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
Called in yesterday about 2.30pm and was VERY disappointed - which was actually great news.
This is the only Marstons I can realistically get to for a lunch to use their card, either historically when collecting son from Durham Uni, or now daughter from Newcastle Uni.
The place was PACKED, an hour wait for food and also a reasonable wait for drinks. It couldn't have been busier if everything was free! Staff really apologetic but as we were in transit, that wasn't an option but really pleased to see this as.....
a) obviously good for shareholders if so packed, even if a busy time of year, as raises expectations for other outlets
b) for the landlord and staff. we have been there numerous times and ALWAYS received good service and a great welcome (and have commented to H/O about that fact....that's why it's our go-to stop for lunch. This just confirms what a good job they are doing.
An extremely good overview of the brewing trade, financial aspect, and fuller insight, i find your writing on the subject full of information and to the point please accept my appreciation for your comment and post regards
Possibly, but the issue is not those for whom a Friday (or Saturday) night out or Sunday lunch is the regular occurrence. It is for those who are "strangers" and not the core 50, 60, 70% or whatever that figure is. The more people who see a nice summers evening and say lets go to the pub for a meal / drink for a change, the better. The converse is those who say, actually, it's a bit tight this month and we are at "Dave and Jane's" next week, lets give it a miss.
The core people, possibly like yourself (?) will have that factored into your lifestyle and that group of people will basically cover MARS costs. The profit effectively comes from those discretionary visits.
When I first moved into the retail sector a manager of a small outlet said something which has stuck with me....we only make a profit on the final 10% of sales at Christmas.....so emphasising the need to have core trading cover the costs.
There is some evidence that when recession kicks in, historically more working class people will migrate to the pubs for a relief from the mundane and depression - e.g.dropping the match, cinema and meals out as the cost was less for a pint or two....however I am not totally sure that is where MARS is aiming...certainly not with its establishments near us....it is slightly more aspirational(?) and it is those people who may draw their horns in.
Ultimately I DO believe there is a fairly bright future for MARS but am definitely not impressed at the moment with operational performance and especially leadership and as a consequently share price......lets not forget that the share price is LESS now than it was FIVE years ago and markets (and majority of competitors?... YNGA which I also hold) have risen significantly over that time.
more than happy to be proven wrong and the SP to double
Ive just bought into these and seen a rise, as has been said less money in the pocket might be forthcoming. Been through many a downturn, and i've seen a few, it has never stopped a bit of sociability and entertainment being needed, if you listened to IC and a few other financial rag bulletins we would all be stuck in watching strictly or some other dross on a Saturday night, life my fellow posters does not work out with total abstinence of fun and no headache the next day. therefore on the analogy of poor beer sales, it must follow that with paracetamol not needed a collapse of pharmaceutical shares will follow behind beer and entertainment share , regards
Ps wait and see
Inflation unexpectedly up, so drawing future interest rate rises into focus so giving a double whammy leading to less disposable income....add that to the glut of options for eating out and margins / footfall comes under pressure....which was also highlighted in last weeks IC articles on the pubs sector.....Greene King, MARS, etc
That has been one of the key reasons for my caution combined with Ralph's outstanding "positivity" .....NOT
"Marstons PLC (LSE:MARS)The current meteor shower (think it is The Haemorrhoids) reminded just how bright Mars shines in the current dark winter sky. It also served to remind us to update our outlook against LSE:MARS:Marstons share price as we ..."
" MARSTONS PLC (LSE:MARS) The current meteor shower (think it is The Haemorrhoids) reminded just how bright Mars shines in the current dark winter sky. It also served to remind us to update our outlook against Marstons share price as we last ..."
Hello PIE-EATER;Apologies for delay in getting back to you giving details of historic share splits @ Marstons but I had to consult my written records.There were two events that in large measure caused the fall in dividend from 47.5p in 2006 to the last full year of 7.3p.Although I am not suggesting that share performance has been other than dire over the years even when these factors have been taken into account.
The first was a 4 for 1 share split on 08/01/2007 when Wolverhampton & Dudley Breweries PLC changed its name to Marston's PLC.The second was a highly dilutive "financial crisis" rights issue on 22/07/2009 @ 59p when 11 new shares for every 10 were issued.
The following was posted by Fangorn2 on ADVFN (unclear which comapany prepared it), it gives a good picture of the Board thinking and the conclusion is unsurprisingly positive
MARSTONS FY ANALYSTS MEETING: Following the release of its full year numbers earlier today, Marstons hosted a meeting for analysts and our comments are set out below:
The group maintains that this has been a year of continued progress. Marstons highlighted just how much it has changed since the financial crisis.
It has sold bad pubs and built good ones.
Trading has been solid & MARS has achieved sales growth without resorting to discounting Wet sales are outperforming food sales at the moment. Wet sales are level (prices are up) but food sales are down in volume terms.
The level of discounting has increased markedly recently. Marstons is not taking part. This refusal to discount is helping margins but means that LfL sales are being held back a little.
Brewing has had an outstanding year. The division has a proven acquisition ability. Further expansion in this area would not come as a surprise.
MARS has virtually no retail park exposure.
The number of MRO requests has been insignificant.
Scottish minimum pricing should be either neutral or marginally beneficial. Outlook:
The group knows where its growth is coming from. It will fully incorporate Charles Wells and this year will see a full year contribution from the nine pubs purchased in FY17 and from the 19 that the company has built.
Lodges in particular can take 2yrs to build to maturity. The group can add 5-10 units per annum going forward
There is plenty of growth away from hotspots. It is expanding into the latter space that has caused problems for a number of casual diners.
In the current uncertain market, the group is slowing its opening programme though it still expects to open 15 pubs and 6 lodges in the current year Costs are largely controlled for FY18. This contrasts with comments made by a number of other companies recently.
Balance sheet & cash flow:
Marstons securitisation does not need any near term attention and fixed charge cover has been maintained at 2.6x
The group does not want to over-service this debt structure. Some 45% of group EBITDA comes from outside the securitisation.
Conclusion & Outlook:
Marstons CEO Ralph Findlay pointed out that the group is 94% freehold, has LTV debt of only 56% and has a net asset value of 147p per share.
Whilst impacted by the wider economy, the company will achieve growth this year on the back of a full year contribution from Charles Wells, the new build pubs completed in FY17 and the assets purchased in the last financial year Langton Comment:
Marstons numbers have pleased the market and the groups assertion that it is at least to some extent the master of its own destiny has been similarly well-received.
Christmas will be important. It always is but, to some extent, just how trade settles down into 2018 could have an even more material impact on how MARS and its peers are viewed by the market.
Because, with the groups shares little higher than they were at the heights of the financial crisis 10yrs ago, a material slowdown is arguably being factored in. And this may happen but, at the moment, there are few signs that the consumer is willing to turn his/her back on the affordable treats that, at the end of the day, may be said to make life worth living. Selling what the public wants, from well-maintained (and preferably freehold) units and at acceptable prices, is likely to remain the key to success.
Even after this mornings bounce, Marstons shares trade at only around 8x earnings and, though there are wider economic concerns regarding the consumer, the shares would appear to offer good value at these levels.
Just got back and yes the Mr Market does like todays RNS......quite simply because divi not cut and decent cover....nothing else really new.
As others have said there may well be loads of lorries shifting beer, but if the price is the same as 2-3 years ago, somebody's margins have been hammered. That is reflected in the small uplift on the bottom line....pain shared with retailers?
If MARS can push through price increases on top of wet volume increases next year then things will be far more rosy but unfortunately over the last 12 months or so Ralph hasn't inspired me and this isn't the first or second time I have said that.
Todays price rise is what I said we needed when the pre-results statement was released. Now we need to hang on to it and gradually build from here. Another broken record, I know, but Christmas WILL be key.
At first glance, a decent performance under a fairly difficult trading environment and , at the time of posting, it is good to see a positive market reaction on my 'underwater(beer?)' investment.
Not had chance to fully digest statement as heading out for a bit of higher level walking around the Howgills or Yorkshire three peaks - yes, as a Lancastrian I have had my vaccination
The key points for me are minuscule divi increase, presumably to try and head off those commentators in the press who are questioning whether a divi cut was looming (not too sure with 1.9x cover if memory serves), and also the generally FLAT figures, especially when compared to YNGA as I did a couple of weeks ago.
I know people are going to comment about the investment which has rightly taken place but if the economy is really slowing and there is less disposable income, the MARS WILL be hit. Apart from bottled beer volumes and not necessarily profit, where is the growth in the bottom line coming from?
I will review the statement again later today / tomorrow but will be interested to see other peoples thoughts on any "REAL positivity" within the statement (not Ralph just window dressing), and also the market reaction.
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