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Greene King

General discussions about equity high-yield income strategies
ron505
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Greene King

#206587

Postby ron505 » March 9th, 2019, 9:40 am

Anyone got a strong view or any insightful research on this, especially around safety of the dividend please?

Thanks

Ron

Raptor
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Re: Greene King

#206612

Postby Raptor » March 9th, 2019, 10:38 am

Have a read of the thread on HYP Practical. Maybe of help as a starter.

Raptor.

BristolDave
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Re: Greene King

#206625

Postby BristolDave » March 9th, 2019, 12:01 pm

They are one of my star performers having risen by 10% last month on the back of good Christmas trading figures. According to my records the dividend cover is 2.9 but that could be an anomaly in my spreadsheet so please check with your own sources. I have been considering a top up but in my opinion they are a bit toppy at the moment so not sure they are on offer at a good price. The yield is 5.2% by my calculation (my spreadsheet calculates yield based on dividend received against current share price).

Its up to you when you make your purchases and I don't recommend trying to time the market but for GNK I tend to buy when they drop below 600.

David

(edited 9/3 to remove duplicate words phrase. Raptor.)

monabri
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Re: Greene King

#206630

Postby monabri » March 9th, 2019, 12:24 pm

It looks to me as though the Chief Financial Officer has been buying...

8 Mar 2019
https://www.londonstockexchange.com/exc ... 96164.html

and

6 Feb 2019
https://www.londonstockexchange.com/exc ... 70998.html


He's not been in post long (1.1 years).

Here's the divi history - the trend seems to be one of a reducing growth in divi increases over the last few years.



I would say it's a "hold" rather than a definite new buy. Maybe one to come back to when the yield is a little higher (are there any other candidates on your list?).....

starquake
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Re: Greene King

#209039

Postby starquake » March 21st, 2019, 9:59 am

The interesting thing with Greene King is it's personal to a lot of folk as we all know their pubs and may have eaten/drunk in them.

So the example (locally) at least in Suffolk, is I know of 2 of their pubs in Ipswich which they've lost over £200/week of income (I'd add it's a large group of us who all like to watch the football) from my friends/family due to mismanagement. Landlord changed, couldn't run the kitchen, food decreased in quality and service took too long, so we ended up going to a rival brand after giving the Green King pubs several chances (we go every Saturday to watch the lunchtime kickoff)- we switched to a local "independant" - who appreciated the food/drink service needs to take under 30 mins to get a beer during a football match.

For me, personally, thats why I won't invest in GK - if they can "kill" 2 successful pubs in 3 years, why would I invest. The rival pub chains in town have had none of these issues. I appreciate this ignores their succesful "selling beer to other pubs angle" - but if they can't get their own managed pubs right, I have issues with their overall management.

Arborbridge
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Re: Greene King

#209077

Postby Arborbridge » March 21st, 2019, 11:57 am

starquake wrote:The interesting thing with Greene King is it's personal to a lot of folk as we all know their pubs and may have eaten/drunk in them.

So the example (locally) at least in Suffolk, is I know of 2 of their pubs in Ipswich which they've lost over £200/week of income (I'd add it's a large group of us who all like to watch the football) from my friends/family due to mismanagement. Landlord changed, couldn't run the kitchen, food decreased in quality and service took too long, so we ended up going to a rival brand after giving the Green King pubs several chances (we go every Saturday to watch the lunchtime kickoff)- we switched to a local "independant" - who appreciated the food/drink service needs to take under 30 mins to get a beer during a football match.

For me, personally, thats why I won't invest in GK - if they can "kill" 2 successful pubs in 3 years, why would I invest. The rival pub chains in town have had none of these issues. I appreciate this ignores their succesful "selling beer to other pubs angle" - but if they can't get their own managed pubs right, I have issues with their overall management.


One must be careful of particular examples in trying to prove a general case. GNK isn't perfect, but one should looks at their overall record, which has been excellent down the years that I've owned the shares.

Arb.

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Re: Greene King

#209213

Postby Walrus » March 21st, 2019, 7:45 pm

Arborbridge wrote:
starquake wrote:The interesting thing with Greene King is it's personal to a lot of folk as we all know their pubs and may have eaten/drunk in them.

So the example (locally) at least in Suffolk, is I know of 2 of their pubs in Ipswich which they've lost over £200/week of income (I'd add it's a large group of us who all like to watch the football) from my friends/family due to mismanagement. Landlord changed, couldn't run the kitchen, food decreased in quality and service took too long, so we ended up going to a rival brand after giving the Green King pubs several chances (we go every Saturday to watch the lunchtime kickoff)- we switched to a local "independant" - who appreciated the food/drink service needs to take under 30 mins to get a beer during a football match.

For me, personally, thats why I won't invest in GK - if they can "kill" 2 successful pubs in 3 years, why would I invest. The rival pub chains in town have had none of these issues. I appreciate this ignores their succesful "selling beer to other pubs angle" - but if they can't get their own managed pubs right, I have issues with their overall management.


One must be careful of particular examples in trying to prove a general case. GNK isn't perfect, but one should looks at their overall record, which has been excellent down the years that I've owned the shares.

Arb.



Not sure I agree here. One place we PI have an edge is actually seeing what is going on at the ground level. My best investments have been companies that to my mind were clearly doing great business, McDonald's and Greggs would be prime examples of that. Greene King is very much a meh for me The beer is not good, the pubs I don't think are particularly great (near me), the only thing I like is the property portfolio. At it's lows it was a buy relative to land and it's peer Marstons. Now personally I'd trade out of it and go for a REIT.

Goes back to sleep

Walrus
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Re: Greene King

#209215

Postby Walrus » March 21st, 2019, 7:47 pm

Walrus wrote:
Arborbridge wrote:
starquake wrote:The interesting thing with Greene King is it's personal to a lot of folk as we all know their pubs and may have eaten/drunk in them.

So the example (locally) at least in Suffolk, is I know of 2 of their pubs in Ipswich which they've lost over £200/week of income (I'd add it's a large group of us who all like to watch the football) from my friends/family due to mismanagement. Landlord changed, couldn't run the kitchen, food decreased in quality and service took too long, so we ended up going to a rival brand after giving the Green King pubs several chances (we go every Saturday to watch the lunchtime kickoff)- we switched to a local "independant" - who appreciated the food/drink service needs to take under 30 mins to get a beer during a football match.

For me, personally, thats why I won't invest in GK - if they can "kill" 2 successful pubs in 3 years, why would I invest. The rival pub chains in town have had none of these issues. I appreciate this ignores their succesful "selling beer to other pubs angle" - but if they can't get their own managed pubs right, I have issues with their overall management.


One must be careful of particular examples in trying to prove a general case. GNK isn't perfect, but one should looks at their overall record, which has been excellent down the years that I've owned the shares.

Arb.



Not sure I agree here. One place we PI have an edge is actually seeing what is going on at the ground level. My best investments have been companies that to my mind were clearly doing great business, McDonald's and Greggs would be prime examples of that. Greene King is very much a meh for me The beer is not good, the pubs I don't think are particularly great (near me), the only thing I like is the property portfolio. At it's lows it was a buy relative to BLand it's peer Marstons. Now personally I'd trade out of it and go for a REIT.

Full disclosure have done the above
Last edited by tjh290633 on March 22nd, 2019, 9:23 am, edited 1 time in total.
Reason: Tags corrected - TJH

NorwichFool
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Re: Greene King

#209268

Postby NorwichFool » March 22nd, 2019, 1:06 am

I've looked at buying into GNK a few times over the years, but never gone for it for a number of reasons:
1. A relatively small company which is definitely not in the "too big to go bust" category.
2. Excessive debt
3. Poor share price performance.
4. A very competitive market segment in which margins are being squeezed.
5. No "moat". Easy for both large and small businesses to compete directly with GNK.

On the plus side they do have a very good dividend history and the divi is fairly well covered.

Arborbridge
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Re: Greene King

#209282

Postby Arborbridge » March 22nd, 2019, 7:08 am

Walrus wrote: Greene King is very much a meh for me The beer is not good, the pubs I don't think are particularly great (near me), the only thing I like is the property portfolio.

Full disclosure have done the above


No idea what meh means, but surely the criticism of the beer is just a personal preference? I used to love a drop of Abbott, but I don't drink beer much at all these days. I find yeasty beers, particularly, give me a reaction like hayfever and people think I'm sitting there developing a cold :( Malty beers are fine.

starquake
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Re: Greene King

#209321

Postby starquake » March 22nd, 2019, 10:21 am

Walrus wrote:Not sure I agree here. One place we PI have an edge is actually seeing what is going on at the ground level. My best investments have been companies that to my mind were clearly doing great business, McDonald's and Greggs would be prime examples of that. Greene King is very much a meh for me The beer is not good, the pubs I don't think are particularly great (near me), the only thing I like is the property portfolio. At it's lows it was a buy relative to land and it's peer Marstons. Now personally I'd trade out of it and go for a REIT.


This is exactly it - I posted that to see if others had seen similar. The fact I know 2 pubs ended up with lost likely around £5-6k (ie, the football season) in annual revenue from my friends alone due to mismanagement is a key point. We would absolutely still be drinking there if they hadn't reguarly "for weeks" understaffed the bar, resulting in 30 min waits for a pint, and killed the kitchen with bad chefs, in not one but two pubs. If that's a trend, it's worrying - and for both to happen in last 6 months is unusual...

And I did note that the 3rd party beer sales angle may be better, but the "beer" for me isn't the draw, it was the fact their pub was a nice place to watch the Saturday kickoff after a mornings shopping with our wives (and there were 2 GK choices back then). I would also add it wasn't just my "friends" that have stopped going there, the replacement we're in now has I would wager ~ 30% of the old "football" customerbase of the main Greene King Pub alone every Sat/Sun. People are fickle, and can and will spot bad service - and it's this shallow moat that Greene King have eroded locally - people do have a choice where to drink in many towns! Personally I believe hiring good managers to prevent that movement is a management issue - which Greene King are failing on in their own back doors today.

Personally I invest purely on what I know about like Walrus, which is typically where I spend money, or see friends spending money, or know about personally. If I heard that all my friends had for example stopped eating Greggs sausage rolls (more the opposite!) - I probably wouldn't buy Greggs. Service is also less of an issue in Greggs/Mcdonalds - you pay your money you get your sasuage rolls or burger. In a pub, if service is bad, you won't go back, and the opposite is also true. (The latter point was why we stayed going there for literally years). I honestly suspect if what we've seen is the case UK wide, results at GK will suffer.

ron505
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Re: Greene King

#213331

Postby ron505 » April 7th, 2019, 12:47 pm

My view is that the GK pubs are getting better, I’ve been in quite a few recently. They’ve also been busy.

In terms of the numbers, I like the dividend record and asset base but may hold out in the hope of a price drop.


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