Morning Mumble: Majestic Wine's, the need for more than Christmas Cheer &...AGO (ASX: Atlas Iron) Any old iron for a tank. Free of Tie coming to an end...which leads nicely on to the MRW hospitality.

Good Morning, it's been a hectic few days I've been doing some paid work in the afternoon which means there's limited time for things in morning.

Those that follow Majestic Wine's (MJW) and read or commentate on FTML will know my views on Majestic Wine's. They had their interim results out on Monday which were as predicted down on profits, sales were up more than thought. Majestic's was in a very good position in terms of pricing perception, it sells wine in 210 stores. Quite why it's not selling more online or advertising its seasonal wine tastings to the wider public is surprising, but then perhaps some common-sense customer relationship management (its apparently new for MJW) may help.

MJW are expanding their focus especially on business sales with average spending per customer up to £130 from £127, which I suspect is in part to the price increases. If you factor in the average bottle price purchases of £8.02 (2013: £7.71) then MJW's average spend is falling behind the price, as it should have maintained an average order of £131. Picky perhaps, but if MJW do no evolve its a sitting duck with UK sales currently about perception...even for the wealthy folk out there!

The profits are down because of company investment but more importantly because of the UK Supermarket competition. They may escape the brunt of it, but the impact is starting to be shown as they have not added one active customer since their final results in March and EPS has fallen 10%. 

MJW acknowledge in the Chairman's Statement, "The retail environment in which we operate remains highly competitive, however, Majestic traded in line with our expectations and we increased market share over the period by 0.1% to 4.3%. Total Group revenues at £133.8m were up £3.6m on the previous first half and UK like for like sales grew 2.8%."

Although MJW is now looking at Multichannel sales and Customer Relationship Management (about time), the service offered won't be compelling for the masses and those being pinched (financially) or tempted by the offerings elsewhere will cull the individual purchases items in favour of their shopping basket as the competition hots up. 

There's no reason to get excited through 2015 as MJW openly admits "The 2015 financial year is one of investing to put in place the building blocks to deliver future growth and shareholder value and we are progressing to plan." So for those expecting no less, until there are visible changes in advertising (currently lacking in my view) and the odd dinner party host evidencing more buys from Majestic I see no reason to change my view save for the Christmas run. Admittedly, there's likely to be a pre-Christmas appreciation in the stock (hope) so the short positions will be set aside until Christmas eve (yes a brave one). 

Its surprising the amount of attention my shorts in Atlas Iron (ASX Listed: AGO) have been getting. The company has been making progress with cost cutting and expanding more in to Indian (Hopefully) but with the market pricing in iron ore at $50/t there's simply no room for error for AGO. Why people get angry about shorters is almost worthy of a book, perhaps I should start getting angry when people hold long stock...if I had time or the childish inclination I'd maybe consider it after a few drinks. With that in mind, the price takers (the producers) are going to be punished, iron ore fell to $70/t and bounces. 

So to keep those ASX holders happy, it was rude not to continue on the theme with Fortescue Metals Group Ltd. (ASX: FMG), where holders were warned of the support lines, $4, $3.50 and $3, next stop $2.25. Quite why one is holding now is a question they can have with themselves or their broker. Its not for me to give out financial advice...What was surprising was one of the most dire performers on ASX, BCI Iron (ASX: BCI) actually held up better than I expected. 

It was in a meeting in Bristol awhile back I was asked which iron ore companies to short, my response was laughed at when I said all of them...amazing how things turn out. Rio is being supported by hope more than fundamentals and BLT is giving the indicator of the direction of Rio, only time required. The commentary on FTML by Roddy about being a giver or take in price terms has been validated in an usually short space of time, Iron Ore Extends Bear Market as Miner Says ‘We Are Price Takers’ By Jasmine Ng and Phoebe Sedgman.

One hopes the Australian contingent have sobered up enough to read the Cairn (CNE) news on the deep karstified and fractured Lower Cretaceous shelf carbonates. Perhaps they have drunken/blind faith on the upper clastic target, which is set to be significantly better than the market has priced in. CNE have been punished, with a headwind of oil sector pricing issues not helping, it's surprising even allow for the Indian taxation issues, why this company is still independent. Perhaps VED (Vedanta), whom the market clearly ignore the level of debt and attributable equity can raise a few quid more in debt to take the rest of CNE.

Gold, yet another predictable short off a peek with some significant coverage by speculators both long and short; there's some chunky trades out there at the moment which is pulling the market (spooking). With wider speculation limited expect the theme to continue until the volumes return in consistent numbers. Without wanting to spoon-feed, traders would be wise to follow the move in base metals, very predictable given the climate, the lack of speculation and demand driven pricing. With oil having a significant impact on mining costs and the margin between production and sales narrowing as a result expect further declines in copper (circa 5-10%), aluminium (5%), lead and zinc (same) . Key to Nickel is the Chinese supply which may offer more support with supplies indicating a restock in China circa April 2015 and the Indonesia / Philippines debacle. 

By amazing coincidence after yesterday's ETI final results where the debt mountain is simply untenable (my view), yet more bad news for Enterprise Inn's (ETI). The debt is somewhat reliant on a tied lease model which has been scuppered and Enterprise Inn's, Response to House of Commons Amendment. In response, Simon Townsend, Chief Executive Officer, said, "This amendment, which was not supported by the Government, threatens to have serious unintended consequences for publicans and the industry at large." Government defeated in pubs vote. Short the landlord, long the tenant! Over the Punch Tavern's (PUB) for a knock out statement...(I know!!! Dire!).

For those outside of the UK, see below (Article copy and paste).

The government has been defeated in a Commons vote on the control that parent companies can exercise over pubs.

MPs voted 284 to 259 in favour of an amendment allowing landlords an independent rent review and to buy their beer on the open market.

So-called "tied pubs" are required to buy supplies - often at high prices - from the companies that own the pubs.

Campaigners said the "historic" vote would help "secure the future of the Great British pub".

The amendment to the Small Business, Enterprise and Employment Bill was put forward by Lib Dem Greg Mulholland.

Mr Mulholland, the chairman of the all-party Parliamentary Save the Pub group, described the "tie" arrangement made between a pub and its owner as an "archaic" and "extraordinary" system.

Market rentIt is thought to be the government's first defeat on one of its own bills since the 2010 election.

Ministers want to create a pubs code, aimed at helping pub landlords struggling to pay rent or beer costs.

It includes the right to request a rent review after five years.

But campaigners wanted the automatic right for pub landlords to exchange their tenancy for an independently-assessed market rent without any "tie".

In an attempt to head off a defeat on the amendment, which was signed by MPs of all parties, Business Minister Jo Swinson said the government would introduce new measures to allow pub landlords to apply for "market rent" rates from after two years, if a review found other measures in the bill had not helped them sufficiently.

'Gradual process'

But Mr Mulholland said this would be "business as usual".

He told MPs the new clause, which was backed by Labour, had been drafted by lawyers and publicans and would come in gradually, reducing the impact on the industry.

He added: "This is a reasonable gradual process that will simply bring back market forces into a sector that frankly has become grotesquely anti-competitive."

Tim Page, chief executive of the Campaign for Real Ale, said he was "delighted" that "after 10 years of our campaigning, MPs have today voted to introduce a market rent only option for licensees tied to the large pub companies - a move that will secure the future of the Great British pub".

The Federation of Small Businesses said it was "a historic day for tied publicans who look forward to a more open and competitive marketplace".

But the British Beer and Pub Association said the outcome was "hugely damaging".

Chief executive Brigid Simmonds said: "This change effectively breaks the 'beer tie', which has served Britain's unique pub industry well for nearly 400 years."

Something from Duncan Fox this morning got me thinking, Tesco: Buy

Late yesterday the Company announced that Tesco Personal Finance was offering a £2bn Euro note programme. We are not sure why the business has done a note via this route, but there has been some market speculation that Tesco may float off the Bank as a way of raising some capital to reduce the debt. 

For those analysts off on the early morning KGX to Bradford for the Morrison's (MRW) Analyst and Investor Presentation and Site Visit one would be wise to not overdo the hot toddy or go away misguided by any Christmas feel good factor!  There will be a MacDonald's Gold Star award for any analyst  attending work tomorrow before midday! 

Atb Fraser