Fuller Smith & Turner Live Discussion

richard599 07 Feb 2019

Selling the beer Games, “It seems they still won’t send booklets to shareholders of nominee account directly …” Sorry for the delay. I should clarify … I asked II (Intereactive Investor - with whom my nominee shares are held) and they just popped them in the post to me (not GNK). I’m guessing II and other brokers get them in batch from GNK and bung them in a drawer until peeps ask for them.

Gamesinvestor1 28 Jan 2019

Fullers Price and Brokers Latest Peel Hunt has target at 1250 on the basis that it’s net debt to EBITDA ratio is expected to fall to less than one. Sounds like nonsense to me. (OK maybe because I sold I’m trying to justify it lol!) I’d rather prefer to bin EBITDA and consider the real borrowings or liabilities. Given also that the Assets of which 80% plus are illiquid properties valued at £564M, I think the better measurement is probably interest cover or borrowings / net income. Looking at the latter measurement it’s more like 7.5X (liabilities are over £355M, of which over £250M are borrowings, and Net Income £45M) Given that £55M to £60M of the net proceeds of brewery sale of £205M are to be returned to shareholders and a good chunk of the rest is going to the pension (unspecified), there isn’t as much debt reduction as you’d like here. Maybe £75M to £100M? Given that earnings per share are expected at 63p this year, it’s highly likely to be the same or less next year, given that the beer business will have to be taken out. So given that the share price is hovering around 1100 and let’s be generous and say they still achieve about 58p next year – that’s still a P/E ratio of almost 19. It’s not cheap and 1250 would look pretty expensive. That’s probably why the share price has languished around the 850-950 mark. It might start to do that again, as I’m not sure why Peel Hunt thinks this that it will suddenly start to grow it’s earnings at a faster pace all of a sudden. They are still the same pubs and they are still the same rooms for rent. Or is there some new magical former that the special owner shareholders have found? Games

Gamesinvestor1 27 Jan 2019

Selling the beer NewBill1703: as well as a punch in the face IMHO, but that’s just me ““as well as a punch in the face IMHO, but that’s just me”” William - outrageous - if your mother could hear you now lol !! Games – agreed - what will be will be eh, either way the UK is already now massively compromised on he world stage with such weak leadership.

NewBill1703 27 Jan 2019

Selling the beer Gamesinvestor1: Well I think any movements in currencies will iron out over time and to a large extent some of it is already factored in… You may even find that very shortly after leaving that sterling starts to strengthen given that the Euro is a busted flush and will eventually be disbanded… I’d be a buyer of Sterling in the unlikely event of a clean break from the EU… Well, you are right about evening out over time - though just how long, we have no idea. And while at least some of it is factored in for a reasonable compromise Brexit, it certainly isn’t - particularly back up at 1.31 - for a Tim Martin, hard-as-nails Brexit, which is what he wants (as well as a punch in the face IMHO, but that’s just me). As you know, I am fairly agnostic about all of this - for me some kind of clarity and certainty is much more important as to which way we go, and which road we choose to get there. But I find it bemusing that, along with various other obviously mythical “Unicorn” protestations, people throw out vague possibilities, of even vaguer time horizons, in the same breath as near-term near-certainties. Maybe the EU - and/or Eurozone - will break up? Maybe it will even be in our lifetimes? Every chance I suppose, eventually, as all such challenged constructs tend to have a finite lifespan. But there is actually no evidence, nor obvious catalyst for it coming to pass any time soon … yet we pretty much KNOW that on a “hard” Brexit crash-out, GBP will likewise crash down back through 1.25, almost certainly 1.20, with 1.15 (as before) as a reasonable best guess. Not “sometime”, not “in due course, maybe”, but on Day 1 (Hour 1). So as you are keen to Buy Sterling, I suggest you make sure you are doing so at/around 1.15 - and yes, I agree, that probably would be a strongly profitable trade, over time, rather than at the current +1.30. Don’t want you losing money on an obvious dud, Games… we both know it’s easy enough to lose money on the less obvious duds (without the benefit of hindsight, of course!)

Gamesinvestor1 27 Jan 2019

Selling the beer "What the halfwit Martin will have to factor in is - if he gets HIS Brexit - the FX rate will hardly touch the sides down through 1.15 " Well I think any movements in currencies will iron out over time and to a large extent some of it is already factored in. You may even find that very shortly after leaving that sterling starts to strengthen given that the Euro is a busted flush and will eventually be disbanded on the basis they will never reach consensus on a full political and fiscal union. The southern European countries economies are already so broken they will not be able to support the currency forever. I’d be a buyer of Sterling in the unlikely event of a clean break from the EU, but the establishment are blocking it, to their own future detriment at the ballot box. Then again neither of liblabcon matter anyway as they are not running the country. You could vote for either of the idiot parties and it would make little difference, or you could just as effectively chose not to vote for either them. Games

NewBill1703 26 Jan 2019

Selling the beer Gamesinvestor1: I suspect Tim Martin is hoping that he gets his Brexit so that his import costs fall significantly, especially as he is intent on buying everything from outside the EU and if the UK were to be free, those prices would be falling, unencumbered by EU tariffs. What the halfwit Martin will have to factor in is - if he gets HIS Brexit - the FX rate will hardly touch the sides down through 1.15 (and I’m NOT talking vs the Euro!), and any input cost benefit from lower tariffs will be MORE than wiped out, for the duration. He does know how to run a cheap pub though… let us hope he learns to stick to that. Gamesinvestor1: However, I agree with you that pub-rooms business is very challenging. I’ve been into a few Fullers pubs in London over the last 2 years and some leave a lot to be desired - they are also very expensive compared to some others. All the evidence du jour, Games, is that the pub biz is polarising, with those who have mastered the cheap end (eg. Tim M and his chain) and those suitably focused on the premium end (Fullers, Youngs?) doing very well indeed, judging by trading in the run-up to and over Xmas at least. It’s the middle ground that is getting squeezed, and I suspect this continues. I agree it’s a “handsome” price, Games, for the brewing bit, particularly given this is the bit that has struggled to sustain margins and growth in recent times. I don’t doubt it’s a good deal for the Japanese too… but no reason for Fullers shareholders not to be grateful indeed.

Gamesinvestor1 26 Jan 2019

Selling the beer No that pretty much sums it up, and at the current price, close to a 5 year low it does seem like a balanced risk. I popped a third of the proceeds from the sale of FSTA into NG yesterday, effectively doubling my holding from first entry a week or so ago. One for the sock drawer me thinks. Games

In_the_dark_yet_again 26 Jan 2019

Selling the beer LSE:NG @Gamesinvestor1, OK… what am I looking for on the NG board? My opinion on NG hasn’t changed - political risk is the biggest issue; the ever rising energy costs mean politicians feel they need to be seen to de doing something regardless of whether it’s effective or disastrous. The ‘price cap’ mainly affects the retail side, in particular the ‘big 6’ and the independents seem quite capable of keeping prices well within the cap. I do expect a more rigorous stance from the regulator with regard NG’s pricing framework but, to date, they have always been a bunch of amateurs up against the NG Pros. If the framework is too tight then there just won’t be the necessary investment - I think NG has a better hand of cards than most analysts suggest and they have always been very good at playing them. No, I don’t think the dividend is that much at risk but only expect CPI growth at best. Or was there something else on the NG board I should be looking at? Regards, ITDYA

Gamesinvestor1 25 Jan 2019

Selling the beer ITDYA - Pop over to the National Grid board. Games

jomozz 25 Jan 2019

Selling the beer I’m somewhat saddened by this. I’ve held a few FSTA shares for sentimental reasons pretty much forever. In the 1960’s and 70’ we lived in Luton. Every other Saturday we would jump in the car and dad would drive up to London (was always ‘up’ regardless of actual direction). Mum, my brother, sisters and me were dropped off at nan’s (mum’s mum) in Chiswick while dad went to watch Chelsea at Stanford Bridge. Afterwards he’d take us to Putney to see his mum. As an 9 year old I was allowed to cross the road to the off licence and buy a bottle of Mackeson Stout to give her. On the way home we’d pass by the Chiswick Brewery (sometimes twice) and dad would insist we opened the windows and get a good sniff. The air was different there, it smelled amazing. Funnily enough at home, if the wind was in the right direction, a similar smell could be had (not as good though) from the Whitbread brewery in Oakley Road, Luton. Childhood memories, mmmm.

Gamesinvestor1 25 Jan 2019

Selling the beer Richard, It seems they still won’t send booklets to shareholders of nominee account directly, but only to those that hold a share certificate directly. This is the message below which is perverse logic in itself - what they are saying is we know you are a shareholder but won’t send it unless you have a paper shareholding - bizarre – so I go to the trouble to change my shareholding so that they then decide to send it to me directly, which would cost them the same amount of money to post it. “”""Thank you for your email. This is what they replied with ----> “”“I can only reiterate the comments Dawn made in her email below and note that our policy has not changed. We continue to provide shareholder voucher booklets to nominees for onward distribution to underlying shareholders but do not have the capacity to undertake this task ourselves. I arrange for 32,000 booklets to be printed last summer and distributed thousands to nominees that are willing to pass the benefits on to their shareholders. As Dawn suggested, you may wish to consider moving your shareholding into your own name, or to a broker/nominee that is prepared to pass on shareholder perks to ensure you receive the benefits available to you.”"" Games

Gamesinvestor1 25 Jan 2019

Selling the beer Richard, well flagged, I just fired off an email to the company secretary. Games

richard599 25 Jan 2019

Selling the beer Games, I just asked II (nominee ISA acct) for the Greene King vouchers and they sent them straightaway. Good news is they are now 25% food and drink and you get five goes a month. Not to be sniffed at. R.

Gamesinvestor1 25 Jan 2019

Selling the beer Very wise ITYA, the discussions do get borderline nasty. You know I never had the card, I did have a Greene King one but they stopped sending them out directly so gave up on that one. So I guess I’ll never miss the Fullers perk – at least they gave me 14+% so what ho I can afford lunch and a pint there now and again! I’ll buy from Tim Martin for now – OK call me a cheap skate, but it just so happens that there are some decent places they converted from old banks in places like Chancery Lane etc - so not your typical spit and sawdust places. I need to find somewhere to put the proceeds of FSTA sale now - it was over 1.2% of my wad. Games – You might still get a 20% gain and 110 by the end of the day.

In_the_dark_yet_again 25 Jan 2019

Selling the beer LSE:FSTA Games, Looks like the market agrees with you as it’s back below £11. I guess I’ve missed my window of opportunity… again! As for Brexit, I got involved in discussions early on but dipped out relatively quickly as no one on either side seemed to be listening, the positions just getting more and more entrenched and the ‘arguments’ occasionally personally abusive. I came to the conclusion that my opinion expressed on a share/market ‘forum’ wouldn’t make the slightest bit of difference to the outcome so just chose to avoid. Downside is it still seems to make up a large proportion of the posts so I’m finding it very difficult to find useful share specific stuff amongst all that noise. Did you get your Fullers Inndulgence card? And, if so, you will immediately retire it now you are no longer a shareholder? Haha Regards, ITDYA