Marston's Share Discussion Threads

[jeffian] 17/5/2019 16:14

CC2014,

I suppose it is just that it looks cheap with little risk to the downside. Compared to their nearest competitor, Greene King, on a PER of 10x and a divi yield of 5.3%, MARS' PER around 7.5x and a dividend yield of 7% don't require much or any growth. Despite my moaning, that's why I hold them, for the income with some hope of capital growth eventually.

[cc2014] 17/5/2019 15:06

The share price continues to rise in a way I did not expect, which is to say I didn't see this coming based on the interims.

I thought the interims a bit average. Ok, some more detail about the debt reduction plans but nothing really we hadn't been told before. The re profiling of the debt whilst helpful didn't do much for me as it mostly pushed the interest into later periods.

I'm guessing therefore the rise is to do with the underlying trading performance and the confirmation of full year expectations. I note others such as JDW have been moaning about cost inflation impacting their bottom line so maybe MARS having this under control was sufficiently well received to merit the push up in price.

Perhaps this was enough with falling bond yields globally and little risk to profits from Brexit to deserve this move up.

Only most of this is not new news. Perhaps the market is becoming a little more confident that the directors will deliver what they say they are going to do.

Or maybe switch to here from those selling utilities?

Any thoughts anyone?

[chinese investor] 17/5/2019 08:19

120p Soon !

[illiswilgig] 16/5/2019 14:23

With IAS-19 you are a hostage to fortune and the markets as to when the revaluation of the pension liability happens.

The except below from PWC (sorry about the rubbish formating) indicates around a £10m increase in deficit of a £500m fund for every 0.1% decrease in the discount rate. The indicated fall of around 0.3% does result in around a £30m increase in liability (for a £500m fund).

If the bond yields rise again (price of bonds falls) then this will reverse.

MARS is neither ahead nor behind the curve - simply accounting for the change in bond yield at their year end date.

cheers



Observed market practice on pensions accounting assumptions at 31 March 2019

This document sets out the market practice on pensions accounting assumptions at 31 March 2019 that PwC has observed, key market indicators and current pensions accounting developments.
Assumption Assumptions at
31 March 2019 Assumptions at

Optimistic Median Prudent Optimistic Median Prudent (0.1% pa/1yr )
Discount rate 2.6% pa 2.4% pa 2.3% pa 2.8% pa 2.6%
pa 2.4% pa


31 March 2018 Sensitivity for
£500m scheme
(0.1% pa / 1yr)

c.£10m

[fenners66] 16/5/2019 12:21

Cheers quady - I stand corrected on the cost of the recent court case for pensions.

However that leaves about £34m that no one else is bleating about ; or are they just ahead of the curve ?

[spacecake] 16/5/2019 11:26

MARS is a dusty dead planet and fit only for short life robots.

[skinny] 16/5/2019 08:19

Just like the management (not).

[chinese investor] 16/5/2019 08:13

To Mars And Infinity...
...But I'd Settle For 120p !

[jeffian] 15/5/2019 23:14

Have corporate bond yields fallen in the period? Surely they've been on the floor for ages?

[quady] 15/5/2019 20:16

Fenners - 'The deficit on our final salary scheme was GBP23.0 million at 30 March 2019 which compares to the GBP15.6 million surplus at last year end. The principal driver of the move to a deficit is the lower discount rate as a consequence of falling corporate bond yields in the period. In addition, an allowance of GBP4.6 million has been recognised in respect of Guaranteed Minimum Pension equalisation following the conclusion of a recent court ruling in respect of this matter.'

[jeffian] 15/5/2019 17:30

The title of this thread is correct.

[spacecake] 15/5/2019 17:27

But who on earth would acquire a business with six antiquated breweries ?
Who knows they might buy another one, that would be fun.

[porsche1945] 15/5/2019 11:38

I need this to get to 120 to break even, please god. At least they have scaled back their expansion plans, daft to keep taking on debt to expand into what, a shrinking market in the UK which looks like it is on the verge of a hardcore brexit fiasco reccession whichever way the sxxtshow now goes. The managemnt seem pretty poor like most ftse 350 dross, a takeover would be heaven. 140 take out price.

[spacecake] 15/5/2019 11:27

The share price has been going down for 3 years, it will feel like moving heaven & earth to get back up to that level (160p), 6 years, longer or beyond my lifetime ?
RF - Please don't increase the dividend before introducing a share buy back and cancellation scheme.

[fenners66] 15/5/2019 11:25

I do wonder at the missing detail from the "interest rate swap" what is the cost - its all right saying that its neutral over time - but what risk are they assuming in order to gain the interest reduction ? These things do not come for free.

Massive swing to pension deficit - passed off as if its not a problem - gilt rates and mortality (?) really what about the guaranteed minimum pension equation of women vs men that has just gone through the courts ?
And why have I heard nothing about gilts and mortality from other companies pensions ?


Debt ratio looks far too high.

Yield looks good - but so did Vodafone until yesterday then the divi cut - so you cannot believe company plans for divis until you actually receive the cash !

Will read some more - I am interested in the divis but only if they are sustained.

[skinny] 15/5/2019 11:01

Looking at the volume today so far - I assume that the perception is positive.

Indicators on the up too.


free stock charts from uk.advfn.com

[quady] 15/5/2019 10:50

Agreed illswigig, pedestrian, similar to my thoughts on last year. I wondered then and do again now wonder if market reaction is due to a superficial view on statutory profit change. I kinda get that about the pension valuation. My confusion was more that the triennial review was reported last May as a deficit, yet on the same day a surplus was reported in the interim results. As you say it'll be accountancy widadary but it makes it all the harder to judge when the additional contributions will actually stop. That £8m/year being freed up was part of the debt reduction story at the AGM.Its not much compared to the debt pile but is 10% of pre-tax profit which isn't to be sniffed at.

[illiswilgig] 15/5/2019 10:36

I am neither excited nor disappointed by these results. Pedestrian - as Jeffian has said. But then I rather think thats the nature of the beast - and I would be rather worried if it starts to gallop!

I also wondered what the £4m on the brewery integration was about!

Pension contributions are set by the triennial review by the Actuary with the Trustees. Annual swings are just superficial balabce sheet adjustments based upon long term yield and mortality changes - not real. If anything in pension accounting can be said to be real. Payments won't change until the outcome of the next triennial review.

cheers

[quady] 15/5/2019 10:19

Clearly I know nothing, I was more disappointed by this year's midyear than last year but Mr Market thinks the opposite.
£4m on Charles Wells integration sounded very suspicious to me, was a bit less last year and it was only a £55m deal done two years ago. Kinda glad the pension 'swung to a deficit'. Was confused last time how it was in surplus yet £8m/year additional contributions required for what, five years?
Unclear how much the refinancing to reduce interest has cost upfront. IFRS16 to cause a significant impact for 19/20. Ok, that's an accountancy thing rather than cash flow, but at the AGM it's impact was downplayed.

[jeffian] 15/5/2019 09:58

Hmmmm! Plod, plod, plod. I suppose it's forward motion, but very pedestrian. One would like to see a greater sense of urgency from management.

[chinese investor] 15/5/2019 09:47

End of June 2019 !

[luderitz] 15/5/2019 09:32

How soon exactly ? -):

[chinese investor] 15/5/2019 08:38

120p Soon Then !

[skinny] 15/5/2019 08:36

JP Morgan Cazenove Overweight 105.70 123.00 Reiterates