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Good point Nate.
Weather has been a great challenge in retail for sometime now. I’m sure they have now learnt some lessons on how to tackle this than just playing blind and ordering based on previous/historical tactical play.
Certainly a leaner and slimmer stock pile with a quick order turn around ability will help. Of course we are approaching vacation period soon so holiday makers will be buying their outfits.
My biggest concern right now with regards hitting guidance is the weather. We've had 2 days of decent weather and now forecast for rain for the next seven days.
Haha
Funny because right now I’m watching Humans on Netflix.
Not quite sure what Simon’s (T1000) game is, but generally the points made are worth responding to …unlike Roberto’s (T800) efforts.
Maybe Simon is an updated bot from Roberto Carlos.. bit like terminator. Simon can string a sentence together so he's like a modern boy and Roberto is just an old run around. I wouldnt be holding aswell if i felt the same.. so far Jose has done what he said he was going to. He now guides for growth from next month onwards.. :)
No mention of any tie up with India - not heard much about that for a while
Does anyone know if it is still a runner...
*I think the CEO has a steeper hill to climb than anticipated.*
Why? They report being ahead of schedule - in several metrics, but most notably cash generation and inventory reduction. Perhaps you could explain your reasoning further?
*On previous experience, that probably means 2026*
Again, can you put some meat on the bones here? Why should it take an extra year - particularly, given the improving macro situation.
Agree, re net debt but that has also been reducing albeit slightly:
From the update:
£m
Six months to 28 February 2023 - net debt: £431.7
26 weeks to 3 March 2024 - net debt: £348.8
This partly seems to be down to a reduction in the Bantry RCF, which can only be a good thing.
Re Top Shop, obviously they're going to listen to offers and proposals, but these have clearly been rejected. So, this suggests that there is no immediate need to conduct a fire sale of such assets.
Agree, re the share price . I don't, however, see it being propped up by the prospect of a bid. ASOS, is priced to fail already - It's possible that the hedge funds might manage to get it down to £3.00, but I would be amazed if it didn't bounce quite hard from there.
Re the bid prospects. I agree, it's fairly likely - in fact we know it's already happened back in Dec 2023 and in my view since then. But I don't see a bid being entertained at this stage. And unless it is over £10 (which is highly unlikely currently), I don't want it to be. In my view, this about to turn. Barker knows this, Frasers know this, and Anders likely does too. Why sell now for a ridiculous price? I suppose there is a remote danger that it could be taken private in a deal that is poor for PIs. That's a risk we have to take I suppose.
I have to say Simon, if I felt the way you seem to about the trajectory of ASOS, I would sell immediately. Not advice, of course, but I would never hold in a company that I personally believed was in such a dire situation.
I wish you and everybody here luck, however.
DYOR/GLA
Following the last months update, I think the CEO has a steeper hill to climb than anticipated. ASOS admits it needs at least until 2025 to return to a growth in sales and a positive pre-tax profit. On previous experience, that probably means 2026 then, where more hurdles linger such as the bond renewal. Debt is the major issue. As people know, I have doubts as to his ability and fear that cash could become tight between now and the promised turnaround of 2025. Why else would it explore a potential sale of its Topshop brand? While a sale would solve a short-term financial dilemma for the company, it would send bad vibes to ASOS shareholders. Selling off assets when predators know you are in dire need for cash will see potential buyers exploit the weakness.
Alternatively, will someone eventually bid for ASOS? I think this is fairly likely. This company would benefit from a single strong owner controlling things, radical changes implemented outside the public eye, and a strong balance sheet as well as retail expertise backing management. However, without the likes of MA, Povlsen or Next getting too involved, I continue to see ASOS as a crisis-ridden company that may have to go cap in hand again to capital markets. Shareholders would face further dilution. Meanwhile I believe Povlsen, a silent partner, is there for the long term (famous last words lol). He's had loyalty to the brand for such a long time. Barker also tends to play long but I think in this case, he and MA are in it to make money somewhat more quickly. Barker is investing his clients money and MA is purely an opportunist who sees this as a two way win. So many people say that Mike Ashley is a man without a strategy who places random punts on stocks. Yeah right, just look at Frasers, awash with cash with fingers in so many pies. Yes he likes a punt, but they are always measured and hedged. Meanwhile, with declared shorts still hovering between 5.5 and 6.5 , the SP ain't going anywhere soon, unless someone pounces. It is only this factor which is propping up the SP.
Agreed Sj, it seems pretty obvious to us.
The SP will move north when everyone's onside and pretty damn quick.
The market just needs to believe the turnaround is occuring. Once the belief is there everyone will be clamouring on board if the SP is still this low. Co inciding with potential rate cuts should provide some big tailwinds.
The BOD just need to hit FY guidance then hit revenue growth along with EBITDA margin recovery and away we go I'd say.. great recovery play, plenty of green shoots seen both in the macro and at company level.
The media will flip soon enough, they just focus on the now and the past not what the BOD are guiding for.
Good stuff cheers :)
It's a matter of time...
Thanks for posting.
For those that can't get behind the paywall:
California-based hedge fund Camelot Capital Partners snapped up more than 360,000 Asos shares this month in a pair of share dealings worth more than £1.25mn. Camelot’s founder and chief executive, William Barker, has served as a non-executive director of the fast fashion group since September.
Prior to his formal appointment, Barker’s vehicle already owned around 14 per cent of Asos’s issued share capital. This month’s purchases take the fund’s holding closer to 15 per cent. Asos has been struggling to reduce both its debt burden and excess inventory in recent years and its share price has fallen by around 50 per cent over the past 12 months.
Founded by a then 24-year-old Barker in 2013, Camelot manages a Cayman Islands-domiciled “value oriented” hedge fund known as the Barker Partnership. Shortly after its incorporation, Barker told the IC that the fund would be “my 50-year investment vehicle”.
According to information compiled by FactSet, Camelot initially took a 3 per cent position in Asos in early 2019. The fund’s single-largest holding is in US-based online used car dealer Carvana but it also owns more than 20 per cent of electrical goods retailer AO World and a 5 per cent stake in Asos’s major rival Boohoo.
Barker’s recent share purchase is bound to be interpreted as a sign of his faith in Asos’s prospects of recovery. While that may seem like a distant prospect, there are signs things are moving in the right direction.
At the end of the first half, Asos had £593mn of unsold merchandise on its books, ahead of its full-year objective of £600mn. The company is also working to bring stock into the business on reduced lead times, thereby enabling smaller purchase orders.
Apologies if already posted.
https://www.ft.com/content/82d79450-6d3c-4d6b-9ddb-99f2f3e41527
One day Rodney…. 😀
Just a lighthearted post really.
I totally agree re institutions - particularly tracker funds. I do believe they will buy in, once the price reflects the turnaround that seems to be taking hold.
Question is KBYK… why would he when he will get a handsome amount if he delivers?
I would rather prefer to see big institutions believing into the story.
Provided the below based on my view.
2 Feb 2024 15:44
RNS Number : 9176B
ASOS PLC
02 February 2024
2 February 2024
ASOS Plc
(the "Company")
Director/PDMR Shareholding
On 31 January 2024, José Antonio Ramos Calamonte, Chief Executive Officer, was granted 481,150 nil-cost conditional awards over ordinary shares of 3.5 pence each in the Company ("Awards") under the ASOS Plc Long-Term Incentive Scheme (the "ALTIS"). The Awards will normally vest on 31 October 2026, subject to the ALTIS schemes rules and the achievement of certain performance conditions. Further information can be found in the Company's Annual Report and Accounts 2023 which is available to download on www.asosplc.com.
This notification is made in accordance with UK Market Abuse Regulations (Regulation (EU) 596/2014, as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018).
...showing what *should* happen when those sat around the top table put their hand in their pocket.
Barker, I guess doesn't really count. But it does make you wonder whether the market would appreciate and react meaningfully to a Calamonte buy.
Take note Jose; take note.
Al4x… depends on the individual sp.
I don’t think everyone would be down 90% even if the company sp is.
Patience always wins in the end.
Average is 360 so not a lot
About 80% - not a share I have averaged down on. The remaining 20% is too small to worry about and my expectations are low. Hopefully this will turn round to some extent although I'm not yet seeing any compelling evidence that that is likely to happen.
It's no secret that this stock has been trading sideways now for very nearly 12 months.. that shows a lot of stability, and is only a matter of time before it breaks out of this sideways trading range. (To the upside if we return to growth as the BOD guides, including reducing interest rates) this cyclical and other cyclical e-commerce will be poised to breakout. You only have to look at all the updates, though not great they are setting themselves up for the next growth cycle. The SPs of these aren't going down but rather bouncing about. All good signs imo.
Just curious to see how much is everyone losing on this stock %wise ?
Very expensive for anyone who has crystalised such a loss and frustrating for those who have not.
Some of us managed to get in closer to today's prices, however.
Now that the company seems to have changed its reporting to twice a year, we're all going to have to be even more patient, I suspect.
Patience is a virtue...sometimes.
Less so when a stock has declined yoy since covid by well over 90 percent.
That's some expensive patience
Yes, it is priced to fail and there is zero interest in the shares, other than from hedge funds. With no volume it is easy to these funds to maintain a stranglehold on the price. This morning is a good example.
However, it is also up to the company to continue to demonstrate that the plan is working and producing. So far, so good but great consistency is needed perhaps to convince the broader market. There also needs to be greater transparency around the plan re the debt - in particular, the refinancing of the bond.
A bid will be worth what someone is willing to pay for it. The current mkt cap suggests failure so basing that as a starting point is a waste of time. This could be worth £12 plus next year without a bid if the turnaround continues which I believe it will. Asos is also down to these levels due to the amount of shorts, they will have to close at some point and I'm sure some will be thinking about it soon with falling interest rates and an improving economy etc. Barker is increasing too which is a good sign.