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notice CRL share is down slightly at 65p.
Offer was 2 CRL shares for 3 IDP. Even a 1 for 1 offer, at c65p would probably not been accepted by the BOD.
However, other than Wardy BOD has very few shares. Maybe some of the 35p placing shareholders would be keener to explore this option
What is strange is why the approach was only RNSd today. Surely it needed to be last week as approach date was 26th Jan?
RNS put re Creighton offer of 44p made last week.
This will hopefully re rate the shares as it was rejected by the BoD.
Fair value surely considerably higher than 50p imo.
https://www.boots.com/sitesearch?searchTerm=roots%20double%20effect
the new bottles and new pricing are now available at Boots - shampoos were £9.99, now £6.99, which makes it a lot more competitively priced.
Also new ST Elixir seems to be going down well based on the reviews.
https://www.boots.com/skinny-tan-notox-beauty-elixir-30ml-10290085
Are we expecting price action to come down to the placing price?
Its been remarkably resilient
I don't know how your shares are held, but your broker / investment company should contact you for your decision when the placing is formally offered. I hold mine in a SIPP with AJ Bell so will await their electronic message.
How do shareholders take part in the 1-12 offer? Contact our brokers?
This is no surprise given the desperate position the business was in from a cash perspective having had to borrow £0.5m from a director to survive.
The shares vs cash for Mark makes sense as avoids having to pay back the £0.5m, lets hope that this fund raise is sufficient for the business to survive it these difficult times and ultimately grow.
Massively gained?
The guy has a substantial number of shares and lent the company half a million!
Should that have been for no gain?
Get a grip !
It looks as though they expect the share price to be something like 35-40p after the offer. That might be a good time for new investors to buy in but not much fun for existing shareholders. Is that how others see it?
> 1,428,571 Placing Shares to him
This means he has had 1.4m shares placed to him at a price of 35p, for a loan which was held by the company for a month...
Unless I'm missing something it seems like Mark has gained massively out of this.
He's not buying them. IDP have chosen to pay back the £500k loan using shares.
Completely separate to him buying in the placing.
Am I reading this correctly?
> Under the Open Offer, Qualifying Shareholders will have an Open Offer entitlement of 1 Open Offer Share for every 12 existing Ordinary Shares held.
So how come Mark Ward is able to buy 1,428,571 at 35p...
Seems like normal shareholders are getting ripped off while Mark will profit
Doesn't look too bad in my view - nice to see directors getting their skin in the game.
HighFive - good points.
Based on today's rns (not on LSE yet) it looks like a placing is 99% guaranteed and it looks like to raise more than £2m so Wardy can get his loan back. I will sit on my hands until this becomes clearer.
Agree i have more confidence in new BOD but this is a 'keep the lights on loan' and with lockdown not looking good the short term prospects are unclear.
I note that Joe B was dismissed and did not leave by mutual consent etc. Based on my experience unless he did anything illegal he will get paid as per his contract t&c.
In terms of tanning whilst clearly lockdown will not have helped i'm not sure if it can all be blamed on covid. July and August 2020 were almost a free for all in the UK - beaches packed and pubs & restaurants full etc. Without foreign holidays self tanning should have done quite well.
From Oct onwards every year Boots seems to changed their display layout to focus on xmas gifts so tanning products seem to get removed, therefore, sales in last 3 months of year will be very low.
Therefore such a big decline in rev for H1 indicates that UK DTC underperformed in the last 3 months as we were 3% up at the end of Sept as per the trading update.
I must admit I sold out of this share following one of Joe’s company updates last year, I took quite a loss but the guy seemed so switched off that I was worried about how motivated, or capable, he was to drive the company forward in these challenging times.
I bought back in yesterday and topped up again today, not quite back to my previous levels but I am much happier now that he has gone.
Our friend Puku (welcome to the LSE boards!) points out that the new management team still have their training wheels on however these guys look like they have strong backgrounds, it also does not feel like they are hanging around and they obviously are not afraid to make bold moves. I would have preferred they had shot Joe sooner but I guess these things take time – in my experience, if you dismiss someone with immediate effect you tend not to have to pay a severance but who knows.
Blake looks like he has a very strong background in the beauty industry, good to see that he came up the well thought of P&G route prior to moving into the SME market place. Worryingly the previous board did not seem to have any beauty experience, or any e-commerce experience – to be honest, it is probably surprising that the company survived for so long.
Ward must have some confidence in the company, he has bought a large number of new shares since he joined the board and is willing to offer a loan – you do not do that if you are unsure of a good return.
Shandy Pants – I have always followed your insight and found it useful, although we probably need to be careful about comparing the market that Innovaderma operates in and the beauty industry. Obviously IDP is mostly tanning (90%?) and that category is substantially down due to covid compared with beauty, I have only heard this as I know a marketing person in one of ST’s competitors. I believe beauty has remained resilient throughout – possibly due to people doing their makeup for Zoom calls but not needing an all over tan.
Personally, I am much more confident in Innovaderma’s future success than I was under the old regime. I think someone mentioned they were concerned about board infighting however it looks like the fight took place and the new guys won.
I am hopeful of a relatively rapid turn around in fortunes and a large bounce in the shareprice.
With Joe at the helm you must question how IDP didn't make a profit out of DTC considering this is meant to be IDP's area of expertise. When i questioned IDP's DTC strategy after YE results and suggested they needed a specific strategy for the near 1m customer database as it's clearly cheaper selling to an existing customer where you already have their details and they already like the products. Joe's reply was that the plan was to continue growing DTC revenues by growing the customer list - so essentially repeat what didn't make a profit in 2020 into 2021.
Furthermore, at the YE update we were told IDP would make a lower profit than in 2019 yet 3 months later it reported a reasonable loss - this suggests financial controls were not up to scratch.
As an aside the Hut Group (THG) has just announced good results and their beauty division was up over 60%. So despite covid it is too simplistic to blame underperformance on the virus. In fact due to IDPs DTC offering i thought we'd be in a better position to manage the virus than our competitors.
Joe’s “steady hand” sent the share price from £4 to £0.60 and less. He had to go and it is good news they have moved fast to remove him completely.
The new team (all now in the same time zone!!!) will be able to work faster and more collaboratively to help move this company forward.
It is a good company with some great products. Now they have removed the failing old leader, I am confident the new leadership team will drive value and grow the share price.
Little point having a hand on the tiller if the head doesn't have a clue about which direction to head. I have far more confidence in the new management getting us to where we want to go.
Don't know that I agree that Joe B going is not a loss. Sure, he wasn't a stellar performer, but he was a steady hand at the tiller which every company needs. Out the door goes pretty much all the corporate history, but more importantly, although the board and management (being the CEO only really, and he still has his training wheels on, as do the 2 new directors) are all here in the UK, the engine room of the company is in Oz, and some of those key employees could easily jump ship too with Joe leaving. I hope you're right, but i'm a bit concerned, particularly given the word in the release "dismissed" it doesn't look like it was amicable.
I'm sorry Muz but IMHO you are being far too generous.
On 30/9 we were told trading in H1 was 3% up to previous year so to end down by c20% takes some doing, especially as revenues rose in both US and Oz albeit from reasonably low bases.
In last H2 IDP did a reasonable job of switching retail sells to DTC, although as we now know at a loss, so for DTC to fall so sharply in the UK in the back end of the year (not peak tanning) is a concern to me.
In terms of cash not only does IDP have c£3m in inventory as per 30/6 but retail outlets will also still have inventory from last year. Therefore, the need for big manufacturing runs to meet orders will be less - retailers will need less and IDP has unused inventory. The fact that it appears cash is low, hence the need of the NED loan would indicate cash hasn't been well managed.
Joe B is not a loss - but we will be paying his salary for another 6 months - that's my point.
Covid doesn't look like it's going anywhere soon so this black swan event will impact H2. Hopefully in 18 months to 2 years IDP will be in a much better place. I am less confident in the short term
Shandy I think you are being overly harsh. It's not a great statement but there are opportunities.
It's the first trading statement by the new ceo so he is going to clear the decks and get as much bad news out as possible. Mark Ward has invested quite a bit of cash as a shareholder and is now sticking in £500k as a loan. He's on the inside. Unless he is getting a good deal re security why would he stick more money in.
Covid has understandably had a big effect but they still managed to do £4.1m. Last year was £5.1m, the year before was £3.8m, before that £4.2m. Covid completely wrecked the launch of nuthing and relaunch of roots. I imagine they will have been discounting prices so volumes may still be similar. It needs the country to be open again at Easter.
Cash, they give no figures so we will have to wait until the half year report. But it has always been a struggle at this time of year when they are building up stock for H2. Hopefully it is a short term loan. A placing might actually be good as we will have cash to start exploiting the international opportunities and can push nuthing.
I'd welcome them selling life sciences as it just seems to swallow cash that could be used to push international markets for skinny tan, charles and lee, nuthing. These seem better bets than a hair helmet and a small plastic device that looks like it should cost £10.
Intangibles seemed to be an issue with investors before . New ceo can write off chunks of the customer list intangibles and it might be more attractive to investors (after the short term paper hit). Everyone new the balance sheet was weak.
Is Joe B a loss. The company has just be bumbling along with no momentum. Lets get a proper strategy in, back it with cash and see what happens. I'd rather take the increased risk now and see if it works than a slow drawn out death.
It's going to be a bumpy 12 to 24 months but hopefully there is a pathway.
Skinny tan sales were up in Australia & US which do not have lockdowns.
That means that there is still demand for it. Once UK exits lockdowns it should be much better don't you think?
I agree the cash concern though.
re-reading the RNS and unfortunately i can see no positives.
ST is clearly struggling. Yes covid has clearly had a big impact on retail but i thought DTC would be able to soak up some of this shortfall - clearly it hasn't despite having a customer list of almost 1m customers. If ST is down from £4.4m to £3.4m that's globally, so with US and OZ up (across all products) it appears the UK was the big area of decline. As UK is our biggest market this is a concern.
No other products are producing any worthwhile revenues - Roots is down again (and may have been withdrawn from Superdrug), nuthing hasn't got going yet, C+L and Prolong are still minimal.
All product relaunches seem to have been delayed again - Roots, Growlase and Prolong in Far Eat.
Cash is now a concern. At H1 last year company had burnt through £1.6m in the 6 month period (£m down to £0.4m) and we only had £1.2m at 30/6/20 , so the cupboard will be bare based on NED having to give company a £500k loan. Surely a placing is required ASAP.
Joe B going immediately will also have a monetary impact as i suspect he was on 6 months notice so will get paid in full as will previous CEO who was pushed out by Joe only 3 or 4 months ago. Haris also received more remuneration in 2020 than he did in 2019 despite only working 4 months of year - all this BOD infighting doesn't help the bottom line.
In terms of intangibles we had £3.05 m for the customer list and for Life Science Prolong/Ergon is valued at £1.55m and Leimo/Growlase is £1.78m so over £3.4m in total.
If we were to sell off Life Sciences i would be surprised if we got even half of the value assigned to our balance sheet.
Potentially intangibles could be written down by c£5m this year.
I'm struggling to see any positives - sorry!!
Wasn't much in the way of panic selling this morning , small amounts and soon soaked up. MMs misjudged this time.