Marston's Dividends - MARS

Marston's Dividends - MARS

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Marston's Plc MARS London Ordinary Share GB00B1JQDM80 ORD 7.375P
  Price Change Price Change % Stock Price Low Price High Price Open Price Close Price Last Trade
8.80 14.49% 69.55 62.30 69.55 62.85 60.75 13:48:18
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Industry Sector

Marston's MARS Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

Top Dividend Posts

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 Net Profit of 120m, Free cashflow of over £100m. PE or PCF 7, 10 gives Mcap of £840m-£1bn or 125 pence to 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) Therefore Profit before tax could be >£150m Net profit after tax of >£120m On a very fair forward PE of 7 that’s a Mcap of 840m or share price of 125 pence It maybe more accurate to say (given non- cash adjustments again) that its their net/free cashflow which should be over £100m and again a pretty safe multiple of 10 give a Mcp of £1bn of 150 pence. 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
careful: 25% down in 30 minutes. This market is never boring. Share price not related to long term vale or prospects any more. A traders market.
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.
kirk 6: Mid June lol? Let's not get too excited! July is brilliant news certainly for Marstons as a business! Roll on a huge recovery now in share price
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.
archy147: So a 5% or 10% drop in sales is really bad, fair enough. Are you saying this will be a permanent drop of 5% or 10%, so every year from now on? And you don’t think the 60%+ drop in the share price adequately reflects this? As wigwammer says, I don’t think you’re taking any account of the battering the share price has already had... Fact is markets always over-react to bad news (or indeed good news), look at every crash in history, including the last one that resulted in austerity. Then MARS bottomed out at 59p in Nov 2008 before recovering to 132p 6 months later. Look at any share and what happened in 2008 and you will see a similar pattern History tells us there is further recovery to be had again here, not just in MARS, across the board.
wigwammer: 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, but I see little value in repetitive negative commentary that makes zero acknowledgment of the sentiment/valuation already reflected in the share price.
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 !
brewery boy: Why should dividend be cut now? Board are well aware of need to reduce debt, but this is nothing new and remember dividend increases as share price goes down.I am fairly confident that MARS can do well but potential investors require patience and stamina.
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