My previous comment on this stack was at 55p, now 46p. I’m sure that management are doing a great job - for the bond holders, but what’s the equity story? Sure, there’s a possibility of a return to divs at the end of 2027 - S&P suggest 2p on 10p earnings, an OK yield, but if you want yield, pick Shepherd&Neame yielding 4.5% NOW, unbiddable for sure given the share structure, but with unprepayable long term debt at MARS, I’m not sure that MARS is biddable either. If you consider that pub cos are essentially in a flat or gently declining industry, then pick Smiths News, yielding 9% with upside from a potential deposit return scheme. OK a huge discount to NAV but is it likely that any break up or consolidation bid will show up? My view not, and the non prepayable debt is a bit of a poison pill.
Anna Barnfather at Panmure has long covered the sector and gives MARS an 80p target. Be that as it may, since I don’t have to invest in everything, I prefer to avoid this sector and its apparently enticing discounts to NAV, given that U.K. customers will continue to be cost of living squeezed, and pub is hit by large cost/tax increases. A pint at £10, fish & chips at £15, forget it. (Figures illustrative).
Nice write-up!
I did a back of the envelope valuation of Marston's last year but ended up finding a higher-upside stock to pile into instead.
A director buying alongside a stabilising chart is worth more to me than any broker target.
You can see Platt's marketing background in how they're picking the conversions too, all data-led rather than gut feel.
https://www.marstonspubs.co.uk/shareholder-vouchers/
It's worth holding 500 for the vouchers. However not all brokers pass the benefit on - HL, II and Halifax do.
Nice write up, but what’s the trade?
My previous comment on this stack was at 55p, now 46p. I’m sure that management are doing a great job - for the bond holders, but what’s the equity story? Sure, there’s a possibility of a return to divs at the end of 2027 - S&P suggest 2p on 10p earnings, an OK yield, but if you want yield, pick Shepherd&Neame yielding 4.5% NOW, unbiddable for sure given the share structure, but with unprepayable long term debt at MARS, I’m not sure that MARS is biddable either. If you consider that pub cos are essentially in a flat or gently declining industry, then pick Smiths News, yielding 9% with upside from a potential deposit return scheme. OK a huge discount to NAV but is it likely that any break up or consolidation bid will show up? My view not, and the non prepayable debt is a bit of a poison pill.
Anna Barnfather at Panmure has long covered the sector and gives MARS an 80p target. Be that as it may, since I don’t have to invest in everything, I prefer to avoid this sector and its apparently enticing discounts to NAV, given that U.K. customers will continue to be cost of living squeezed, and pub is hit by large cost/tax increases. A pint at £10, fish & chips at £15, forget it. (Figures illustrative).
Fuller Smith and Turner, pubs on only 0.5x book value
Stock up 10% on good news today.