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Paul Scott of Stockopedia was very sceptical after last profit warning. He said he would only look at it @40p. It was over 70p so he’s been directionally right so far. I think that low is too extreme. I am however concerned it will continue to test new lows. They spooked the market with FY profit projection of £6.6-6.8m. Given first half in bag do the Bslsnce to achieve numbers -that’s likely to be a material crash in % margin. Retailers will continue to be battered until Brexit worked through. Personally I think there is value here but momentum & mood certainly is not there for a niche,High st ,formal menwear clothing co. Have they been caught out by trends ? I don’t think they will cut final dividend so decent yield if you can stomach the short term capital hit until order restored.Is another FTSE dip likely before next results ? If so next mkt spook might be a time to buy.
Billed as a profit warning in newspaper headlines. By definition it was one BUT in real terms was blowing the froth from overfilled pint glass. Of course sentiment towards retailers is adverse, more so bricks and mortar boys. They haven't been niche in 8 years or more. Have a walk in. Apart from a few which haven't been refitted they tend to look like a mini Prada shop. That's the modal format. And the prices range from bread n butter for above average quality to very reasonable for high quality own brand. They offer a personal fitting service if you want a kind of bespoke. Then they have discount outlets: little sheds clearing unwanted stock on a region to region basis. They cultivated the best of local managers which took years on a local level throughout the country. If you visit enough shops you'll find happy motivated staff who've been there for years.
No disrespect to Scott. Would be inclined to be more interested in what Tony Shiret & Clive Black have to say, particularly the former.
They are right on trend both sides of the business. Read the RNS's. They have a progressive dividend policy and sticking with business strategy including capital expenditure converting the last few to the new format shops. They are also in predominantly prime retail positions.17m in cash and net debt free. So clearly the balance sheet is highly robust and the board expect it to remain so. 40p is silly talk. Was I directionally right when I sold both sides of previous tax year circ £1 a share or was I directionally wrong not to sell at a higher price 3 years earlier instead of holding, collecting massive dividends and selling when I did primarily because I saw the general market issues were potentially going to erode paper profit short and medium term? The answer is that hindsight is a wonderful thing and so to use that to consider if someone's opinion based on events that have taken place rather than, FORESIGHT, is a bit of a spin really. Not saying that was your intention but it is what it comes down to. I would be surprised if a UK retailer were to bid for them but not so surprised if Hugo Boss came along with a cash offer. This is one that is long past oversold at 70p. All my opinions of course.
Agree that there is long term value here. You make an excellent point on quality of their sites. Nevertheless in the short term there seems little to stop share falling further. What could be the bottom ? Paul Scott has proved shrewd on predictions in the past. When sales decline ( & surprise the market) & margins also under pressure there can be an over reaction.When this coincides with market volatility great chance to prosper. It’s dipped under 55p hence my question. We will see.
Andreasban , Very much agree .
Can’t believe my luck getting in under 44p. Appreciate a kick in the teeth for existing shareholders but this niche, high st player is way undervalued in my opinion. Worst case I see it worth at least double. Now sit on my hands with a still tidy divi even after cut.