Marston's Interims.

[Breelander]

I'm sure MARS was once a 350 member and market cap has slipped down and out of the index?

Looks like it's on its way back up. It is ranked 326th in the FTAS. With a current market cap of £719.8m MARS is sitting on the threshold of automatic promotion to the FT250. Looks likely to rejoin the FT250 at the next review in June.

FTSE All-Share Index Ranking (unofficial guide) As at close on Fri, 17 May 2019

http://www.stockchallenge.co.uk/ftse.php

[Dod101]

Coming back to the investment case, yet another held dividend. It may be that in the longer term Marston's turns out to be a good investment but in the meantime for those who are living off their dividends (and that is the idea of a HYP) the age of austerity is still with us. Furthermore, a held dividend very often means a share price going nowhere. It sometimes gives a trading opportunity as the price meanders around but that is usually about it.

I do not hold.

Dod

Hi Dod,

I don't follow the logic here. Are you suggesting that as Marston's is holding their dividend, then people who are living off their dividends would do better elsewhere? I can't see many alternative shares with a 7% yield who are widely regarded as companies which will have sustained dividend growth into the future. If you sacrifice MARS for a company with the average dividend yield and perhaps a better regarded future then I think anyone living off their dividends may have an awfully long time to wait to catch up and in the mean time you really would be entering into the "age of austerity".

As I said I do not hold it and so I see if it differently from someone who does hold it. If I were holding it I would keep it I suppose but would be very unhappy at yet another held dividend irrespective of the yield (which, if I held it, I would be enjoying and got used to, even if that had meant that the share price had dropped back.) I would not currently buy it now, because problems seldom come singly and as has been said the debt has not suddenly disappeared. It is not an ideal HYP candidate with its high debt and held dividend, joining Glaxo, HSBC, Shell, BT and probably others, all, in their day, HYP stalwarts and still held by many/most HYP portfolios I have no doubt. A high and growing dividend we are looking for!

Dod

[IanTHughes]

It [Marstons PLC (MARS)] is not an ideal HYP candidate with its high debt and held dividend, joining Glaxo, HSBC, Shell, BT and probably others, all, in their day, HYP stalwarts and still held by many/most HYP portfolios I have no doubt. A high and growing dividend we are looking for!

My portfolio contains all of the above shares except for GlaxoSmithKline (GSK). The Dividend per Unit is currently forecast to rise by about 10% this calendar year, thanks entirely to following the HYP Strategy. I am not sure what Investing Strategy you follow but, if you are seriously looking for a high and growing dividend, you should at least check out the HYP Strategy, you might be pleasantly surprised.


Ian

[Gan020]

I'm sure MARS was once a 350 member and market cap has slipped down and out of the index?

Looks like it's on its way back up. It is ranked 326th in the FTAS. With a current market cap of £719.8m MARS is sitting on the threshold of automatic promotion to the FT250. Looks likely to rejoin the FT250 at the next review in June.

FTSE All-Share Index Ranking (unofficial guide) As at close on Fri, 17 May 2019

http://www.stockchallenge.co.uk/ftse.php

I have my fingers crossed it will get promoted. The next review is 5th June and MARS goes XD tomorrow for 2.7p so it's going to be close.

[tjh290633]

FWIW, I had a nice meal yesterday in a relatively new Marston's pub, the Conqueror's March in Hastings, just off the Ridge.

It confimrs my feeling that they are worth holding on to.

TJH

[IanTHughes]

I'm sure MARS was once a 350 member and market cap has slipped down and out of the index?

Looks like it's on its way back up. It is ranked 326th in the FTAS. With a current market cap of £719.8m MARS is sitting on the threshold of automatic promotion to the FT250. Looks likely to rejoin the FT250 at the next review in June.

FTSE All-Share Index Ranking (unofficial guide) As at close on Fri, 17 May 2019

http://www.stockchallenge.co.uk/ftse.php

I have my fingers crossed it will get promoted.

Just curious but can I ask why? Why is the promotion of Marston's (MARS) to the FTSE250 so important to you?


Ian

[Breelander]

Just curious but can I ask why? Why is the promotion of Marston's (MARS) to the FTSE250 so important to you?

It's not to me. I don't hold (or plan to). But Kempiejon had suggested MARS was below HYP Practical guidelines for a top up as it was not in the FT350.

[Gan020]

Just curious but can I ask why? Why is the promotion of Marston's (MARS) to the FTSE250 so important to you?
Ian[/quote]


Take a look at the chart when it got demoted in the May 2018 reshuffle. The selling was exaggerated as trackers had to sell. If it re-enters the opposite will happen and there should be buying which will give an assist to the share price

[IanTHughes]

Just curious but can I ask why? Why is the promotion of Marston's (MARS) to the FTSE250 so important to you?

Take a look at the chart when it got demoted in the May 2018 reshuffle. The selling was exaggerated as trackers had to sell. If it re-enters the opposite will happen and there should be buying which will give an assist to the share price

Ah, I see. You are looking for capital appreciation? Why?

I am still building my HYP Income Stream so would rather the price of MARS dropped until such a time as I had a full holding, after when I will not care where the price goes. Each to their own I guess


Ian

[kempiejon]

I am still building my HYP Income Stream so would rather the price of MARS dropped until such a time as I had a full holding.


Ian

One fly in the ointment for a growing income stream is that we now know that MARS made that recent commitment to a held dividend, still nigh on 7% yield is probably above most HYPers average and of course buying more of any income stock will increase ones income stream.

[IanTHughes]

I am still building my HYP Income Stream so would rather the price of MARS dropped until such a time as I had a full holding.

One fly in the ointment for a growing income stream is that we now know that MARS made that recent commitment to a held dividend, still nigh on 7% yield is probably above most HYPers average and of course buying more of any income stock will increase ones income stream.

Well yes, the dividend is on hold while debt is paid off. As I said earlier in this thread, not such a bad thing in my opinion, especially if it leads to less interest expense being incurred and more cash being available for dividends in the future.

And yes, buying more of any income stock will of course increase one's income stream. But I measure the success or otherwise of my income stream according to the increase or decrease in the Income per Dividend Unit, the number of which increases every time money, including dividends, is paid into the portfolio.


Ian

[idpickering]

Take a look at the chart when it got demoted in the May 2018 reshuffle. The selling was exaggerated as trackers had to sell. If it re-enters the opposite will happen and there should be buying which will give an assist to the share price

With respect, although what you say may well be proved right, HYP is about income, capital gains and losses are immaterial.

Ian.

[Dod101]

It [Marstons PLC (MARS)] is not an ideal HYP candidate with its high debt and held dividend, joining Glaxo, HSBC, Shell, BT and probably others, all, in their day, HYP stalwarts and still held by many/most HYP portfolios I have no doubt. A high and growing dividend we are looking for!

My portfolio contains all of the above shares except for GlaxoSmithKline (GSK). The Dividend per Unit is currently forecast to rise by about 10% this calendar year, thanks entirely to following the HYP Strategy. I am not sure what Investing Strategy you follow but, if you are seriously looking for a high and growing dividend, you should at least check out the HYP Strategy, you might be pleasantly surprised.

I would not be pleasantly (or otherwise) surprised. I was probably familiar with the HYP strategy before you had even started your HYP. I hold all of the mentioned HYP shares, except BT. That is why I am so familiar with the effects of a held dividend.

As to why people are concerned about capital; it is because without capital you will not have a HYP or any other investment strategy. I am often sympathetic to the views of the other Ian, IDP, but I disagree with his latest post. I do not think that capital gains or losses are immaterial; in fact they are highly relevant to any investment strategy

[IanTHughes]

It [Marstons PLC (MARS)] is not an ideal HYP candidate with its high debt and held dividend, joining Glaxo, HSBC, Shell, BT and probably others, all, in their day, HYP stalwarts and still held by many/most HYP portfolios I have no doubt. A high and growing dividend we are looking for!

My portfolio contains all of the above shares except for GlaxoSmithKline (GSK). The Dividend per Unit is currently forecast to rise by about 10% this calendar year, thanks entirely to following the HYP Strategy. I am not sure what Investing Strategy you follow but, if you are seriously looking for a high and growing dividend, you should at least check out the HYP Strategy, you might be pleasantly surprised.

As to why people are concerned about capital; it is because without capital you will not have a HYP or any other investment strategy.

Completely incorrect, in my view.

It is increased earnings that should lead to increased Dividend which in turn will lead, sooner or later, to an increased Capital value. It does not occur the other way around as you seem to believe

I am often sympathetic to the views of the other Ian, IDP, but I disagree with his latest post. I do not think that capital gains or losses are immaterial; in fact they are highly relevant to any investment strategy

Wrong again. The Capital value of an HYP is irrelevant simply because the HYP Strategy does not envisage ever selling to realise that value.

I do hope that the above corrections will help in your understanding the HYP Strategy which I do know can be confusing for some investors who, like yourself, are fixated on Capital value and not Income


Ian

[MDW1954]

It [Marstons PLC (MARS)] is not an ideal HYP candidate with its high debt and held dividend, joining Glaxo, HSBC, Shell, BT and probably others, all, in their day, HYP stalwarts and still held by many/most HYP portfolios I have no doubt. A high and growing dividend we are looking for!

My portfolio contains all of the above shares except for GlaxoSmithKline (GSK). The Dividend per Unit is currently forecast to rise by about 10% this calendar year, thanks entirely to following the HYP Strategy. I am not sure what Investing Strategy you follow but, if you are seriously looking for a high and growing dividend, you should at least check out the HYP Strategy, you might be pleasantly surprised.


Ian

We keep hearing mentions of Marston's debt. Early last year, I wrote this, for an investment publication:

Since 2014, Marston's has grown its revenues by 26%, its earnings per share by 21%, and its dividend by 12%. For a company operating in a sector that the stockmarket assumes to be in terminal decline, those numbers appear fairly reassuring. (2014's pre-tax loss, by the way, was due to non-underlying mainly non-cash factors related to pub disposals, exiting onerous leases, and repurchasing securitised loan notes.)

The fly in the ointment is the high level of debt, amounting to £1.3bn. But here, it is hardly unique in the sector, with a far lower level of long-term debt than -- say -- Mitchells & Butlers.

However, £300 million of that £1.3bn debt is 'sale and leaseback' lease financing, where the freehold reverts to Marston's at nil cost at the end of the lease period. Unlike a traditional sale and leaseback, the associated liability is recognised as debt on the balance sheet due to the reversion of the freehold.

For the period ended 30 September 2017 the ratio of net debt before lease financing to underlying EBITDA was 4.8 times, the same as the previous year. Marston's has a stated aim of reducing this ratio, but by growing EBITDA, rather than reducing debt.

Obviously, the board is now less sanguine about debt than it was. I regard this as a positive. So, it seems, does the market.

MDW1954

[miner1000]

Wrong again. The Capital value of an HYP is irrelevant simply because the HYP Strategy does not envisage ever selling to realise that value.

I do hope that the above corrections will help in your understanding the HYP Strategy which I do know can be confusing for some investors who, like yourself, are fixated on Capital value and not Income

I do not believe Dod needs any help in understanding the HYP strategy. His contributions to this board are generally well considered and represent his opinion which differs from some others.

And clearly some investors do envisage selling, as we have seen this week with at least two respected HYP followers selling their shares in SSE.

Petty sniping is becoming rather too regular on this board and is unhelpful.

[idpickering]

Wrong again. The Capital value of an HYP is irrelevant simply because the HYP Strategy does not envisage ever selling to realise that value.

I do hope that the above corrections will help in your understanding the HYP Strategy which I do know can be confusing for some investors who, like yourself, are fixated on Capital value and not Income

I do not believe Dod needs any help in understanding the HYP strategy. His contributions to this board are generally well considered and represent his opinion which differs from some others.

And clearly some investors do envisage selling, as we have seen this week with at least two respected HYP followers selling their shares in SSE.

Petty sniping is becoming rather too regular on this board and is unhelpful.

I agree regarding Dod not needing an education in all things HYP, he is one of the best, and well informed posters who shares his thoughts here.

With regards to my selling SSE yesterday, that was nothing to do with capital values, but due to the political risk from Corbyn. I still have UU and NG. mind, and topped up the later yesterday.

To get back on topic, I hold MARS, and am happy with that fact thus far.

Ian.