Greene King

[Changeable]

I find that I have a little surplus cash on my trading account, enough to make a purchase of half a unit of something new, so I have been looking around...

Questor, in the Week End Telegraph, has made a review of the "sector's most attractive (pub) stocks."

https://www.telegraph.co.uk/business/20 ... rm-greene/

I hold Diageo, but no pub stocks.

A quick check shows that the company's growth has been lackluster for the last years, it trades in a very competitive sector, but the dividend seems secure.

I didn't check the financials in detail yet, but the company claim to target a dividend cover of 2. Unfortunately there is a dept of 750m and I ask myself how will that effect the dividend if / when interest rates increase?

I haven't seen anything on the boards recently about Green King. In the time I seem to remember people pairing them together with Marston's. (?)

Green King has a market cap of 1.5bn. With the share price of 481p it has a dividend of 6.9% as of last Friday.

Any comments, negative and positive welcome!

Moderator Message:
Spelling mistake corrected in subject line -- MDW1954

[Ricksure]

Found this on Digital Look .....

By Oliver Haill

Date: Tuesday 17 Jul 2018

LONDON (ShareCast) - (Sharecast News) - Shares in Greene King were sent lower on Tuesday as Berenberg reiterated its view that the pub company was an investment "value trap", with underlying trading remaining poor and profit "likely to go backwards again" in 2018.
Analysts at the German bank, repeating their 'sell' recommendation on the shares and 430p target price, said management's debt refinancing "appears to be destroying shareholder value in order to flatter the P&L".

[monabri]

You don't have to go back too far on this board to find discussions on Greene King.

viewtopic.php?f=15&t=12706&hilit=greene#p153036

and

viewtopic.php?f=15&t=12387&p=149859&hilit=greene#p149859


Shorting level has halved since April 18 (but still over 5%)

https://shorttracker.co.uk/company/GB00B0HZP136/

[scrumpyjack]

Greene King

Always takes 2 views to make a market and the alternative view is that the current SP already over discounts their problems. They have a large number of pubs and can close the ones that are trading badly. Rooney Anand, the CEO, is generally respected as a very competent businessman.

GNK have made some mistakes - part of their recent troubles apparently have been due to concentrating too much on food sales when recently 'wet led' pubs have been doing better.

They are a survivor and historically have come through pub industry problems much better than most of their competitors.

Personally I wouldn't sell at the current very depressed price, but I've got enough so I won't buy any more - they are still more than double my buying cost so aversion to CGT is another reason not to sell!

[OLTB]

I also hold and the main reason I may not top up any further (they are still approx average value of my HYP as a whole) is that GNK have held both their Interim and Final dividends rather than increased them. I am aware that BP, RDSB, HSBC and GSK have also made similar decisions but I can't have too many holdings doing that!

Cheers, OLTB.

[Arborbridge]

I didn't check the financials in detail yet, but the company claim to target a dividend cover of 2. Unfortunately there is a dept of 750m and I ask myself how will that effect the dividend if / when interest rates increase?



Green King has a market cap of 1.5bn. With the share price of 481p it has a dividend of 6.9% as of last Friday.

Any comments, negative and positive welcome!

Debt and gearing have always been high with Greene King - and my investment goes back several decades. I came to the conclusiong that it goes with the territory, since they've always progressed by borrowing money to buy up distressed pub groups in that time.

Naturally, it could go horribly wrong, but as regards the debt - they had a similar gearing when interests rates were far higher, so I suggest they will survive and thrive. I hadn't realised the market cap had grown so much - it's about three times bigger than I thought! At one time they were "marginal" in size for a HYP company, but no more.

I'm adding occasionally over the years, within my normal holding restraints and now they are beginning to come onto my radar again. Having said all the above, I must same I'm concerned about the long term deterioration of the share price which suggested all is not as rosie as previously. However, in contrast to that, shorting has more than halved which has to be a good sign - maybe it marks the beginning of the end of the downward trend.

Arb.

[Changeable]

monabri
Somehow I had missed the links when I searched for past posts... (?)

Still undecided, but thanks for all the feedback !

Changeable