because the forecast is for splendid May Bank Holiday long weekend weather. That sort of luck can make all the diffference. As good a reason as any, to go with the theory that the shorts are unbunching now under 7.5%, the next news will hopefully be good news in the results, and in any case my belief there is a sustained dividend on its way.
a starter stake in GNK to defy all you wise heads shooting / shorting this down further. I re-read the recent trading report and thought there was hope. The confidence expressed by most commentators in the sustainability of the 6%+ dividend was the clincher, even those talking the sp down think it is pretty safe. I will double up if the sp does slide further.
Who are Capital Reasearch & Management Co building towards a 20% stake and is that a massive vote of confidence or signs of corporate activity on the horizon?
Reported shorts down to 9.01% after peaking at 10.66% on 10th April. These changes usually take a couple of days to feed through the system.
SP took a bit of a dip yesterday in a strong market. maybe not surprising after the great rise, bit stronger today. Will be interesting to see how this plays out. Could be a good time to set up an antiperspirant stall outside AQR and Marshall Wace offices.
Well good yield still yes, but pretty medocre update and the shares have gone up about 18.5% in 2 days !. Well i avoid buying things that have just gone up a lot, because they quite often fall back. And the mediocre update doesnt exactly encourage me to buy. MARS has been dragged up a bit as well, just have to wait a while and come back to these i reckon.
As I said before i am deliberately spreading out my buying over time. This week i picked up NG, CNA, UU and ITV. May have to average down on some or all of these as they are down slightly on my entry prices. Not a problem though. Was afraid they were going to shoot up to such an extent that i wouldnt be prepared to buy and im pleased that this hasnt happened.
Next weeks targets include SMIF (going XD i think). If trump does make a missile strike then there may be other bargains too !. Thats another reason why i didnt do more buying at the end of thIs week, well except for ITV when it went XD.
Restaurants are one thing, pubs like Greene King's another. I can go to a GK pub and have ten pints of beer with my mates, take my granny for coffee and cake, my wife for a nice vegetarian dish from the new menu and a glass of Sauvignon Blanc, my kids for coke and a bowl of chips, my father in law for the sports etc etc. They are a bit like McDonalds in that you always know what you're going to get, special offers, good value, nice beer. I could go on but I think this formula will outlive any temporary weakness on the high street, and if there is total disaster they will at least be the last to go. Mmm time to go for a pint of Abbot methinks
Been watching this and MARS with a view to buying at some point, but that day now deferred for a good while now i think. Trading update was at best mediocre as far as I could see, imagine if it had ACTUALLY been good !.
GLA holders, but I wont be joining you just yet after the 13.5% rise yesterday. Perhaps all the shooters capitulated ?.
EPS looks bang on forecasts but there seems a fair bit to wait for in the finals, the cashflow/debt could be affected by some of the additional capex and investment in prices and quality and changes in estate. It would be nice to hear about Loch Fyne plans.
City Pubs with LFL sales up 3.8% total revenues up 35% suggests the smaller operators are unsurprisingly outpacing GNK and Co and will be taking business.
Pub operators going through a tough time but GNK seem to be taking the right steps. I'll Hold for now
Greene King has stuck to its profit guidance, shrugging off any expectations of a downgrade, in what will come as a blow to short-sellers who had been circling the group.
Some had been expecting Greene King to follow peer Mitchells & Butlers and announce plans to ditch its dividend, given recent talk of difficult trading conditions in the pub industry, including higher business rates and wages.
It said it continued to expect to spend around £160m on its estate over the full year, and noted that its dividend was "sustainable".
The upbeat update is likely to have caught those who have been building short positions in the group off guard.
Currently more than 10pc of Greene King is out on loan to short-sellers, who take holdings in a business in anticipation of its share price falling. Those investors will have taken a paper loss of around £20m on the update.
Signs that the pub industry may not be in as much danger as expected were also apparent at smaller operator City Pub Group, which posted a 35pc revenue rise in its first set of annual results since joining London's Aim market.
Pleasing that the reaction was to applaud results better than competitors rather than focus on weaker outcomes year on year. I am sure the management are doing their best in difficult circumstances and the reports of numerous restaurant chains closing outlets demonstrate the excessive number of outlets seeking the leisure pound.
Cost reductions were more than anticipated and there should be a boost when the Spirit debt is fully renegotiated.
For me, a long term hold if the top management stays in charge.
GNK have shrugged of the gloom today. I wonder why it hasn't caught my attention before, AIM listed progressive very good yield, pub lunches the number one way in which baby boomers will be spending their comfortable retirements over the next 20 years. UK consumers are deserting the High Street, we are not moving house, so is this and holidays where our disposable income will be going.
If only there was a major sporting tournament this Summer to boost sales. Ah ... Novochok cocktails anyone?
So why has GNK been down in the dumps ... I get the debt worries but is that all?
Good enough for Pref as a replacement income choice.
Added to my list of ones to watch this morning, along with dividend stalwart MANX and the recovery prospects of PAF.
Come on GK get your act together ! I called with my grandchildren at Lincoln Beefeater on Tues lunchtime - the pub was full, we had to wait for a table. Maitre D Grumpy, Food very average, decor awful - There's plenty of scope out there for giving a good experience, but you have to be on the ball.
Pub Company like-for-like (LFL) sales for the 49 weeks to 8th April were -1.8%. The weather over the last 12 weeks impacted trading, particularly in our destination food-led pubs, and on an underlying basis, excluding the impact of snow, LFL sales in the year-t0-date were -1.2%. Both drink and accommodation LFL sales were ahead of last year.
Trading over Easter was strong with LFL sales up 2.8% against the Easter weekend last year, helped by strong sporting fixtures, especially football and boxing.
The targeted £10m investment we made in the second half of the year to strengthen our value for money, customer service and quality is starting to positively impact on trading, despite the continued challenging market backdrop.
We continue to reposition Pub Company to drive growth going forward; we will complete the exit from Fayre & Square by the financial year end; we opened nine new pubs over the year; and we invested core and brand conversion capex in 292 pubs.
After 48 weeks, LFL net profit in Pub Partners was -0.3% while own-brewed volumes in Brewing & Brands were -0.7%, ahead of the UK ale market* at -3.1%.
We remain on track to deliver targeted cost savings of £40-45m, we will have spent c. £160m in the full year in ensuring our estate remains well invested and our disposal proceeds are likely to be ahead of expectations at c. £120m following the sale of three high value leasehold pubs.
As a result, we expect full year profit before tax and exceptionals to be in the range of £240-245m.
With our high quality portfolio of pubs, excellent team, strong balance sheet and sustainable dividend, we remain well placed to withstand the external market challenges and deliver long-term value to our shareholders.
*BBPA May 2017 to February 2018
Further to my previous post
Current Short positions:
AQR Capital Management, LLC 1.40% 0.09% 5 Mar 2018
BlackRock Institutional Trust Company, National Association 0.66% -0.04% 8 Mar 2018
DSAM Partners 1.01% 0.10% 16 Mar 2018
GLG Partners LP 1.26% -0.04% 10 Apr 2018
GSA Capital Partners LLP 0.92% 0.11% 6 Apr 2018
Henderson Global Investors 0.52% 0.05% 6 Mar 2018
Marshall Wace LLP 2.59% -0.01% 5 Apr 2018
Systematica Investments Limited 0.70% 0.10% 13 Mar 2018
WorldQuant, LLC 0.99% -0.05% 4 Apr 2018
Some one has made a mistake!!! 15.8% or 9.99% short?????
The reported short interests are 9.99%, but that doesn't include short positions of less than 0.5% which there are likely to be a number.
Shares on loan are reported for end March are at 16.86% by euroclear site, in Baker05's earlier post. Shares on loan suggests that they have been sold short but not certain.
That suggests shorts are in the range 9.99-16.86% Either way, it's a lot which is not good, but does present the possibility of a rapid rise in the event of good news putting a squeeze on the short holders. A clean exit from Loch Fyne with decent price on that some other disposals would help, but a tough market.
Unclear what shorter's target is here, a divi cut or are they betting on a more serious outcome.
In her Inside the City column for the Sunday Times, Sabah Meddings looked ahead to Greene Kings trading update due this week, noting that investors would be holding their breath at this stage - and hoping not to be shedding tears into their pints of Old Speckled Hen.
Meddings said shareholders in the brewing group have had a few bitter pills to swallow in recent years, with its share price now half what it was at its peak in December 2015.
The company, with chief executive Rooney Anand at the helm, was not shying away from admitting trading was tough at the moment, with the firm expecting to take a Â£600m hit in the current year from a number of factors beyond its control - higher business rates and the national living wage chiefly among them.
Meddings said Anand has also had a year of unpredictable weather to contend with - a miserable summer, followed by a snowy, icy winter and a wet Easter, all likely to hit Greene King where it hurts.
But some of its injuries have been self-inflicted, with the acquisition of Spirit Pub Company in 2015 leaving the group with its pants down amid a severe downturn in casual dining, thanks to the inclusion of the restaurant chain Fayre & Square.
Anand wasnt sitting on his hands there, however, taking the axe to the Fayre & Square brand and converting the properties into classic Greene King boozers.
He was also implementing a Â£10m action plan, which includes price cuts, along with plans to save between Â£40m and Â£45m by slashing the companys overheads.
The firms fish restaurant chain, Loch Fyne, was also up for grabs.
Meddings said some of Greene Kings fans in the City remained hopeful that value could be squeezed out of these asset sales, along with the possibility for an activist investor to rustle up some activity.
However, she also noted that there was only so much a company can raise through disposals, with a large part of any proceeds likely to go to Greene Kings listed bondholders - those bonds being secured against the chains pubs.
With those headwinds in play, Meddings said it was less than surprising that short-sellers were moving in, with 15.8% of the firms shares out on loan according to IHS Markit, up from 12% at the start of January.
Greene King was indeed trading on a rather attractive 6.8% dividend yield, thanks to the beating it has taken on the stock market, with a price-to-earnings multiple of 8.4x making it look cheap.
By comparison, Mitchells & Butlers - which doesnt pay a dividend - was at a seriously heftier 17.4x.
But Meddings said Greene King was cheap for a reason, with 13-year CEO Anand fiercely protective of the dividend, while the market suggested he might have to cut such rich distributions.
The 53-year-old once boasted that investors know they are going to get it straight from me, Sabah Meddings wrote.
There may be a case for investing in Greene King - it has a good track record and a bullish management team - but it may be a little early to jump on board. Avoid.
I'm just hoping for a long hot summer, to get those beer gardens packed to the rafters, and a successful campaign for England at the World Cup will boost the takings at the bar further. Those two events will see a good recovery for the share price, of that I'm certain.
Pre-close trading statement for the 49 weeks to 8th April 2018 on Thursday 12th April 2018.
GNK making another attempt to pull out of the dive its been in for the last couple of years, it has tried a couple of times this year only to fall back further. News on 12th. could give a clue about this time.
"Questor: Solid foundations mean its too soon to call time on pub firm Greene King
.... The FTSE 250 group has 2,900 pubs, hotels and restaurants in its portfolio under brands including Hungry Horse and Chef & Brewer.
In addition, it has a heritage of brewing great beer brands: Greene King IPA, Old Speckled Hen, Abbot Ale and Belhaven Best.
Now the company is subject to a saloon debate all of its own. City bulls and bears cannot agree: is Greene King capable of pulling through the current consumer slowdown, or will it be dragged down further by its borrowings that date back three years to the £774m acquisition of the Spirit Pub Company?
So far the bears have banged loudest on the bar. Greene King shares have had a poor start to the year, tumbling 17pc in 2018.
They are changing hands at less than half the price of their peak in December 2015. The companys trading update at the end of January did not lighten the mood............
Greene King is not suffering alone. Rising business rates, the minimum wage, and commodity and utility costs have squeezed margins across the industry.
Anand has forecast an extra £60m of bills dropping on his doormat this year but is on track to offset most of that through cost savings of between £40m and £45m.
What is ironic is that serving food was once seen as the saviour of the pubs industry but Greene Kings trading has been softest in its value food pubs, which analysts at Morgan Stanley estimate account for 18pc of underlying group earnings.
The trouble is that consumers are spoilt for choice. So-called fast-casual dining has exploded and well-known chains have begun to take steps to rein in over-expansion.
If the going gets tougher, it could sell more pubs to pay down borrowings although this would dilute earnings
Hence the closures announced by pizzeria Prezzo, burger seller Byron and Jamie Olivers empire.
For its part, Greene King is scrapping its cheap and cheerful Fayre & Square food brand and selling its small Loch Fyne seafood chain.
What is also notable is the well-publicised decline of drinks-led pubs, otherwise known as the local. It has gone so far in some towns that Greene King is often the last man standing.
Young consumers might prop up the bar less and drinking increasingly takes place in the home, but this point alone is worth the bulls getting a round in. So too is the consensus that the groups dividend, yielding a thirst-quenching 7pc, is safe.
In November, rival group Mitchells & Butlers scrapped its interim payout and the All Bar One owner said it would keep its full-year plans under review. In contrast, Canaccord forecasts Greene Kings divi is covered 1.9 times and cover is growing.
The company has £2.3bn of gross debt, but showed last year it wanted greater balance sheet flexibility with plans to refinance £189m of Spirit bonds at a one-off cost of £43m. If the going gets tougher, it could sell more pubs to pay down borrowings although this would dilute earnings.
Morgan Stanley raised the prospect of an activist investor arriving on the shareholder register of any of the pub companies, as they have elsewhere in the leisure sector at coffee giant Whitbread and Madame Tussauds owner Merlin.
That could be a catalyst for asset sales, debt restructuring or more sector consolidation.
Questor has followed Greene King closely, recommending in December for readers to sell the shares. Since then, they have declined 11pc and at this level are worth another look. Pub landlords and restaurateurs face a tough few years ahead but trading on eight times next years forecast earnings, it is too early to call time on this particular operator. Buy."
"""Analysts at Morgan Stanley took a look at pub group Greene King on Friday, saying the firm's decision to support its dividend meant it was time to "Greene light" an upgrade for the brewer and landlord's shares.
Morgan Stanley upgraded to 'overweight' from 'equal-weight' and upped its price target to 640p from 610p."""
Ah canna tek any mehr cap'n,,,in a Scottish dialect..
So I doubled up today....my avg. SP now £5.83.
I'm bu*****d if I can suss the SP at all - so shorters have an impact...OK...SP down loads more than the 8% !!
Is UK going to hell in a handbasket ?
Me thinks not... Brexit will be as soft as a warm marshmallows squishy bits IMHO.
Was there a profit warning I missed ? EPS still covers divi right ?
OS Hen and Abbot still tasted about the same last time I quaffed.
I'm either a numpty or a genius....will confirm ~ April/May 2019..
Disappointing and frustrating market and shame on the shorters..I originally bought these around 2010 at about 430p,so nearly the same price after 8 odd years......at least I've been collecting the divis and vouchers along the way too but I also topped up a lot higher up than this. No crystallising losses for me though, holding on grimly for next few years!
I see the % on loan is significantly higher for many companies than the short positions reported in short-tracker, a few examples
OCADO GROUP ORD 25.73
SKY PLC ORD 50P 23.72
DEBENHAMS ORD 21.35
BOOKER GRP PLC 1P 20.14
Maybe as you suggest this reflects short positions of less than 0.5% which are not reportable, but as this site seems to accesses the loans data through through crest it picks up all loans. I don't know if there is any other reason to loan out a stock other than for selling short?
I see a couple are reported as over 100%, and ARRIS INTL COM CDI 715.98 !
That could be an error but I guess in theory the shares could in theory be loaned sold short and the buyer then loans the stock on - but seems pretty extreme!
It looks like it could be very useful, not really worked out what for, but maybe comparing a newly released data set with the previous month would flag up any companies with big change in stocks on loan, not so easy to do on Short-tracker which anyway seems to be only part of the picture.
Why so short on GNK?- presumably they think it will decline further, recent results were poor, many concerns like economy faltering, retail spending fall, input costs rising, quality issues, business rate increases, minimum wage impacts etc. That's either in the price or there is further to fall, take your pick
The short positions have been growing steadily over the last 12 months from 0.51% to 7.8% (that only includes positions of 0.5% or more so total could be higher), that is getting to a worrying level. (Link below)
That said in 2014/15 there was an even more rapid run up in short positions to over 13% which were closed very rapidly in June 15 after the Spirit deal was announced. The SP went on to make new high of 950p in late 15, since when the SP has been in consistent decline. The interesting question is whether the shorters made a mistake to take out shorts in 2014/15 (which might give some encouragement to holders of long positions looking at the current short positions) or was the mistake to close them?
For either perspective it would seem that the spirit acquisition has not given GNK the boost which it seems was expected by long and short holders.
I only invest long, never shorts, same with drinks, too easy to get hammered.
Article in S Times points out a large number of short positions on GNK but of more interest is (maybe common knowledge) the shorttracker website where you can see exactly what shares are most shorted. New to me anyway, quite interesting
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