Marston's Share Discussion Threads

[spacecake] 25/8/2017 12:24

EI, one of my local pubs has a high staff turnover rate, seems like every month a few new faces appear.

448 unfilled bar staff jobs in Hampshire

[exel] 25/8/2017 12:01

also, we get better export pricing on the beer we (and MARS) exports.

[arf dysg] 25/8/2017 11:20

If the pound's going down, we should get more international visitors buying beer.

[lurker] 25/8/2017 11:03

OK - just bought some more at just under 112.5

[essentialinvestor] 25/8/2017 10:20

Spoke with a friend of mine who runs a pub in Hampshire yesterday,
recruitment very difficult ATM forcing costs higher with hourly rate rises.

Some of the sector is highly reliant on EU migrant Labour.

[11_percent] 25/8/2017 10:08

I will hold off buying, it's got to turn/level off at some point.

[lurker] 25/8/2017 09:49

Considering buying more today...

[exel] 25/8/2017 09:19

Guess I'm in the same camp, Spacecake, and you have put your finger on one of the key price drags here - Brexit. Can't believe we'd be looking at 113p, today, were it not for the consumer confidence drag that this irrational unwanted Brexit threat has imposed on us all - coming after 7 years of unevenly applied Austerity. That said, international holiday-makers coming TO the UK were reportedly up 18% this summer, so these things have a way of working out. Would also bet that many of us elected to say IN the UK after looking at growing airport queues and delays etc. Whichever way one looks at it, Brexit will run for a bit longer, if stopped, or a lot longer if not. Are people going to stop travelling within/to this Country on business and/or pleasure? Will people deny themselves a meal out with a few drinks? As jeffian noted earlier, they will be various folk 'trading down' to a Marston's meal and saying to themselves - that was good value! I had one of these 2 for 1 deals this year at a new-ish March outlet. It was good quality and good value, and well subscribed mid-week by lots of pensioner 4-somes. Keep these people happy, and they'll keep coming back!

[spacecake] 25/8/2017 07:29

I'm a medium/long term hold here. - 3 to 5 yrs ?
Thats right through the brexit date range and all its uncertainty.

[exel] 24/8/2017 19:14

Lurker - some solid net buying today (mine included) may persuade you? if not already? but that must be your call alone. DYOR and follow your gut + your own investment criteria.

ianood - thank you, MARS has high-ish mortgage-style aggregate debt, freehold-backed, equating to high-ish but not, in my view, excessive gearing (for the sector and its market situation & prospects et al). That said, the TNAV to Market Capn. now sits at about 65% - hardly a distress level? and well above GNK last time I looked. This must all be viewed together with a progressive dividend of 6+% reasonably well covered and its credible (if not stellar) medium-term growth prospects. I'm a medium/long term hold here.

[ianood] 23/8/2017 16:37

Excel good post and glad to see somebody else who understands the IRS that they have in place. Makes a change from the "look at the level of debt" brigade :)

[lurker] 23/8/2017 13:45

Ouch! Should have watched and waited for longer...now at 5 year low

...should I buy more?

[lurker] 23/8/2017 11:25

Bought some at around 113.8 to 113.9 as I decided a p/e of 8 with a 6.4% dividend and a positive trading statement on 26th July was a set of good reasons to have a share nearly at its year low.

[exel] 23/8/2017 11:10

From memory, the MARS pub/lodge/restaurant estate is about 97% Freehold, and their free-hold secured debt is in the main reasonably long-dated and not unreasonably priced. In fact, the interest SWAP cover they have in place would mop up quite a big upwards movement in rates, (albeit not covering all its debt) were that to happen - so much so that the high-ish cost of this 'cover' has been one of the various perceived negatives here. Much has been made of brewing as a sector in decline, and others know more of this than I do. But what I drew from the CW acquisition was the otherwise £6m canning CapEx (had been planned by M) that MARS was able to stop, given that 'this facility' came within the CW brewing package. Also, the distribution deal that M did with CW (who kept their pubs, having in effect sold their brewery to lease back the beer). Thought that was neat for MARS who get more throughput and greater reach into Scotland (McEwans et al). Contrary to 'beer & brewing' gloom, I recall that (pre the CW deal) brewing & export etc was a nicely growing segment of MARS per the last AR. So I still think they will be able to conjure an overall profit from everything they have, and possibly a growing profit, once it all settles down. Also, the lodges coming into commission (at the rate of 1 or 2 per month) are doubtless 'not all full to capacity' from day 1. It must take some months (years maybe?) to get such units 'known & repeat-used'. In light of that (if anywhere near right?) the fact that MARS is pressing on with (but not in fact accelerating) its 'build & open' schedule indicates to me that the Board & Lenders must have reasonable confidence that such future investments are justified, base on the track record/occupancy of what opened last year and the year before. I will try to meet the company and get these views confirmed or amended as appropriate.

[exel] 22/8/2017 12:53

quite uncanny!, not that we are of the same mind on this, jeffian, but at the very same minute! Odds against that? Anyway, keep well and keep posting. your wisdom, relevant experience and deep knowledge of this stock and its sector are very much appreciated by most (if not all) on this board.

[jeffian] 22/8/2017 12:27

#2211,

That's the point, Spacecake, they evolve. Yes, a lot have closed but that was probably because there were too many. I went to school in the 1960's in a small town with a population of around 3000 - and there were 13 pubs! When I worked in a regional brewery in the 1980's with an estate in the rural South (Wilts/Hants/Dorset), it was not unusual to have up to 3 pubs in a village of a few hundred people. Unsustainable, so, yes, a lot went for higher value uses (in our case, residential development with each pub providing 3 plots - pub building, garden and car park - leaving one pub in each village to reap the remaining aggregate trade). And I doubt that many of the new pubs being developed are "micropubs with room for a couple of dozen people if you're lucky". Ask Wetherspoons and MARS itself!

Edit: exel - Snap!

[exel] 22/8/2017 12:27

Jeffian is right! (thank you again, Sir!) This tough period (sentiment & consumer confidence downer, et al) will probably not be the end of pubs or specialist pubs/eateries/accom. etc, such as MARS has refined, developed and morphed into (via its well segmented estate and growing beer businesses). Same applies to many other things/sectors that are on the ropes, right now. Saw a report from Hargreaves Lansdown (just yesterday) that MARS was among their top 10 client FTSE250 buys in July17. That surprised me, but maybe not when you look at the div! Do bear in mind that when underperforming pubs close (as Spacecake notes) they get SOLD for value for many other purposes. Also, those going off market free up drinking/eating demand for well-run joints. In my village last night: Pub at one end of high street (just sold for a premium price) was rammed. 150 metres away, a well-known local pub was empty. People make choices. I went to the empty one (a Pubmaster cast-off which will become a restaurant idc) to look at my phone for 10 mins and have 1 drink while doing so in peace & quiet. That was a choice, made for a purpose. If I was in a social group, it would have been the busy one for the colour and the buzz. MARS knows its market, its customers, and picks its locations carefully. If it has to shed the odd unit, they are not given away!

[arf dysg] 22/8/2017 12:11

ianood (2204) "I don't think it is, not with unemployment at historic lows!"

ianood (2206) "I just quoted a fact, employment is at a record high!"

First you quoted UNemployment, then you quoted employment.


Any figure on the above must be picked up by the scruff of the neck and given a good shake to see what falls out. Examples:

If the population goes up by 10% but the number of people in employment goes up by only 5%, is that good or bad? The government will proclaim that employment has increased (good news!) while the opposition will proclaim that the employment PER PERSON has gone down (bad news!). That applies whichever party is in power on the day.


Is 22 hours a week a job? Is 40 hours a week a job? How about 60 hours a week? What if it's volunteering rather than paid employment?

If two people each have a 22hr/week job, is that TWO jobs as opposed to ONE job of 44hr/week?

How do you count it if a person has a bar job most evenings (say at MARS!) and they have a different job in the day? Is that two units of employment or one? Is it better to add the hours worked or the salary received?

Comparing salaries from different years runs into the issue of inflation. Should we be comparing inflation-adjusted GDP per person rather than anything else? Maybe that should be person of working age (say 18 to 65). That would tell you something else again.


This is the tip of a large iceberg and the sound bites on the news don't tell you what's really happening.

[jeffian] 22/8/2017 12:11

Yes, AD, I think that's absolutely right. People moan on about "debt" these days, but there was a time when you were castigated if you held cash on the balance sheet and something had to be turn to make balance sheets 'leaner' - hence such disasters as GEC's £3bn cash turning into Marconi's bust and, yes, it probably was some of the same advisers involved (and paid on the way up and then down again!).

[spacecake] 22/8/2017 12:02

"Death of the Pub"... all I would say on this having started my working life in 1975 is there's a lot less than there used to be. Some of my old haunts are now nursing homes, fitness centres, architects offices, student accommodation, restaurants, teaching academies and of course demolished for housing or other use.

But we have seen the rise of the micropub with room for a couple of dozen people if your lucky, brewpubs as microbreweries expand into old industrial buildings.

[arf dysg] 22/8/2017 11:55

jeffian (2198)

"2009. [MARS] put under huge pressure by their lenders. The problem was, MARS 'blinked' and panicked into a deeply dilutive Rights Issue (11:10 at 59p) and cut its dividend [...] The City have never really forgiven them"

Isn't this one of the contradictory and destructive ways of the City? Some in the City twist a company's arm to get it to do something unnecessary and the other City people punish the company for it. Perhaps they are even the same people.

[colonel a] 22/8/2017 11:12

Ianood,
Which fact are you quoting ?
Employment in absolute numbers ?
Employment as a % of those of employable age ?
Employment as the inverse of unemployment ?
Does somebody working 10 hours a week count as employed or 25% employed ?
etc.

I was around when unemployment mushroomed in the 70's and as I see it most western economies {still} have brutally high levels of unemployment and underemployment.
Although I'll concede neither positive spin nor my gloom and doom have much bearing on MARS.

[ed 123] 22/8/2017 10:54

No problem, Ianood. :-)

I'm not looking for pro or anti Brexit arguments. I just want as clear a view as I can get as to what is actually happening. Sometimes that means looking through government data, rather than accepting it at face value.

Good luck.


You are one cool dude, Jeffian. Inspiring! Atm, I'm too worried to follow you, however. ;-O

[jeffian] 22/8/2017 10:39

Either way, pub trade will remain resilient imho. In every recession - and I've been through a few having started my working life in 1973 - pundits pop up and predict "the death of the pub". It hasn't happened. They just evolve with the market (e.g. the shift from wet-led boozer to food) and as they are at the lower end of the entertainment price spectrum, tend to be among the last things people give up and, indeed, many flourish as the restaurant crowd 'trade down'.