Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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How did you know my name was Simon :)
How's your short going Roberto Carlos ?
Finally someone with some sense of reality on here. Well said Simon
Well... I guess this is the start of the slow climb back to £15 by Xmas 🎅✊
Management, Heads of Buying , Buyers and Marketing, all very aware and agree on the need for TS/TM to be Omnichannel, also they have a wealth of experience on this having come from Inditex, issue is money and timing. I think ship needs to continue to be sailed into calmer waters before embarking on another journey, in meantime Pirates on the horizon, LoL.
Simon, The Red Sea woes for me can only be a genuine reason and not fluff.Its pretty obvious this will impact imports/exports in a big way for any company using the route for goods.
I agree with the lack of buying from the people running this outfit, afterall, it is the only way they can show some confidence in the turnaround.
On the takeover point, I actually think it's increasingly likely given the reported interest of TS, at what price is another story.
You are right about Topshop, considering this brand is so sort after, the brand gets lost on the website.
Why not have a separate website for such a big brand, if we are going to have physical shops bring back Topshops?
What do I know, these few points just seem like obvious easy wins, low hanging fruit for the taking.
I think we will sit around 400s.
Breaching 450 will take news.
Simon the shorter is back Zzzzzzz
Have dug out bits between the waffle of the report. I remain underwhelmed. Hoped for better but we are just about keeping on track. Still promises of jam tomorrow. Waffle 'as the result of old stock and red seas delays there is a suboptimal level of newness providing a less compelling customer proposition' ! I will put a few thoughts out there.
The most risky area is Debt. Pretax losses widen to £120m from £87m last year. I've previously highlighted the incompetent borrowing facility last year at high rates. Inventory still too high.
West6809 sensibly reminded us of the £500m bond. Will need to be thought about in 18 months. We may just see some profits coming through by then, but interest cost on bond could be four times higher, maybe more. And where did that £500m go? Some was part of the finance restructure after the the TS aquisition. The rest was for global expansion. That went well didn't it? Sales in USA down 25%. Profit margins expectedly down due to clearing old stock, but I predict some further write offs. Impairment of £14m due to mothballing of Lichfiled site. What a waste. Shein market share rises from 1.7% to 2.2%..Asos share down from 3.1% to 2.4%. Shein chipping away. When they list in London they intend to mean business, and will have deep pockets, hope an offer for Asos! NY sensibly rejected them . Yes, a lot of their stuff is rubbish but they will continue to eat into market share. Asos have merely copied Shein's model....Test and React. It works quite well but hardly new. Time and again they blame something for low margins....selling old stock, having to slash prices to compete, Xmas discounts, unforeseen factors eg Red Sea woes, the weather etc Topshop is a wasted asset in my view. It needs a physical presence and MA knows this. As for Mr Calamonte, he says the new business model is 'showing promise'. We need more than that. This is the sort of guy who will probably only buy shares if a crisis occurs and he buys to prop them up. If he hasn't shown confidence in the share at this low price, while things are 'showing promise', why should I? As for the CFO role, Glithero didn't last long - 11 months. Dave Murray. Oh dear! Bankruptcy seems to follow him around like a magnet. 2019/22 at Farfetch, went bust. 2022/23 was at Matches, went bust and MA seems to have 'let him go'. I'm just hoping it's not going to be 3 times unlucky. There's a lack of substance in this report. MA sees this as an inefficiently run company but which could be turned around and would be a good fit for him. Other than takeover speculation, this share will stick around the £3.30 to £3.80 mark. A 100% rise is very unlikely short term. £15 by Xmas is cloud cuckoo land. Shorts need to reduce by at least half to get things moving. All in all, nothing to see here.
It is the biggest worry which is why this turnaround is huge and needs to go to plan, ontop of macros improving. If none of it goes to plan then.. well you can guess.
Alot will change between now and next year as James says, none of us can guess.. we just have to have faith the BOD fulfil there future guidance. 😅
Agree...2 years from now ASOS will be in a much better place, even a small raise off 20 quid a share would be understandable then.
Note bondholders can only convert at 79 quid a share so unless SP is higher can't see that happening.
Bond was issued to fund Top Shop in the main so arguably was a good use of funds assuming Top Shop value in 2 years time ie much higher than what they paid for it I imagine given the progress it is making.
No probs West.
It is worrying however; if we fast forward to this time next year, we should be turning a profit by then and hopefully interest rates will have come down should we wish to renew the terms of the bond when it expires.
We do have some breathing room between now and then.
They did say in the update they were currently exploring different avenues regarding the convertible bond.
Obviously anything other than dillution would be welcomed from a share holders perspective.
James I’ve just listened to the podcast. Thanks for sharing. The only thing worrying me is the convertible bond which is due in 2026. £500 million pounds. I’ve touched on it before but this out of everything I heard, whilst not new, is my biggest concern by far.
I'm with KYK and BlackFox on this point.
If you don't need to sell thee asset that everyone else wants then why would you?
Cash distribution to shareholders is not even on the horizon as far as I'm concerned.
Not sure if we listen to podcasts on here?
ASOS is featured on Investors Chronicle pod this week.
https://open.spotify.com/episode/4JTZY9WuYyWChRvAMz4FFZ?si=Dx6S-zL-QY2icqQFD5TTMQ
Starts at around 22.40
Nothing we don't already know.
Compared to the last time ASOS featured and this time, it is slightly more positive.
Hoping they can hold onto it, personally.
Also, I would be amazed if the BOD hasn’t already received a bunch of ‘highly preliminary / indicative’ proposals/offers, in the last 12 months. But despite the sense these articles give, the turnaround seems to be progressing steadily, so why sell? (if they don’t need the cash to stay alive).
GLA
Topshop is performing very well at Asos based on the update provided. I have no reason to think that Asos will sell this golden nugget. IMO it’s either all or nothing… all meaning… a full offer for the complete company.
If this were to happen, then I would be happy for the money to be used to deleverage and strengthen the balance sheet, but I would also like to see a cash distribution of some sort for shareholders.
That will keep me satisfied until FY25 when we should see the full effect of the turnaround plan manifested.
Article suggests a premium would be offered for Topshop if one did materialise. Exactly what I was thinking.
https://ww.fashionnetwork.com/news/Can-asos-keep-topshop-as-shein-and-authentic-rekindle-interest-,1625532.html
Can ASOS keep Topshop as Shein and Authentic rekindle interest?
By
Sandra Halliday
Published
today
Apr 18, 2024
News last year that Shein and Authentic Brands Group were interested in buying Topshop – currently owned by ASOS – seemed to be just a rumour. But now the speculation has resurfaced and given the well publicised problems at ASOS it could mean that a takeover by one of the fast expanding businesses is more likely.
Topshop
ASOS bought Topshop in the wake of the Arcadia collapse and despite the brand having struggled under the previous owner, it remains a globally-known and in-demand label. That makes interest from big players unsurprising, as does the fact that ASOS still faces huge challenges in its turnaround, despite talking of making progress when it delivered its results this week.
The Times claimed Thursday that Shein is among a number of potential buyers that want to take control of the brand with Authentic also believed to have shown fresh interest.
None of the parties concerned have commented on the newspaper’s report.
It said ASOS is believed to have received “non-stop interest” from a range of high-profile retailers. This further underlines the brand’s appeal and status despite the issues of recent years.
ASOS paid £330 million to buy Topshop, along with Topman and Miss Selfridge, from failed Arcadia in 2021. At the time, its rivals to buy the business included Next, Frasers Group and Shein, according to reports.
Last year, ASOS has reportedly considered selling Topshop in the face of its own widening losses and ballooning debt, although nothing happened at the time, even though Shein and Authentic were said to be interested.
Both of those giant businesses are acquisition-hungry and both have shown enthusiasm for buying UK properties. Shein, for instance, acquired Missguided from Frasers Group, while Authentic is the owner of both Ted Baker and boot company Hunter.
They both have very deep pockets too and would be able to pay a premium price if ASOS was in a position to hold out for one.
It's unclear whether Shein and Authentic would be rivals or partners in buying Topshop as they have existing links with each other. Shein last year acquired an interest adding up to a third of Sparc Group. That’s a joint venture between Authentic and Simon Property Group.
But one big question here is whether ASOS would want to sell one of its top-performing units to a business like Shein that has become a thorn in its side. It’s a major rival whose success is partly responsible for ASOS’s sales struggles in the past couple of years. Anything that would strengthen its rival is likely to be bad news for ASOS.But its current problems may force it to take actio
Not that we are on there but interesting nevertheless.
https://imgur.com/jpFCEhd
Ha ha brilliant.
Shorts are down larcos, you missed the part where it doesnt show shorts until the next day, so trading update, price went up, shorts came down….still gonna beat that same drum now? 😂 hope everyone can make money here, except you, i hope your short burns
Agreed @blabla.
The way I see it, the charts are one useful tool in the arsnal of tools available to investors, in order to make a rational investment decision.
Majority of LTH here have used those tools and purchased their little chunk of the business.
Alls we can do now is dip in and out of those tools to see how we are getting on.
Takeovers ofcourse, can only be surmised upon.
Whether they are likely or unlikely given the situation.
In ASOS's case, given the wealth of Shein and their aspirations to float on on the Western markets,it is very likely of a takeover.
Well said. Come on ASOS !!
For me the glass is half full but yep i am a LTH here for the business thesis turnaround. A bid is not included in that one, could happen like also an escalation in a war between israel and iran can happen with a barrel at 130 USD en macro turns to .... again. How you or the market interprets the trading update is the name of the game. A lot of information is lacking, so I need to fall back on inductive reasoning and try to guess the odds. If you wait for a full proof of the recovery working you are left behind, that is why investing has an element of risk in it. For me one thing is clear, looking at charts and trying to predict the future is a much greater risk. Like a famous math guy once said many years ago, the mathematical expectation of the speculator is zero. Perhaps he is right, i do not know but what I do know is that if Jose and his team keep working like this and get a tailwind the upside to 10-12 is there for the taking. GLA and njoy your weekend. Long asos!
On trading update day the price rose to £3.78, since then we had the H1 results and the price has dropped close to all time low and shorts are up.
The question is - Why did that happen given that (you think) the H1 results / outlook were positive?
Calaramonte needs to go
@roberto - the price at close of play on 25th March was 3.46 so therefore it’s higher not lower.
Happy to help. Facts matter.
All of us are factually correct but you my friend are comparing apples with oranges.
According to your warped logic if a share price is at £2 , then rises to £4 after a trading update but then falls back to £2.50 . In your bizarre world this apparently means that the price has fallen 😂