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Nit I have seen many subtle derapers in my time but you are quiet possibly the worst, sounding like you half know what you are on about while talking the stock down is as transparent as water Anyone holder confident the SP is going to the 30p range would not be as vocal, you are literally talking down your own investment. You would simply sell now and then take a new position at 30p and then shout about your actions. What you are is a shorter. In your position I would apply my concentration to this question. Do I have a stop loss ? Will it trigger in time if JD sports cross the threshold. Because if they did and it didn’t your fcuked ! ALL NIT Relies on replies to fuel his agenda he’s best blocked and ignored he’s clearly short here That’s my advice. I won’t reply again as I do not want to assist in A subtle deramp thread of messages of which will inevitably drown this board. GL
Nitbhav06, I agree that JD movement may be confusing us and we are little bit overexcited.
Regarding company's profitability year, 5 years is too far, and we are talking about a very basic retailer company where there is no complex operations or investment needed to wait such period to see any profit. The profit will come if not next FY, the following one for sure. The company is already established in its segment (16-24 yrs old), the only thing is that they want to reinforce the online channel and brand, and this require 1 or 2 years of bottom line sacrifice.
1bn of Revenues in 5 years?... I think that is a very optimistic target. There is no such plan of expansion to achieve that target in the mid term as you state.
At a growth rate of +20%, with the current margins, and considering the P/E ratio of its peer (JD), the company will be worth 1.70 GBP/share in 2-3 years.
But the key question you posted is "How is foot going to finance during the next years" ... They had the IPO Cash, but will not last forever, so I am worried for that part too. I don't think they will issue shares, as the dillution at this level will undermine even more the Makin family wealth. We must remember that there wealth was 6 times higher 1 and half year ago, and that they are the first who have the intention to bring back the price of IPO level, otherwise... what a terrific way of burning the whole family wealth. So in that sense, I am confident that they will make it, the founder already created JD in the past so they have quiet big experience in this sector.
Good luck with your purchase Nit.
Oh and JD don’t have 29% yet...what will happen to that free float when they do? How will that effect the sp?
Even though I hold there is short term challenges for Foot. Just because JD have got a 29% stake it doesn't mean everything is perfect. We will post a loss this year and our margins have to improve else the sp will collapse. JD know there is upside here but it will take time (5 years) to get us to their level.
Everyone on this board need a reality check if they think this is going to £1 this year. Why would it just because JD have acquired a stake, give me a break.
Fundamentals aren't great atm but will improve in the long term and that's why I am invested. 5 years plus Foot could do revenues in excess of £1bn however it will require significantly more capex and this should come from retained earnings however, we don't have any atm.
I am extremely confident we are going to 30p again but I could be wrong. As always dyor.
Factors to take into consideration:
- Is our market cap justified at these levels?
- Will JD buy out foot?
- How will foot obtaining funding for expansion (debt/equity)?
- Can they improve on margins going forward?
Answer the following as honestly as possible and you'll see why I think we will go back to 30p. You must remove emotion from investing. What are the facts saying. That's how to judge your investments, not on takeover rumours. Use PBT, Revenue, Bal sheet etc to judge.
Could be a stock borrower.
Nit, if your going to de-ramp at least have the decency to do it openly instead of this smoke and mirror crap that we can all plainly see. “I own shares and won’t sell but it’s going to 30p” “Our margins have been annihilated this year“ “Such a shame JD acquired a big stake in us!” Can you be any more negative against a company you own shares in? IMO you work for JDSports or Pentland and are here to aggregate genuine share holders in to selling FOOT.
If it wasn’t for said low profit margins JD wouldn’t be sat on all those shares - So positive imo - Well for the current scenario at least ! Hence why JD are playing. JD wouldn’t invest in a profitable foot asylum as they are a competitor, That would be like Churchill sending the Germans all of our spitfires during WW2 ! JD are swooping on the pray IMO
The bottom line decline is totally justified by the investment they have made for the long-term viability. Revenues are growing at a very nice rate. Once strategic investment has finished, you will see the profit again. For now, we should focus on the Sales line and the % sold through Online channel, that is the key of this company.
Remember that the IPO was made to collect cash and invest for the long-term (initial plan was to open 8 stores/year, but due to the high street retailers crisis, they have reconsidered this and now the want to re-organize & refit the current stores and invest in Online channel).
You are right saying that FOOT has his stores in front of JD, but I would say that FOOT public target is 14-24, while JD is positioned for the general public. May be JD isn't able to target effectively those youngers, and see a synergy in FOOT. I am just guessing...
I am very interested in reading official communications from both side regarding this movement.
As will our free float!
If as you claim to be a shareholder why not point out part of the reason for the loss? You seem more intent on talking the price down than anything else.
Not all positive as we are still going to post a loss this year. Our margins have been annihilated this year. We will do well in revenue terms but profit will be non existent.
Great for the shareholders though JD own the highsteeet in premier sports wear For foot to fall under that umbrella can only be a positive Pentland groups brand licensing and ownership can only work wonders for a company in the same market space Should JD take the controlling percentage the shareholders will be rewarded. Sentiment alone would see this move significantly. Interesting times ahead and only positive IMO DYOR
I was reading through JD's annual report yesterday and imo it is a world class company. They haven't even touched the US market yet so if they did pursue this, they could easily add 25% to their top line. Balance sheet is very solid also.
I was really hoping Foot could reach this potential but not now as JD the plonkers have acquired 30% so they will have a big say in how this company moves forward. Such a shame JD acquired a big stake in us!
Foot also noted a 77% decline in pre tax profits Why are JD investing in a competitor who’s profits declined as much as they have ? Hardly a great investment....... This has corporate raid written all over it. BUT who knows Please DYOR !!!!!! Vitally important !!!!!! GL.
Well you are then in asset sale or share sale Maybe JD don’t want all of the assets in play as they have mirrored stores across multiple geographies maybe they only want control, they may have encountered some kick back from current members of the board if they approached them for outright sale. This way, whether it be a hostile takeover or not they have control and voting rights, can asset strip, reduce the number of stores basically do everything the owners can without actually owning the assets in play or paying out for the company in full. Many factors at play here, from a business perspective this would be the best play for them. It’s happened many times this way on a much larger scale and will no doubt happen many times again. This next few weeks will be interesting, see how this unfolds it may well turn out it is an investment strategy, although at the moment I cannot see a justification for that play. I am on the same lines as Rahan, i hostile takeover may well be on the cards but no one will know until we know ! Exciting week ahead
Because this, imho, seems an hostile takeover. I think a friendly approach to overtake, meaning that contacting directly the board of foot to make an offer, would have been rejected and an announcement would have needed to made which would have resulted in an increase of share price.
If they want to take 30% of the Co. To then bid for the remaining, then the only way was to start building a significant position in silence - which worked well as in 2 days they accumulated 21% of the Co.
Inmho, they will accumulate until 29.9% to comply with the RNS communicated, but then they will consider further % and a bid price for the 70%.
If you transfer an asset into a trust, in this case the asset being the stock held by stated individuals, the asset is no longer in their name, therefor the people who trust the asset to the trustee do not pay any income tax on what the asset makes. The trustee is more than likely an accountant or solicitor. All fairly irrelevant but worth knowing. So the trust was settled by the looks and the stock now sits firmly in the hands of which they started out life. If any of the “family” decide to offload some stock This will fly like a rocket to the moon !
a lot of trusts are setup just to avoid tax.
6.2 ACQUISITIONS AFTER A FIRM OFFER ANNOUNCEMENT
(a) If, after an announcement made in accordance with Rule 2.7 and
before the offer closes for acceptance, an offeror or any person acting
in concert with it acquires any interest in shares at above the offer price
(being the then current value of the offer), it shall increase its offer to not
less than the highest price paid for the interest in shares so acquired.
Does this means that if JD makes an offer, they cannot offer less than 75p as this was the highest price paid by them?
From 2018 FY Annual Reporting:
NET Profit of 232 £m (which is 4.64 times FOOT Market cap.)
Debt Gearing Level 2% (which is ridiculous, meaning that they can still borrow a huge amount of millions)
NET CASH position 309.7 £m (which is 6.2 times FOOT Market Cap.)
JD Sports Market Cap. is 4622 £m compared with FOOT's 50 £m... means that JD, if they want to, they can acquire FOOT at even +100% further premium (@ £1) and still its balance sheet won't be affected that much.
So, the doubt here is not about JD's capacity to takeover this very small company, but to see what could be the alternative intentions. This is why all of us are posting a lot of scenarios here... because this movement... is veeery interesting.
Could it be that the premium has already been discounted? If we think, the trade price of 50 pence represented +100% of revaluation since its minimum level 2 weeks ago. This is my only concern, to see JD offering a ridiculous price of 50's pence for our share.... I haven't been loading and loading to only receive x2 my investment, as per my calculations, the lowest range in 3 years at current growth rate values the share at £1.60- £1.70.
This is my 6-Bagger, and I would be very dissapointed if this is sold at £0.50 or £1. I am a long-term investor.
Yeah I know I did some digging myself.
Oh well let’s see what next week brings, I think we may see another big sale of shares to JD within the next few week ??
So he’s like a financial advisor to them all?
John Stephen Riches As at 26 October 2017 On Admission Shareholder Number of Ordinary Shares % Ordinary Shares Number of Ordinary Shares % Ordinary Shares David Martin Makin 5,070,000 6.5% 6,270,000 6.0% Thomas ("Tom") David Osborn Makin 7,800,000 10.0% 7,800,000 7.5% Amy Dawn Mason 7,800,000 10.0% 7,800,000 7.5% Clare Michelle Nesbitt 7,800,000 10.0% 7,800,000 7.5% John Carruthers Wardle 5,070,000 6.5% - - John Carruthers Wardle and John Stephen Riches in their capacity as trustees of The John Wardle 2016 Settlement* 44,460,000 57.0% 36,148,866 34.6% TOTAL 78,000,000 100.0% 65,818,866 63.0% * The Ordinary Shares held by John Carruthers Wardle and John Stephen Riches in their capacity as trustees of The John Wardle 2016 Settlement are divided into three separate sub funds, the beneficial interest of each of which is held as follows: As at 26 October 2017 On Admission Beneficiary Number of Ordinary Shares % Ordinary Shares Number of Ordinary Shares % Ordinary Shares Thomas David Osborn Makin 14,820,000 19.0% 12,259,176 11.7% Amy Dawn Mason 14,820,000 19.0% 10,169,690 9.7% Clare Michelle Nesbitt 14,820,000 19.0% 13,720,000 13.1% TOTAL 44,460,000 57.0% 36,148,866 34.6% As at 26 October 2017, there were 18,700,000 B preference shares of £1.00 each in issue (the "Preference Shares"), all of which are held by Thomas David Osborn Makin, Amy Dawn Makin, Clare Michelle Nesbitt and by John Stephen Riches and John Carruthers Wardle in their capacity as trustees of The John Wardle 2016 Settlement for the benefit of David Martin Makin, Thomas David Osborn Makin, Amy Dawn Makin and Clare Michelle Nesbitt (all together the "Preference Shareholders"). The Preference Shares will be redeemed by the Company shortly following Admission pursuant to a redemption agreement entered into on 26 October 2017 between the Company and the Preference Shareholders.
Anyone??
Nit...so you keep saying. With nothing to back it up and a really questionable investing/trading approach.
I’m going to a disco see you Monday every body !! GL