Market's view on Marstons
Published on April 2024
- Stock watchers are discussing the financial stability of Marston’s, noting the company’s significant debt and insufficient debt reduction post-COVID, which is hampering cash flow improvement.
- There is concern about the impact of high interest rates on shareholders, with possibilities of a debt for equity swap or a dilutive fund raise being discussed as potential risks.
- The CEO’s recent purchase of £100,000 worth of shares is seen as a positive sign, providing some confidence in the company’s future.
- There is a debate on the impact of COVID-19 on the business, with acknowledgment that the pandemic caused substantial financial loss, but also a recognition that prior investment in better quality estates began to deliver decent cash flow before the pandemic.
- Discussions include technical financial aspects such as the impact of floating-to-fixed interest rate swaps and the revaluation of land and buildings, indicating mixed financial maneuvers and their implications on the company’s financial health.
- The company’s approach to managing interest rate exposure through hedging is highlighted, providing some stability against short-term interest rate fluctuations.
- Concerns are raised about the potential for severe shareholder dilution if the company needs to raise cash again, noting the low share price could be disastrous for shareholder value.