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Their oversight on the debt (and it's offset with credit to customers) is our gain whilst the share price still remains low. The new institutional investors seem confident.
I'm holding until dividends return, it doesn't seem as though BWNG are planning on drawing down on the £50m coronavirus facility unless things worsen significantly in which case this could restart in FY22 (if not sooner). If the dividend returns at previous full year rate of 7.1p then this would yield 17% at today's price, I still see this as great value despite recent gains.
Be useful to clarify that Comment “the debt - people dont understand it”
Debt iis covered by the loan book.. so as Paul says, BWNG have a securitisation facility and pay peanuts interest back on this, they lend the money out to customers and receive a Healthy return
... so the debt is covered by the loan book and not your standard debt and as such not an issue but actually generates cash.
Hi Skittish, sorry maybe I should have been clearer don’t want to spread false hope. If I was in charge I’d be looking to do the buy back but as you say no indication that they’re planning to.
The interest in the securitisation facility is absolute peanuts though and the amount they’d saved on dividends in just a year or two would offset that. That being said I do agree that the debt does unfortunately put people off as they don’t understand it.
Paulof - the forthcoming AGM - 10-9-2020 - does not contain a resolution to enable a share buy back, so it doesn't look as if that is on the horizon.
I'm quite happy for them to pay down debt, as I think the headline figure does put some investors off, although I understand in itself the debt isn't a problem.
But to me less debt would mean more room to be adventurous in the future.
Bit of a critical level for the share price at the moment - up or down tomorrow?
Just to add to some other great points others have mentioned you need to remember that this was previously a huge dividend payer especially compared to the industry norm. I believe the clientele effect is why it’s currently dragging its feet somewhat.
Sure enough though dividends will return, the debt will be at a much lower level and the business will be coming out of covid much stronger than when it went in. When those dividends do return this will fly. We’ve all seen between the past announcements how quickly they have been generating cash so they can certainly return to dividends at some point without trouble.
That being said if I was them I’d definitely be considering a share buy back rather than paying dividends at these ridiculous prices, it’s an opportunity they will probably never have again. I believe they were, before lockdown was fully lifted, generating about 500k net cash a day on average so really in just a month they could be using that cash to buy back at least 1/10th of the shares and they’d then save that amount on future dividends in just a few years, no brainer in my eyes.
As sure as i can be institutions are buying again. We had Schroders and Norge bank buy big 2 weeks ago. The free float is small and shrinking. Others funds may follow as its clearly a bargain at this price. Pi,s will trade it but sooner or later this is going to be back trading 80p area.
All goes quiet for a while, with many very small trades, 5's, 11's etc and then woosh! 67 trades in less than a minute, mainly AT's, including many buys at 43p, and then a few seconds later settles back down into the 41's again.
You might think they are trying to kid people as to the real demand here.
Suspect another TR1 may arrive in the next week or so, clearly stocking up going on again.
MC, what a joyous afternoon for all Brownites up 13% and still flying! I would consider an exit for BWNG at £2.50 but if the momentum is still with online at that juncture (& it probably will be due to Covid) I'd be holding for the 500p+ mark. I think £1.20p by January 2021 is very much in play with £2.00 by next July (2021). 18-24 months for £2.50 but might come a lot sooner. Good luck, Brighty
And what is your target sell price, FatBoy? Mine probably around £2.
Agreed, my average has gone up a lot too and I think it will continue to go up. Like you guys have said it pretty much is a no brainer back Upto a quid minimum and in time we'll find out where the company is and if the SP should be higher. In the meantime, I'm adding as much as I can whenever I can trying to take advantage of that compounding effect until Bwng hits my target sell price .
Yes, news is starting to spread about how seriously undervalued our lovely BWNG share is. This was above £1.50 at the start of the year. I have no doubt that it is going back to that and much higher in the next 12 months. They are in the right place at the right time. The slides on the investor pages of the N Brown plc website are a must read for all newbies. Great management, great strategy, great online business. What is there not to like. Good luck all, Brighty
It's an absolute no brainer of a buy at these levels. Net assets £318m, profit & cash positive. It's only going in one direction. Can't believe an e-commerce business has fell this far!