Adrian Hargrave, CEO of SEEEN, explains how the Company is now funded through to profitability. Watch the video here.
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Im my view if FY25 pans about give or take on forecast the business will be back on track but still needing to invest/expand. wouldnt surprise me in the slightly if a 2026 rights issue was annouced.
with impaired margins it would make more sense to do a RI versus take on debt to maintain the business in the medium term.
hmmm
Hey ocean - I read your post last night and this morning... My thoughts on a few lf the points...
"Need to review more closely how cash has been depleted. I see a £50M exceptional cost associated with DC closure but surely it doesnt cost them that to turns the lights out and lock the door."
It looks to me like they have kitchen sinked this year to streamline the business taking all associated costs in an already not good year. (hopefully to start this year with a cleaniish slate)
" Im my view if FY25 pans about give or take on forecast the business will be back on track but still needing to invest/expand. wouldnt surprise me in the slightly if a 2026 rights issue was annouced."
Im not sure there is that much more to invest with all the infrastructure in place, the company have said capex will be smaller as well.
" with impaired margins it would make more sense to do a RI versus take on debt to maintain the business in the medium term."
I think they will probably sell the london office to generate at least 100 million quid.
If they attempt a rights issue they will kiss good buy to large parts of their own bonus plans which are reliant solely on share price.
They have adjusted the bonus incentive scheme a second time which was voted in their favour of, but it was a narrow victory.... If they try a rights issue and a bonus scheme adjustment I feel the scheme adjustment would be a white wash "NO".
John lyttles lives are maxed out imo - no way will he get another chance of a new bonus scheme.
The business was making over double the margin on 20% is more sales in the past which created cash for organic growth
In my view the CEO has done well and set trends followed by ASOS, savage cost cutting being the big one
A slight negative net profit would also see the debt facility largely deleted
Classic rights issue stuff debt management and growth.
But yes still need to figure out where the c£100M in cash went in FY24
Im expecting this to improve better than what's forecast for this year in the market... Q1 I think will show more improvements again within the business.
It's already a 1000 staff lighter than last year also
Hi Ocean,
The £100m cash outflow you asked about is described and detailed in the report.
The actual cash flow of the operations was broadly break-even. This was £130m worse than last year almost entirely due to the inventories which went down around £100m last year (as they tightened up on this) and up nearly £30m this year (to support the US DC).
So this is the main reason cash flow is so much worse than last year.
The £100m total outflow though doesn’t come from the operations (as I said l, that was breakeven) but from capex (£65m), EBT shares purchased (£15m) and net interest and lease costs (£23m) and a few other small ins and outs. In total these were broadly the same as last year - again pointing to the change in inventory as the main cause of cash deteriorating.
FY2025 will be better because of lower capex and hopefully better operating cash flow (with lower costs and better inventory) but probably not enough to give positive overall cash flow (though just the FCF bit ought to be - as they’ve said).
By the way most of the £50m cost of closure of the DC you mentioned did not impact cash. It was mostly just a write off of the assets held on the balance sheet so just hit profit not cash. The cash cost of the closure was less than £10m.
Hi Hex
Good post as usual
Some good clarity hex, with thanks
still think its comming, the business will start to look attractive again by then and they will talk about tubo charging growth. I'd also say more competitior brands will become financially distressed and Boohoo will want them.
my only current question is how much of net cash is actually stock (a cash equivalent?
trying to get a take on how well the current debt facility will hold up in through FY25
Speaking of other brands have we heard the last of revb?
I dont think so, outright takeover planned?
Not sure we will make a move for REVB although interestingly they did mention they may look at disposing of some of the property. They also noted that beauty is doing very well, could be another huge opportunity for growth there.