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Do8erman - I am still in profit here and will not be selling as I will have to watch my gains for the year. Whats the point anyay if as you have said it is to come back up to 70p? I am not in any rush. In fact if it does go down to 30p I will be buying some more. The only time I have to think about selling any shares is usually in the new year where if I do have any running a loss I can sell them to make the most of any other gains from annual sales. Fortunately this is not one of my largest holdings and I do not have to sell or raise money for income. The way my luck goes if the price was to fall as much as you have said I would not be fast enough to get back in when the price turns if I was to sell any. I will hold and top up as and when required. By the way I read yesterday the European commission were looking into ways and discussing if the time is right for finding a quicker way of fast tracking the Astra-Zeneca Oxbridge vaccine - so we may not be long before a life boat comes along for Europe. Also think about the fund managers they will see any further fall as a good longer term opportunity to buy some more for growth. However good luck with your own choices.
S.C... In the face of 79 Greene King pub closures, 800 job losses, Scotland pub closures and the rest of the UK due to go into some sort of lockdown come next Monday - you are still saying that the SP is going to be 73-100p. Not me, don't misquote me please I haven't said its coming back to 70p, all I said is IF it goes to 28p-32p area then it has potential to recover - to what is unknown, but i'd expect to 45-48p should pubs and restaurants re-open after a lockdown period in the run up to Xmas - but at present its still very risky indeed, especially if covid goes on longer than expected, and pubs and venues stay closed indefinitely from next week. It all depends on your end game/how long you want to sit on these and your risk tolerance I suppose. If I was invested here and in profit, then I'd sell at 40p and get out Thursday, solely because I'm more risk adverse than some and profit is profit and I wouldn't want to risk losing any gains made, especially if I can then use those profits to buy back in lower and increase my holding if I were to still believe in the stocks recovery long term. Out of interest as you are still stating this is going to 73p-100p regardless of all the negative facts stacking up.. when exactly are you forecasting this SP for? next week, next month, next February, 5 years time?.. if you are going to put yourself out there and share your thoughts on where you think the SP is heading (quite specifically - 73p), please tell us all when. You have previously quoted these SP forecasts many times over the past few weeks/months, yet the SP is still struggling to go beyond 40p, and the rest of the week/next week is likely to see this slide further if logic and current sentiment be applied. I may be wrong and overly pessimistic, we'll see I guess. But, I am very interested to see what period of time you are talking about to see an increase of 83% in the SP from Wednesday, to your lower estimate of 73p and an increase of 150% to your 100p higher estimate, surely you have to agree that this sounds overly confident for any share in this sector inc. MARS for the foreseeable future.
Do8erman:
There is logic in what you say.
Can you however explain why you think it will hit the lows of March even though the situation is not as dire? Do you not believe that these concerns are priced in already? If it drops further, I think this may only be slight and very short lived before it reverses. There is far more hope now with COVID seemingly milder and vaccine in the picture and there is the JV element.
The biggest issue here is people in government who think that leadership means sounding sweet. Payback time will come soon and the masses as usual will have to pay for the meal they had.
Astute Investors are aware of the significant headwind the whole hospitailty sector is facing, not just Marstons but each and every Beer House, Motel chain, just read their recent reports. Some are more resilient than others due to low debt levels, foresight to raise funds earlier this year. MAB, Whitbread and Fullers are well placed to pick up distressed pub/motel outlets.
Just over a year ago it was clear MARS debt pile was becoming a concern, hence a virtual fire sale of PUBS to Admiral at a significant discount to Book value. If as seems likely the price Admiral payed was regarded as fair-value, what impact does that have on the Valuation of the retained properties? It is well known Commercial Properties are being re-valued downwards. Against this background it is reasonable to believe our estate is not worth what is currently stated within the accounts. By his very actions RF clearly accepts, otherwise he could be culpable of poor management.
Faced with an unmanageable debt level , clearly the arrival/approach from Carlsberg last November was a God-send, it offered some relief to an over-borrowed position. The JV agreement was thrashed out before the impact of COVID, which has changed the whole hospitality landscape.
It is an illusion to believe the actions of one and probably other, competitors, will add greatly to the benefit of others. It may have a minimal effect which will be spread across other providers not just MARS.
Speculation that the JV and other events stated, will enable MARS to increase staffing levels is pi in the sky. The very purpose of this and any JV agreement is to reduce costs, basically Human resources, which ultimately produces bigger margins.
The JV should be analysed in conjunction with the historic validated numbers and projected returns into the future.
In essence in return for £273m, in total, Marstons and Carlsberg will combine their various Breweries and Distribution facilties in a New Company CMBC ( Carlsberg Marstons Brewing Company). Marstons will retain it s Pubs and Motels.
Marstons will have a 40% share in CMBC, generated profits will be distributed pro rata. Have done the calculations previously and to retain the status quo, profits made by CMBC will need to grow by 22% in the 1st 5 years of the Agreement, for Marstons to just standstill on known values. Marstons Brewery profit growth has never exceeded 3%pa
Marstons intention is to pay down debt with the receipt from Carlsberg. The company then intends to focus on providing operational excellence within the pub and accommodation business ( retained assets). The company intended to spend £90m in the current year on capital items ( enhancements, new build ). The funding of a programme forwards is yet to be fleshed out, it is difficult to see it coming from profits........shareholders could be waiting some time for a return to the dividend list.
Currently the SP is under-pinned by the last published NAV , likely to be downgraded.
Do8erman
Intersting points you make, especially how the 40p level seems to show resistance, something I've noticed myself & interested in.
WRT being misquoted by charger, I fear this is a peril of the board for all of us, he assures us he is still in profit but his post on Sep 9, when he was showing us all the size of his cojones, clearly states that his larger holding cost 41.994p and a smaller holding at just below that.
Happily no other poster bothered to join in this peculiar game but it might explain how these specific price predictions are arrived at.