. The market capitalisation of Marston's Plc is £261,331,473.55.
prefinvestor: The idea that you can put a few numbers into a spreadsheet and come up with a totally accurate figure for what a company’s share price should be on a day to day basis is clearly nonsense, that has never been my objective. However I DO believe that it should be possible to use the company’s fundamentals to construct an estimate of what level of share price is 'justified', to an accuracy of perhaps 10-15p in the case of MARS. Such a figure should be devoid of market sentiment which could well be a significant contributing factor to where the actual share price is trading ATM. Having looked through the accounts IMV it is clear that MARS is (and has been) earning very little from its operations, it has been barely profitable - even in normal times. All of the value in the business therefore seems to me to be in the property, plant and equipment. My approach to this problem has therefore been based on estimating the NAV per share of the company (assets – liabilities divided by no of shares) and assuming that this will provide a reasonable approximation to what the MARS share price might eventually be. My model includes no contribution to the estimate from earnings - due to its lack of them. This approach at least has the advantage that it produces a valuation based on the whole enterprise’s assets and liabilities (including the debts) and not just a part of them (as is the case with the £580M for the brewing business equates to 88p a share type approach). Obviously the NAV per share can be radically different to actual market share price and market sentiment can and will play a huge part in determining that. My motivation for doing this analysis has been quite simple, if the company is really worth 100p+ then given where it sits today it would be worth investing. If its really only worth 50-60p then it isnt. I have long since decided that I am not interested. I fully accept that my analysis could easily be wrong and may have produced an inaccurate estimate. Readers should not trust in my figures being accurate and should do their own research and make their own decisions. Everyone is entitled to their own opinion though. That’s what share discussion boards like this are all about isnt it ?, well I think it is. Good luck to all holders. I shall not be joining you.
prefinvestor: Well @knockknock as I explained in one of my earlier posts here I dont short as I am purely a "buy and hold" type investor. Regarding your comment on company profitability all I can say is if you build your castle on poor foundations you shouldnt be surprised when the inevitable happens. If a company that you invest in doesnt make a profit then come results time its share price will surely suffer. MARS share price dropped to ~30p because the market took a poor view of its prospects in the current virus impacted environment IMHO. The JV was a clever ploy to both change the game and secure some cash for Marstons to pay off some of its debt, but it hasnt changed the overall picture IMV. Hence the share price is falling once again. Thats how I see things anyway, could be wrong as always. I have no holdings in MARS of any kind (long or short) as I decided from the start based on my initial analysis that this was not for me.
jeffian: Bayliner75, "Do we know why Marstons area not really getting passed this 55p level." Some time ago, I posted this on the other MARS thread (it got a 'thumbs down'!) "jeffian - 24 Jun 2020 - 10:33:30 - 4656 of 4784Marstons...time to buy??? - MARS ............. I fear bulls are putting much too much faith in the re-opening of pubs to drive the share price up in the short term. Firstly, it's a known fact so it's already in the price but, more importantly, having the pubs open is one thing but having them open profitably is something else entirely. Social distancing, ordering by app, plastic booths, no cash payments, table service only...... it doesn't sound like the pub experience most of us know and love. Of course some of us will still go (I can' wait!) but if they're operating at, say, 50% capacity then the odds are MARS will be loss-making. My take, FWIW, is that the Carlsberg deal underpins the price at this level but I can't see it going significantly higher until the pubs are largely free of Covid restrictions."
prefinvestor: Hi Sif12, Sorry you can’t see my posts over on ii, TBH it’s a bit of a pain to repost it all here which is why I didn’t do it. I did test the link and of course it worked for me as I have an ii account and am logged in most of the time. I don’t know where you are getting your numbers from that you quoted, I used the 2019 accounts as my primary source. You can download that from Marston’s web site. If you look on page 85 it shows that they made a loss of £94m in 2019 and a £74.4m profit in 2018, both very small amounts for a company with ~£2Bn capital employed. To me that said that the company was making very little from all its operating activities and that most of its value was in its property estate (offset with lots of debt). Carlsberg I don’t think is much better as they made a loss in 2017 - haven’t been able to locate figures for later years. But if no better then JV will be no better in income terms than Marston’s. My analysis then took the total shareholder equity from group balance sheet on page 87 £811.1 took off the change in assets due to the JV £31m and divided it by the total number of shares. This gives a figure of close to 120p as the estimated share price BUT that is with the property included at 100% estimated valuation. That’s not realistic in my view and if you reduce it to 83% then the share price estimate reduces to less than 60p. Add to that the current COVID-19 woes and from my perspective the situation doesn’t look good at all.... That’s how I see it anyway, which is why I’m not interested. Could be wrong as always and DYOR etc. You are completely entitled to have a different view but I would urge you to use the figures in the accounts in any analysis that you do as I don’t immediately recognise the figures that you quoted. I have no doubt that this will very probably trade much higher especially when pubs are re-opened. But in my view the current price is pretty close to a fair valuation. ATB Pref
sif12: Summary: •What it does- Pubs and Brewery business, over 1400 locations 93% Freehold •JV deal- Deal with Carlsberg, gives Marston’s £273m cash, 40% stake and values ONLY Brewery business at £580m or 88 pence a share (still have all of 1400 pubs own 100%) •Potential financials and why undervalued currently- Projections 2021 Free cashflow of over £150m. PCF 10 gives Mcap of £1bn or 150 pence. Resumptions of dividends in 2022 potentially 10 pence or over 15% current yield Please read below for full details What it does: Marstons operates a chain of pubs/ taverns and a brewery business. You can drink, eat, stay at one of the over 1400 locations they have all over the country. Joint Venture with Carlsberg- a game changer says Peel Hunt: Marston signed a Joint venture agreement with Carlsberg announced on the 22nd of May. The deal means part of the brewing business, 60%, was effectively sold in a JV with Carlsberg, giving Marston’s £273m in cash and a 40% stake in the joint venture and valuing ONLY the brewing business at £580m or about 88p a share. Remember they have and keep all the actual operations- over 1400 pubs, taverns in addition to the Brewery business. This deal gives them access to Carlsberg’s massive network and an opportunity to introduce new beers and the increase reach of existing ones ie big uplift in Revenues. Aside from a game changing deal, Peel Hunt said as much and have a 95 pence target (but I think this may be low as below), it means they have a much more secure base with £273m in the bank to weather any ongoing COVID challenges this year. There’s also the opportunity for synergy ie cost reduction. Financials: In 2019, Revenue of £1174m, Operating profit of £179m. Financials will show Net Profit of a loss of £18m, but this is down to non-cash adjustments, which don’t impact cash generation/ debt hence why they were able to pay a healthy dividend of 7.5 pence. 2020 is obviously going to be impacted by COVID, however the advantage of the very unfortunate current circumstances for most businesses is that it has forced them to look at operations and efficiency. Marston’s as per guidance on the 18th March has reduced capital expenditure by £80m, that’s massive. They should still be marginally profitable and have seen a massive increase in sales of their brands in shops. They also have the JV £273m to reduce debt, plus another £30m of disposals to complete. They’ve also agreed covenant waivers/ terms with banks and holders of notes. In 2021 on the basis that there is a return to normal business by then, more than other type of business I think as long as lockdowns aren’t around, the weather is good and we aren’t in a deep recession Martson’s will do numbers similar to 2019 (for the record 2019 numbers should have been better if not for pretty wet weather). So on the basis they lose 60% of the operating profit on the brewery (and not actually adding in any uplift in profits there from higher revenue and reduced costs, both of which are highly likely), if everything else stayed as-is we would be looking at 2021 Operating Profit = £155m (based on 2019, adjusted for reduction to brewery share) But considering the ongoing £80m capital expenditure reduction we have 2021 Operating Profit = £230m (based on 2019, adjusted for Brewery and cap ex reduction) Interest costs are consistently £80m (which should actually drop based on the £273m) (I have NOT included non cash adjustment- these are not actual costs. and amount to £120m in 2019, and £<50m in 2018. in 2019 £70m of one off and the ongoing adjustment is impairment of freehold/leasehold assets). We therefore have a free cashflow of £>150m On a very fair forward PE of 7 that’s a Mcap of >£1bn or share price of 150 pence On an EBITDA basis we would add back the interest and remove the freehold impairment. EBITDA= £180m. The JV was on 13 multiple this would give us £2.3Bn MCap!! If you want to use the ongoing likely non cash adjustment of £50m. We have Profit before tax of £100m. On a 7 x multiple thats £700m or an share price of £1+ This doesnt take into account any of upside of the Carlsberg deal either… The above is all based on resumptions of normal trade next year. It seems certain now (save for a sudden rise in COVID cases all over the UK) that pubs will be allowed to reopen in July- with outdoor spaces to begin with. Based on the above I believe £1 is fair value now with a target of 130 pence once pubs are fully open which should happen end Q3/ beginning Q4. Dividends should also return by 2021/2, and based on over 7 pence for the last few years and the higher earnings potential for 2020 could be 10 pence paid in 2022 or over 15% yield on current share price Please DYOR
cokehookerscars: Think that's given it a shake up ! Need a new thread title now. Essentially, MARS lose £580m of 'brewing assets' but gain - UP TO - £273m cash and 40% of a £780m new company. Make an estimated £24m in annual savings (no doubt at CAMRA's disgust) and of course we all know that creating this new company and adapting working practices at Mars & Carlsberg around it will cost money. Exciting times. The quality of the beer had better not suffer. Great news for the MARS share price today, not much movement on the Carlsberg front. Expect volatility.
john09: Some elements of hospitality to open from July. Little pic of a beer garden on sky news as they broke the news Fantastic for MARS share price you watch
fenners66: Wrong I have never suggested anyone buys / sells / holds or does whatever with the stock. On the 22nd you were suggesting that Marstons did not have to provide depreciation on assets as they were not in use. You needed to have the accounting concept explaining to you. Depreciation is governed by accounting rules not use. You also said that MARS is vital to the economy and would never be allowed to fail , prioritised before spending on public services , unless pubs are shut down for 3 years..... Thereafter you bought and I congratulated you on a paper profit asking you if you had sold and thus crystallised it. After that when the share price was 44 there was a discussion about debt. Debt kills shareholders or companies or both. If the Marstons underlying business is good enough - and the lock down long enough it may do for the shareholders as the debt holders take it. The debt was then and is now still a large risk. It has not gone away and since its likely pubs will be one of the last commercial businesses to reopen the debt will be a bigger problem before they do. Nothing in that respect has changed. However the share price has since fallen. One interpretation of that could be - everyone has taken profits or the market sentiment has changed and the speculation of longer shutdown and risks on debt have come to the fore. Take your pick. You actually said "I was fortunate enough to buy mars near the lows, and have taken out half of what I purchased in the mid 40’s. I understand there are risks" That could be interpreted as you bought some at the lows and some in the mid 40's You are clarified that you sold half of your position in the mid 40's hence you are presumably left with a much smaller profit on the other half.
smithie6: MARS ref. the Evening Standard article I think there is logic in Marstons being a takeover target, to get hold of its tang. assets. & assuming an acquirer can refinance the debt, or reduce it using their own cash, the interest cost could crash & the profit would jump (assuming we return to normal business some time in the future) The co. pays about 100-120M in interest, wipe that out & the EBITDA is/was about £200M ! +/- rough numbers.....not so far below the share cap. value of £277M at a share price of 42p !. (the share price is highly geared wrt the tangible assets & debt, which some of us knew & it's why we're here now; if an acquirer made of offer of double the share price it would only be a % of his overall cost, since he'd be forking out about £1200M for the debt as well as say £560M if he paid 84p/share. ~£1760M. At 42p/share it would be about £1200M + ~£280M for all the shares, = 1480M. Paying double the share price of 42p would cost an acquirer only 19% extra ! These are rough numbers to try to illustrate a point. ....big financial houses with cash or cash raising capability could well be interest, Goldman, Blackstone.. & the interest rate on deposited cash has been stuck close to zero for years & imo is virtually g'teed to stay close to zero, since Govts & the ECB are all sitting on mountains of debt, if the ECB allowed the % rate to rise the economy, banks & all of us would be screwed, so it ain't gonna be allowed to happen. (& in a financial climate where year after year the Govts just want to print more & more money, then bricks & mortar are surely a better assets to hold rather than paper money, which after all is just paper !
illiswilgig: Hello QP, you make some very valid points. I've not checked that far back - but I assume you are correct and MARS share price in 2007 was 470p! Sad for anyone who has held since then. So to answer your question I expect that MARS is making a lot less profit today than it was 10 years ago. Hence the shareprice is a lot lower. It is also possible, indeed probable, that MARS is rated much lower today than a decade ago, perhaps in the expectation that profits will continue to fall. Probably a bit of both, less profit and lower rating = 100p shareprice today. The question is not what happened in the last decade - it's what will happen in the next decade. At least that is the basis upon which I invest. You are certainly correct about the macrotrends of online versus highstreet retailing and about the rate of closures of pubs. Though the next decade leading to all pubs being closed is about as likely as MARS shareprice falling by another 370p? But everything has a value - even if its a very low one? So after Amazon's meteoric shareprice rise and Marston's shareprice plummet which shareprice is closer the companies intrinsic value? It's interesting to note that Amazons profitability is actually quite low. It makes a 3% margin, 51bn sales and 1.6bn profit (Q1 2018) whereas Marston's has a 10% margin, 1080M sales 107M profit. Expectations of future profitability at Amazon are incredibly high the shareprice is 250 times current earnings - whereas Marstons is only 7. So Marstons is certainly valued very low - is it low enough? You are right about the rate of pub closures. But I think its very healthy, if only the restaurant sector had been shutting as many restaurants they might not be going bust quite so often! Over the last 6 years or so 60800 pubs in the UK have reduced by 10000, about an 18% decline? If Marstons is an average estate I'd expect to see a similar rate of decline of a few percent annually? So I've had a look and the answer is not simple. It appears that Marstons had an estate of around 2000 pubs a few years ago and now its 1568. But they sold 388 pubs for £144million and another 'portfolio' of 202 pubs. So as well as selling pubs they've also been opening pubs to end up with 1568 today. Of course selling pubs is about as good as closing them down if you don't get much cash for them. But I notice in the results to October 2014 they actually booked a surplus against the disposals of £37.5m ie they disposed of the pubs for more than their asset value on the books. That's a really key point. As well as a lowly rating on its profits and a reasonable margin it appears that Marstons pubs might actually be worth more disposed of than they are held on the balance sheet. So although pubs are shutting down - it appears that it might be because the pubs are worth more closed and sold on than operating as pubs? Not that I am promoting Marstons should sell off all its pubs and return the profits to shareholders, although others might do - but if they did so in an orderly fashion the likelihood is that I'd get back more than my shares are currently worth. (IMHO) The net asset value of the estate and the dividend cover make it likely that Martsons shareprice will not fall significantly in the future, so its a low risk investment for me - with a 7% return and the possibility of capital appreciation. I will leave my take on the new build pubs, lodges the 4000 room target and the breweries for another day. I think I will be reaching for the buy button again tomorrow, If you were hoping to convince me not to buy MARS then I am afraid you've been counterproductive QP - but thanks all the same, Cheers indeed, Illis
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