Mitchells & Butlers Share Discussion Threads

[buywell3] 01/6/2022 08:49

buywell3 4 Oct '21 - 20:56 - 768 of 824 Edit

Charts said it all


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[cjohn] 24/5/2022 19:43

Hi, m-kerr, what is the likelihood of another capital raise?

[m_kerr] 18/5/2022 18:45

it's all about the onerous securitisation here. decent figures in the circumstances, but they're still down about £30m because they're locked into paying double the going rate for property secured debt.

on an asset based measure this is still absurdly cheap. your talking about a 35% discount to net book assets, which IMV is itself grossly undervalued. the alternative use of some of their huge 1.5- 2 acre + sites in pricy residential areas is likely to be well in excess of the valuation that depressed figures for fair maintainable trade produces.

at this price private equity could inject £500m of capital to secure the future of the business, and still be buying in at a huge discount to value. then look at running the business more efficiently to drive up returns on capital and sell off parcels of land to raise cash. weaker competition will go bust IMV, leaving fewer options on the table. this is a great entry price to investors willing to look through the noise and uncertainty to see the assets on offer.

[km18] 18/5/2022 14:26

Mitchells & Butlers (MAB) posted Interims this morning. The business has bounced back from COVID, posting like-for-like sales growth of 1.0% over the first half versus FY 2019 (pre Covid-19) and has seen encouraging like-for-like sales growth of 3.8% versus FY 2019 through the second quarter. Total revenue was £1,159m, operating profit £121m, profit before tax £57m and basic EPS 7.7p. Net debt reduced to £1,253m (HY 2021 £1,472m), excluding £483m of IFRS 16 lease liabilities (HY 2021 £541m). Sales recovery is ongoing, cost headwinds are a challenge, management are pushing forward with capital investment plans which are delivering strong sales uplifts. Valuation looks pretty attractive with forward PE ratio under 10, profitability ratios are decent for the sector, operating margin should return to double digits. Share price is in a 15 month correction which appears to be extending. There is no rush to buy yet, but there are plenty of positives. M&B is a share to monitor for now....

...from WealthOracle

[buywell3] 18/5/2022 09:44

buywell posted this a while back


buywell3 4 Oct '21 - 20:56 - 768 of 824 Edit

Charts said it all


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[buywell3] 18/5/2022 09:38

MAB and MARS have not been a very good investment imo since Covid hit

MAB just like MARS have a thin yellow segment

[cockneytrader] 18/5/2022 07:41

The only way that pubs and restaurants survive this inflationary nightmare is the government cut VAT to zero for these groups. Without this many will go to the wall.

[pastyman3851] 18/5/2022 07:35

1 share, I hold mine with Halifax and had to get in touch. My friends who has his in HL got his automatically.

[cockneytrader] 18/5/2022 07:28

With higher anticipated costs going forward this business looks unviable - our government have sold these businesses down the river. Expect further share price falls.

[lawson27] 17/5/2022 15:44

joined you for a few @212.80, hoping the figures dont disappoint tomorrow! GLA

[m_kerr] 06/4/2022 19:17

the odyzean 55% shareholders are basically going to end up controlling this company one way or another.

my guess is that they will underwrite future equity raises, thus increasing their percentage ownership over time. remember they need to generate £250m of EBIT just to fund the mandatory bond payments and pension top up. once the pensions been topped up this falls to about £200m. at the best of times they generated about £320m of EBIT, giving them minimal cover. realistically they will struggle to make these payments. there's just too many inflation headwinds. wages, food prices, energy, construction. they may benefit from a contraction in pub / restaurant supply, but you can't squeeze blood from a stone - customers are struggling financially.

if odyzean take over through stealth (if they haven't already), i.e. by underwriting future equity raises, they'll effectively be taking over the company without having to pay a premium. the price could be set a little above what other investors would stomach, but well below intrinsic value, for instance. it's worth their while doing that as they'll be taking over £4bn+ of property at a hefty discount.

such a shame as there's nothing much wrong with this company - other than the onerous securitisation. market rate interest on £1500m of secured debt would be only about £50m per annum.

[hibberts] 29/3/2022 12:50

I don't have many shares but have had them for many years I still have the old paper share certificate.
If you hold your shares in a nominee account I think you have to contact your broker and ask them to contact Mab to collect your voucher.

[reviewwworld] 28/3/2022 18:07

I didn't get one, what's min holding you need?

[hibberts] 28/3/2022 16:27

I got mine.

[katwin] 26/3/2022 11:25

Did anyone receive the shareholder voucher booklet? I have never received any.
Toby is getting busy again.

[m_kerr] 21/3/2022 20:09

sale and leaseback won't happen review - why pay 5%+ RPI linked yields in rent, when you can borrow at 3-4% not indexed linked? plus you lose control of the property and lock yourself into potentially unprofitable sites for the long run.

bad / short term thinking management teams used to do s&l to con their investors that leverage was lower than it really was. IFRS 16 now means they have to put lease debt in full view on the balance sheet. it's destroyed a lot of value at companies like tesco and sainsbury's and led to the demise of debenhams.

[reviewwworld] 19/3/2022 06:54

I've mostly bought MAB as an off the radar real estate play. Smart management announces a sale and lease back of their entire portfolio. Uses that huge cash injection to rejuvenate the ageing business and to return cash to shareholders. Stock would absolutely rip.

[m_kerr] 18/3/2022 18:33

they will struggle IMV in the medium term.

however, upside could still be huge. remember that each £2.38 share is backed up by £6.70 of freehold property (property that could be revalued upwards after the covid impairment).

enterprise value excluding leases is actually a very modest £2.7bn. the issue here is that they are existing to service the amortising debt. the inflationary and consumer budgetary pressures are significant. return on assets has always been low (sub 8%), and this is just my view, but their brands are tired and very 90s.

to sum, they are extremely asset rich, but generate very little cashflow, and so are operating under something of a straightjacket at the moment.

i've changed my mind on this somewhat. i think their property estate could be a goldmine. i've alluded to this before, but many of their sites (built decades ago when land was cheap) are on very substantial plot sizes with large car parks, many in very residential areas. there's a hell of a lot of real estate embedded here, much of it in suburban locations that are seeing sales recovering far quicker than city centre locations. their like for likes are now trending very close to 2019 levels.

where else can you buy £4bn of property for £2.7bn? in a high inflation environment this could be a very profitable place to park cash if they can manage the debt repayments (looking difficult though). it's the perfect size for private equity too, and IMV will almost certainly be taken over within the next few years as there is significant scope to manage these assets more effectively.

[phillis] 15/3/2022 16:25

How about the effect of soaring energy costs

[reviewwworld] 15/2/2022 14:33

Surprised how quickly MAB dropped with travel stocks etc around Ukraine but no interest in the quick rebound like they are having

[reviewwworld] 28/1/2022 10:33

Any reason for today drop?

[netcurtains] 20/1/2022 16:01

If you go to my website and select "pub restaurants" via the "select shares" button you will see that MAB has about the best NAV in the sector...
(to order them by NAV/Market Cap press the header column with the same name. MAB comes first.

[netcurtains] 19/1/2022 16:17

MAB has the best NAV figures for any pub chain.
With the end of all lock down rules a big gainer might be pubs.

[skinny] 12/1/2022 16:24

Mitchells & Butlers will release its first quarter trading update on 13 January 2022.