Good info. When Marston's announced the purchase of Charles Wells I was sceptical because I thought it was an old brewery that probably needed a lot of investment. I didn't realise that it was fairly large and modern.
The market isn't convinced with Marston's at the moment so lets hope that the directors plans for the business will be innovative.
Buy the way, you mentioned the bottling line. Its good to have capacity ready for expansion etc but regarding contract work, I used to work in a bottling plant and we did contract work and there wasn't much money in it.
Last November I went on a tour of the Charles Wells Brewery now owned by Marstons. It is huge - seemed much bigger than Fullers (not as big as Greene King) and very modern. I was expecting something down home and quaint. Not so. It was probably built on that scale to brew Red Stripe and when Wells lost the brewing contract in 2014 the plant was possibly too big for them, though they did try to run other brews through the plant eg. Youngs. I thought that more could have been done to maximise revenue. They have a bottling line which was not running at the time of our visit - 'do you do contract bottling?' said I. 'No' they said. Well why not use such an asset to generate more cash, I thought. The reason for this story is that I think that if Marstons can get that plant running to something like full capacity they could do very well indeed.
I am a long distance walker and we sometimes fetch up at a Marston's Pub. It is a good day when that happens - good beer, value for money food. So, everything being equal I might invest some of next year's ISA allowance in Marstons.
regretfully, i think in MARS case it is a vanity or ego trip. For Eons MARS have been accumulating breweries and real ale "brands".....all for what? The lowest profit margins in the group.
I accept that when Charles Wells is integrated the margins will head back towards the previous years, but this is still half the next lowest return . Still can't see the logic in investing in the division with the lowest return.
Makes you question why anyone bothers brewing in the first place?
I imagine brewing is a health and safety nightmare (not that it is especially "dangerous", it's just anything involving making stuff is a pain), requiring expensive plant, equipment and buildings, fluctuating and hard to predict raw material costs, product quality issues, sky-high energy costs, environmental/licensing/LA issues and difficulties recruiting, training and retaining the necessary personnel.
I wonder if brewing is done purely as a "tradition" or maybe just a vanity trip?
" Always good to have an interest in a product as well"
However, I am not convinced that it necessarily helps. Just think of how many posts on here go on about Marston's being here there and everywhere....loads of lorries on the roads etc etc. If we get too attached to the product it is very easy to lose sight of the investment. If I buy more or sell out, it won't change how much beer I buy or where I drink it. MARS is a separate agenda from my drinking habits.
The product is EXCELLENT.....as is the potential (that's why I am a shareholder....still) but we shouldn't lose sight of the fact that brewing provided less than a quarter of revenue and less than one eighth of profits yet it seems to occupy nine tenths of peoples perceptions of how well MARS is doing.
I DO wish people would take note of the company figures.....there seems to be aching about noting there were lots of Marstons beers available.
In the last FY.....Brewing turnover increased in round figures from £193m to £253m a rise of nearly 31% yet profits rose from £23.2 to £25.5m (just under 10%) and margin FELL 1.9% and is less than half the margin on the next lowest division.
The number of people on this board who believe that MARS is all about brewing and the profits from it is very disappointing....it is the least profitable of the 4 groups.
Perhaps this is why MARS is not shooting the lights out....we expand our wet capability and reduce the margin! Great business sense.
Think we all agree but I too have not heard of grumblings on this topic. About the weather, surely with the new outlets from the Charles Wells brands being more southerly it should have offset the Northern downturn due to weather. I went to a racecourse just before Christmas and I was impressed by all the range Marstons now have to offer. I knew it of course but seeing this brings it home.
I understand where you are coming from, Pie-Eater and as a relatively new investor in Marston's My holding is somewhat underwater.
I invested with an eye on the dividend income, but have been underwhelmed by the SP performance.
Ralph has been a board member since 1996 and by doing a minimum of research, it appears he has been very well remunerated along the way. No problem with that as long as us investors are rewarded as well. Don't think we are and whilst it is a tough time for the sector, I do believe an injection of fresh blood to the board may be required to move this company away from its apparent sloth.
I am a tad surprised there have been no public rumblings of discontent....unless Ihave missed something.
Competent yes, but I think we deserve more.
I am not stipulating any specific name....what I want is for the BoD, and RF in particular (or a replacement if he can't) to actually provide some enthusiasm, drive and get up and go. When I see his comments all I get is a "more or the same" feeling, it'll be alright in the end scenario....as I have previously commented. He does not strike me as someone who is "driven", but rather, "competent?" When did he REALLY last enthuse you? (If it was recently then with due respect you are more easily enthused than me )
When you look at successful companies you generally see a motivator at or near the top, someone who can bring about change.
Luke Johnson at Patisserie Valerie amongst other directorates and Carolyn McCall at ITV who are reasonable examples (though don't necessarily have the relevant experience for MARS and probably wouldn't even look at MARS)
The point is, I just don't want this company to drift or go through the motions when it has such potential. There is very little in normal life (beyond the obvious of human suffering etc)that frustrates me more than wasting potential .
I did phrase it specifically to say SP and not TR......
If you are drawing that income and not re-investing in a decreasing SP, what is the benefit? At some point the question of re-basing the dividend appears, and in MARS case, the confirmation of said dividend was the reason for the rally in the price recently.
If I was going to base it on TR then, for example another of my holdings - YNGA - only yields about 1.3% but over the same period has returned DOUBLE what MARS has, and has the added benefit of potential BPR at 40%
Even if you did re-invest in MARS as you suggest, the figures still don't stack up in MARS favour. It will probably take those few more years you quote before you have the chance to cash in with MARS and be up unless there is a shake up at the top of MARS.
IMHO, the potential and even the plan are there at MARS, which is why I have held on for so long, we just need someone to DRIVE it, and I do mean DRIVE, not amble through it.
"Lets not forget that in addition to the SP loss since 2012 in my case,"
It's some comfort at times to add up the dividends received. and with compound interest you'll find you're up. I really don't care too much if the share price stays lower if it means I can reinvest dividends at a sale price. Of course at some point I'll want them up - just before I cash in, but fingers crossed a few more years.
I appreciate your objectives.....I've only been in this for use short of 6 years...and am in the red on an SP basis.
Lets not forget that in addition to the SP loss since 2012 in my case, I also pointed out in Nv that it was down 25% over 3 years and 10% over one, when comparators were doing better (I think I quoted 100% up over 3 years for YNGA which is only a loose comparator and which I also hold)
Could someone please do Ralph's job for him, and let me know EXACTLY what is different now that is going to make this transformation and why it has not already been factored into the price?
As I posted in December, one of the NE pubs was so packed during the week we had to go elsewhere to even get a drink - which wasn't the case in recent years, yet we are still only +1.1% with a £1m bad weather hit!
Drop NOT overdone....I am quite surprised how lightly we seem to be getting away with it.
To quote my "Dear Friend" RF
Like-for-like sales in the period, excluding the impact of the two snow-affected weeks, are up 1.1%. The weather impact on like-for like sales was around 2%, and on an unadjusted basis like-for-like sales were down 0.9% in the period. We estimate the profit impact of this to be £1 million.
So, we ave a £1m hit because of the weather.....(I can live with that given that good weather in "summer" gives us more profit)...but just take note....
Like-for-like sales in the period, excluding the impact of the two snow-affected weeks, are up 1.1%.....So we have taken OUT the £1m weather hit and we still only grow 1.1% ????
Trading update for the 16 weeks to 20 January 2018
RNS Number : 5903C
23 January 2018
23 January 2018
Trading update for the 16 week period to 20 January 2018
Marston's PLC issues the following trading update for the 16 week period to 20 January 2018 ahead of the Annual General Meeting to be held at noon today.
Trading summary: We continued to make progress in the period with growth in both sales and underlying earnings, helped by the acquisition of the Charles Wells Brewing Business in May 2017 and the contribution from the 19 new-build pubs in financial year 2017.
Snow and icy weather towards the end of the period, both in early December and between Christmas and New Year, caused some unavoidable disruption to the business.
Destination and Premium: Total sales for the period are up 4.9% reflecting the contribution from the estate expansion in 2017. Like-for-like sales in the period, excluding the impact of the two snow-affected weeks, are up 1.1%. The weather impact on like-for like sales was around 2%, and on an unadjusted basis like-for-like sales were down 0.9% in the period. We estimate the profit impact of this to be £1 million.
We continue to maintain a disciplined approach to operating margins without recourse to the significant discounting which has remained prevalent in the sector. Margins remain in line with expectations and are slightly below last year reflecting cost increases as previously guided. There are no changes to the cost guidance previously provided in November 2017.
Taverns: Like-for-like sales for the period are up 2.6% benefiting from the performance of franchise-style agreements and an improved drinks range.
Leased: Our leased estate has performed well, with profit growth in the period estimated to be 2%.
Brewing: Marston's Beer Company has achieved good growth in the period to date, with own-brewed volumes up 33%. In addition to the acquisition of Charles Wells Brewing Business ("CWBB") we are benefiting from distribution gains achieved in 2017 and a stronger brand portfolio well represented in the premium ale, craft beer and 'world beer' segments of the market. We remain on-track to achieve the targeted synergies from the acquisition.
New-build developments: We remain on target to open 15 pub restaurants and bars and six lodges this year. We have opened three pub-restaurants and two lodges in the year to date, including a 104 bed lodge in Ebbsfleet.
Ralph Findlay, Chief Executive Officer, commented: "We are pleased with our progress, which included record total retail sales in our pubs of £4 million on Christmas Day - 5.4% higher than last year. We continue to achieve growth against tough market conditions and are benefiting from investment in both pubs and brewing. We look forward to continuing to provide our customers with a great pub experience and excellent service, as well as delivering value for shareholders, over the year ahead."
MARS having now received the dreaded 'IC curse' I can't pretend I'm that comfortable about that. It would explain why the shares rose this past few days as PI's pile in, in which case they'll just retreat again back to 110 -113 in the next week or so.
However disregarding the 'IC curse' the sp has bounced above its 50 day MA, which is encouraging. It 's also now about to challenge the 200 day MA and even if it pokes through that, a 2 year history shows that it doesn't stay above both MAs for that long. But of course the last 2 years have been a bear market for MARS, so that would make sense. The upturn in the 50 day MA has been seen before in this period, but it didn't last long. So this next couple of weeks will tell us whether there is a genuine new uptrend (not in the last 2 years) but we'll see.
One of ICs 8 tips of the year...
Marstons shares have been hit hard and, according to Bloomberg data, now trade at a multiple of forecast earnings that is in the bottom 15 per cent of the 10-year range (a period that includes the financial crisis), while offering a yield in the top 15 per cent. We feel the companys investments in its destination and premium estate, as well as the recent Charles Wells acquisition, put it in a good position. While debt levels are high, unless there is a further marked deterioration in trading, we think the yield on offer is the real deal. If confidence builds, there should be good scope for a re-rating of the shares. Buy.
Last IC View: Buy, 114.3p, 30 Nov 2017
The question is why does the market hate it? If "Mr Market" is like me then it probably isn't about MARS plans or even necessarily actions, it is about perceptions and how there appears to be very little positivity in communications from the leadership. IF, the leaders were more dynamic and enthusiastic, and gave off more positive vibes then I suspect the perception would change. I'm not even sure the results were better than expected...I was a touch underwhelmed. The reason for the "Bounce" was confirmation the dividend was not under immediate threat despite market speculation. Simple as that.
All I feel when I see the comments, especially from RF, is more of the same, staid, almost drudgery. There aint any "get up and go!"
All IMHO of course, and actually hope to be proven wrong.......
Despite the recent better-than-expected results, it's looking like the market isn't that impressed after all. After spending a few days above the 200 ma the sp has fallen back now starting to threaten the 50 day ma. This has all the feel of a dead-cat bounce. If it fails to hold 110 we could well be looking for a further drop back to recent lows of 100-102.
This is one of those numerous shares that the market loves to hate, so buying for any decent capital gains are a rarity as the terrible performance against the FTSE All Share indicates. Buy for income only.
I live 10 miles distance from 3 Marstons, 1 new one in Diss, 1 new one in Norwich and 1 old one, also in Norwich. When I have been to the one in Diss, it is never busy. The two in Norwich do good business, particularly the old one which I eat in every Sunday evening. Food is good and the staff are friendly and seem to remember the regulars. Some days, it's hard to get a table unless you get there early. So, all in all, a mixed bag. Personally, I think the Diss one is too big for the catchment area and there are a couple of other good gastro pubs already in the town.
I have been in 3 marston refurbs over the last 6 months 2 out of 3 are performing well, if you look at the family element attending, the beers are good, the food i have had in 2 is excellent and a novel meal is the Roast chicken which is spit roasted in front of you, one of my reasons for a look at the share initially was visiting a pub, this and as you mentioned you get the shareholder card which at 20% off for all food is good value better than the dividend haha, Although the share price its dropped back last week, still think its a real winner on food alone and pedigree ale regards
Important message from the Financial Conduct Authority:
Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse.
This could lead to an unlimited fine and up to seven years in prison.
If you have any information, concerns or queries about market abuse, click here.
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.