Marston's Share Discussion Threads

[smithie6] 26/3/2020 11:55

fenners

its a 'nice' idea (!!)
in these dark difficult times
to just buy the debt of different cos. that currently are closed for business (Marstons is not fully closed, still brewing, packaging, transporting & selling bottles & cans)

& then call in the debts & own the cos. since they cant pay

& get to own companies numerous cos on the cheap

& laugh all the way to the bank

but
you can dream on

it ain't gonna happen

a) banks are being backed up by the Govt (& they need it)

if they step out of line the Govt. will nail them

b) the Govt wont allow it

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you also propose selling the limited numbers of ventilators at say 10 times their normal price ....just to make more money ??

(we all have to work together to get thru this
....& then we (the rich countries) also have to try to help poorer countries that don't have a fraction of the medical facilities or medical people that we have)

[smithie6] 26/3/2020 10:53

I see that Mitchells & Butler is up 10% today

so imo the pub,/beer/leisure sector is still in fashion with share buyers

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@ 11am
Wetherspoons is up 5%

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& Marstons dipped to 41p & now rising up/to thru 43p

[smithie6] 26/3/2020 10:22

novel ideas !

but if someone goes to a bank & says "can we buy your loan number 28, so we can force the co. into administration"

they won't have much success !!

& anyway, the agreement of the bod would be needed, & that wldnt happen

& in any case the co. can borrow as much new money from the Govt as it wants, either at 0% or very close.
The Govt. is supporting cos. & workers & non-workers &....

[wigwammer] 26/3/2020 10:19

Small interjection... anyone who acted on fenners musings at 25p - and either sold or didn't buy - is currently 60%+ offside..Please continue..

[fenners66] 26/3/2020 10:14

Just a quick musing - not looked up any of the figures etc - based on the idea above.

It seems the debt is in control.
If the business continues to need cash why buy the shares ?
Just buy the debt outright - possibly at a discount to the book cost.

Then wait for the loans to increase over the period of cash famine.
There will be more "assets" put on the market in the months to come - so expect asset values to fall.

That would increase the gearing and give the debt holders something to think about .

Once the debt is owned , force administration and take it all without shareholders.

Even if the debt was bought at a premium it saves buying the shares.

Debenhams was flagged for months as in debt trouble - despite having shops open and cash flow.

Ashley realised too late that the debt held the cards not the shares.

Debt holder could approach current BOD and offer them a deal to stay......

[smithie6] 26/3/2020 09:26

... after breakfast I'll try to check the interest number & then adjust my post (but, as you agreed, the general point made is valid)

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looks like there was a special deal made to 'lease' £400M of the tang. assets....but with the assets reverting to Marstons at the end of the 'lease'
...I dont really understand that, especially in terms of accounting ..

will that produce a £400M step increase in tang. assets on the day the lease ends ?

or does the tang. asset value increase by a certain amount each year ?

(it is a noteworthy % of the tang. asset value & bigger % of the NTAV)

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I had a quick look at the info for the acquisition of Greene King in August 2020. (lse:gnk...the full RNS is there on advfn)
looks like ~ £4Bn in total for the shares & the debt.....so in these low % or zero % years (decades ? , Japan) there are people with big money looking to get a better return than ~0-1% to have it sitting in the financial mkt.

[wigwammer] 26/3/2020 08:51

Smithie. Your interest number looks a little high. Their gross interest charge is between £75-79m pa, depending on whether you use the cash flow or income statement. On the other hand - this is quite a capex hungry business, so I don't think EBITDA is giving a clear steer on what the normalised cash generation of the company is. But yes - your point is a good one that the sector attracts M&A interest. Greene King and EIG were substantial deals and recent. ATB.

[smithie6] 26/3/2020 08:33

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 ! +/- ....in 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 !

[smithie6] 26/3/2020 07:47

jeffian

SFI. cool, thanks, I'll take a look

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HPA. I'll try to key an eye out or remember....but I don't normally ever visit that area/region

[smithie6] 26/3/2020 07:45

Skinny
spot on !

HSB
Horndean Special Brew
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Ghost Ship
..what a great name for a beer !

[skinny] 26/3/2020 07:03

Gales HSB - Horndean Special/Strong Bitter?

Jeffian ESB is definitely one of my favourites historically and I had London Pride at my wedding 100 years ago. Youngs Special and the infamous "Ram & Spec" also their session beer Ordinary - neither a shadow of the former selves - also favourites as I grew up with 2 of the best (to my mind) Youngs pubs around - not that in the 70s, there was a bad one!

My bitter of choice these days is Adnams Ghost Ship.

[jeffian] 26/3/2020 00:11

Smithie6,

If you're interested in Surrey Free Inns search the ADVFN threads using the epics both SFI and SUF. This was a thread I contributed to, starting at #34.

[jeffian] 25/3/2020 23:56

Yes, he was quite a lad. We very nearly bought them but cried off after a detailed trip round the estate. He didn't take at all kindly to being told he was probably trading while insolvent! Maybe that was what triggered the share sale?!

I'll leave others to play your HSB competition, but I would say that Fullers' ESB is among my favourite ales. I can smell the brewery from my house when the wind's in the right direction!

Talking of initials, do search out HPA, Wye Valley Brewery's Hereford(?) Pale Ale. I've only come across it in a fairly limited area of Hereford/Worcs but it is God's own nectar. Straw-coloured, hoppy and delicious. Can't remember the strength - about 4.5 I think.

[smithie6] 25/3/2020 23:42

jeffian
you know all the history of the sector

you recall the SFI scandal I guess ?
false accounts if my memory is correct
(they were quite good at buzzy trendy High Street bar venues)
& the chairman sold £182k of shares X months before the collapse !

did any of the directors ever get punished in any way ?
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buzzy trendy bars
...fantastic profit producers when a bar is 'the' place to be, & there is a queue to get in
....but massive investment to fit them out...& high rent...as you know/mentioned

..as you said, its need the right type of direction to compete, ppl with a background in tied pubs are likely to be lambs to the slaughter.

[smithie6] 25/3/2020 23:26

since we have a few ale drinkers posting

shall I test readers knowledge ?!
maybe Jeffian should not answer since he used to work in the sector so he has a big advantage & he might find it easy to answer

so, the question is
what is the full name of the Ale with this abbreviation
HSB ?


...I'll give a couple of clues,
- its from south of horiz. line of the M4
- the B doesn't stand for the word bitter.

[dinvester] 25/3/2020 21:25

Jeffian. "From tonight's London Evening Standard.... "

I thought that they sold off Pitcher and Piano some time ago.

Anyways, thanks for this refreshing news.
:)

[jeffian] 25/3/2020 20:05

Yes, obviously a lager drinker. Old Peculier, please!

;-)

[fenners66] 25/3/2020 18:00

I once had a night drinking Theakstons old Peculiar... (is that the same mentioned above?).
As a "lager" drinker I needed to take rather large swigs to get a sparkle to my eyes.
Started drinking pints in 4 pulls.

I gave the dubious fertilizing benefit over someone's wall to their flowers on the way home...

[jeffian] 25/3/2020 17:54

From tonight's London Evening Standard:-

"On the FTSE 250 merger and acquisition talk dominated proceedings.

Shares in Marston’s were flying amid rumours potential suitors are moving to snap up the pubs and brewery firm.

Marston’s results have been poor in recent years but traders dismissed those concerns as buyers would only be interested in its property assets.

The group owns six breweries, 1700 pubs, including Pitcher & Piano, and a hotel chain called Marston’s Inns.

One bond trader said: “There’s plenty of foreign capital circling the UK for assets and Marston’s has plenty of them. Everyone wants hard assets and cash at the moment. Everything else is still too risky.”

In August last year rival Greene King was bought out in a £2.7 billion deal by CK Noble, the property firm run by Hong Kong’s wealthiest man, Li Ka-shing, while the old Enterprise Inns also fell into private equity hands in 2019.


Marston's shares were up 24% or 8.7p at 40p. "

[john09] 25/3/2020 17:48

Aha a bit of bid spec for good measure. Perfect. See you in the am

[smithie6] 25/3/2020 17:48

I always wondered where the beer name Old Speckled Hen came from

...I had assumed that someone in a marketing department had dreamt it up

but appears that there is a story, here it is

"First brewed in 1979 by Morland Brewery in Abingdon, Oxfordshire to celebrate the 50th anniversary of the MG car company setting up in Abingdon, and named after the MG factory's MG car - the paint splattered Owld' Speckled 'Un."

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(if anyone is in any doubt, imo, people on the Island (& the big wet island next door !) are very lucky to be able to enjoy such a massive variety of top quality beers, which on draught can be at ok prices.
...in most local bars in most/much of Europe the choice is between the 1 industrial lager on tap (!!) & the same industrial lager number 1 or number 2 in bottles. :-(
(while yes, the lager in Eastern Europe is quite good (& cheap !) & smoother than say in Spain but its just lager & not 'tasty')