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Blimey, that's a ton of cash going into a recession...
So legal dispute settled?
They had £29.8m provisioned.
Total fee was 49.8m
So ~20m off their reported equity of 461.9 reported 27 August 2022?
So still book value per share of ~95p?
"Settlement of Legal Dispute" just confirmed.
* "N Brown Group plc is pleased to announce that full and final settlement (the "Settlement") has now been reached in respect of the ongoing legal dispute with Allianz Insurance Plc"
* "Under the Settlement, which is a negotiated settlement and made without admission of liability, JDW will pay the Insurer a sum of £49.5m in full and final settlement of the Dispute, below the sums claimed by the Insurer (which exceeded £70m inclusive of interest and costs). A provision of £25.5m in respect of the claims by the Insurer was recognised in the Company's balance sheet as at 27 August 2022. By the Settlement, the Dispute has been brought to an end".
* "The Settlement removes a significant element of uncertainty and distraction for JDW and allows the Company to focus on creating shareholder value through its core business activities as it continues its transformation".
* "The Company has sufficient liquidity to meet the cash flow requirements of the Settlement, including unsecured net cash of £82.9m as at 31 December 2022 as well as access to a RCF of £100m and overdraft of £12.5m, which are both fully undrawn as at 9 January 2023. Payment is expected to be transacted before the end of January 2023. After satisfying the Settlement the Company will retain a strong unsecured net cash position with material additional liquidity facilities remaining undrawn".
At long lost! It's fair to say that we can now all move on as the overhang of the last 2 years + has pulled the BWNG share price down due to the legal uncertainty. This should see us back up to the 70p-100p a share range during 2023.
Good luck, Brighty
Here is the discussion. The members of the club tried to guess a fair valuation of the company, and made some points.
https://www.youtube.com/watch?v=Pb6lafdbpT8&t=4092s
With a market cap of close to £125 million, provided that the company survives, the margin go safety is wide.
Generally, I think that the retail sector is a good contrarian bet, and N Brown is discussed among other British undervalued retailers at London Value Investing Club on Monday 12 Dec.
I want to have your thoughts. What are the ways that this company can fail?
24-Nov-22 16:09:29 22.05 -5,000,000 Unknown* 22.20 23.25 -1m
some more chat here: https://uk.advfn.com/cmn/fbb/thread.php3?id=3770328
At first sight the results were disappointing, however given that retail is having a tough time at the moment, they weren't all bad. Net debt is down, and they did at least make money. In times like these a retailer needs to stay in the game while others fail around them. They are then poised to clean up when things improve. As long as they keep costs under control, I am still reasonably happy. Mkt cap of £106m is only just over 2 x net cash of £47.2m. If we can just get the Allianz litigation monkey off our back, we should be able to see a much fairer valuation.
I and my parishioners have held Brown for some time. The results wer reasonable, Fraser Group have taken a stake, and the shares are going down. We are baffled. Any thoughts? Every blessing revshep
https://www.telegraph.co.uk/business/2022/10/22/mike-ashley-snaps-stake-struggling-asos/
As scattergun as ever or part of a devious plan? Where does this lead to in respect of BWNG - anybody's guess!!
And talking about other companies.
ASOS YTD: -77.11%!
BooHoo YTD: -67.59
And from across the pond
Nike YTD: -46.85%
And Euro
Addidas YTD: -57.45%
I mean, this is systemic across the market
BROWN YTD: -47.24% as of this
Therefore, can't kick the stock, comparatively, on par.
Indeed, agree and hope you're right. However least its now getting some publicity. Said on another chat, ~50% of the current share price is made up of cash. Quite a ridiculous valuation. Understand the macro issues happing and therefore being reflected in the price (and that of all LSE companies really) . However, buyers must be looking to capitalise here. Even an offer of 2x the current price puts it at 50% the book value!
I wouldn't expect a 57p bid to be accepted. I'm pretty sure that there were some calculations published a while back showing that the Alliance Family average was approx 118p in BWNG, following the £59.9million averaging down process at circa 57p. I can't see a 56% share holder (Alliance) going for a low ball offer from Mike Ashley & co of half what their investment was bought for? A bid would surely need to be at breakeven or higher to make it worth their while. i.e. 118p a share. Good luck, Brighty
https://masterinvestor.co.uk/evil-diaries/evil-diaries-developments/?mc_cid=8f923c2bca&mc_eid=31ad53697c
'The Mashley’s Frasers bought c. 5% of NBrown (BWNG) a few days ago. BWNG is now 25p offer. If this price stays there I am taking up work. Of course the Alliances know what they are doing but it may be better if The Mashley relieves them of the work in hand. I suppose 50p is the first stop.'
https://www.thetimes.co.uk/article/frasers-group-grabs-stake-in-fashion-retailer-00zxq0bc0
Interesting/intriguing!! Whilst retail has its challenges at the moment you would, in my opinion, hardly call BWNG a distressed business or a broken project so maybe an attempt to get into a "decent " underlying business at an opportunistically low price and use as a platform for his next venture. After all, with Ashley having himself stepped back from Frasers/Sports Direct, people like this don't then sit around twiddling their thumbs doing nothing.
On the other side, do the Alliance family really want cash at this time, remembering, if the theory is correct, part of the move to AIM was an Inheritance Tax manoeuvre, the 2 Year Qualifying Period not coming up until 23/12/2022. So can't see them wanting to liquidate now or indeed in the near future if trying to stave off filling the Exchequer's coffers unless have used other techniques to mitigate potential death tax liabilities.
One to watch, hopefully for the benefit of my pocket, also!!
Ashley only ever buys broken projects, maybe there's more here then meets the eye..
Alliance family didn't know what was coming, and maybe they want out?
Lord Alliance and Joshua Alliance spent over £59.9million averaging down their holding in BWNG at the end of 2020. £49,905,248.76 shares at 57p and £10million shares at 57p respectively. The last time I looked they held approx 56% of BWNG. If Mike Ashley is hoping to buy the BWNG business I can't see the Alliance Family wanting paper, they would most likely want cash. The cash exit price therefore as a rough calculation would have to be much higher than the 57p the Alliance family paid to average down their holding to make it of interest to them one would expect. Anyone know what the Alliance average price is these days? I recall several posters / commentators saying they had calculated the Alliance Family average as approx 118p after the 57p averaging down process. What price would be acceptable to the Alliance family and what is Mike Ashley up to here / will we see 118p as a bid are the two big questions? One to watch in the coming weeks and months. Good luck, Brighty
Whenever Fraser's is involved it never ends well....
TR1. Frasers Group taking a 4.5% stake through 'financial instruments'. Hmm.
Why?
I mean, the ratios on the balance sheet are great in some areas. Meaning the book value per share has increased.
Disappointed on the dividend update (fair enough though), and the litigation case.
Ignorant to think we would see profit in line with last years expectations with everything going on. As you said, other retailers reported similar drops across the board. However the balance sheet on this is strong. If the balance sheet was poor i would wonder why i'm still holding, but the strength of it shows financially we're in a good space. Just consumer spending, as expected, dropped.
I agree. The results are not good, obviously. But probably broadly in line with what the market expected. Hence a sense of relief. I wouldn't be surprised if, over the next few days, the share price clambers back to where it was before the results were announced. This would be in line with the pattern of other retailers such as BOO. I am well under water with this "dead money" share but will hold for long term recovery, which I believe is just beyond the horizon. I have neither the need nor the desire to crystallize a loss.
The share price dropped sharply first thing but has come back quite a bit.
12% down now isn't too bad considering the big drop in profits... shows how depressed the share price already is and it tells me there was a degree of anticipation that these results would be tough.
That's a big fat profit warning...
I'm buying a small amount when it's under 10p for a 3-5 year hold.