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....seems underway given today's latest announcement.
Think this might appeal to a private equity outfit. Run down the leases and sell it to debenhams who could strip out a lot of the operating costs.
I just noticed the big trade of 500,00 go through.This share price has fallen too much over the last year and is a good and strong company making good profits.their last update was most probably too cautious.This hammered the shares and I do not think it will be long till there is a substantial rise in this share.It also could be ripe for a takeover.
Got some at 51p a few days ago. Looks like paid too much as it's now 48.5p . Risky sector but it seems to me moss is a better option in a bad retail sector. Who knows - low bebt a plus. We will see. If it goes well it goes over £1 again in 6-12 months time.
Took me a while to decide between this, marks, mothercare and debenhams and opted for this. I will check it in 6 months.
I think sellers are gone imo
Ev 34m Vs 46mcap, operative cash flow 12m, dividend 8pc cover 1.33 times. No big debt issue. I think is good they cut the dividend to protect balance sheet. It showed that manager are wise and not like carillon.
Many of the costs of sales are fixed so a 50% drop in sales will have a disproportionate effect on the margin.
In fact, quick back of a fag packet calculation - last time they did 127 million in sales, which resulted in 78 million of gross profit. If the supply problems knock sales down by say 50% for 6 months, that would mean they need to fund almost a 20 million shortfall in gross profit, so that 34 million in the bank might well end up being less than 15 million, and maybe even less than that. Then you're probably looking at more like 15p to 25p per share.
I'd guessed the price would drop more once the results were released and was looking to buy back in because I thought it'll be well underpriced then, especially with all the cash in the bank, but this supply chain issue is what's worrying me too. If they lose 6 months of sales there might not be any cash left in the bank and the price could fall further.
The retail sector is so poor that any negative news like today's which was mostly negative and spelling caution will be punished. Once the dust clears and bottom feeders realise that it's not going to bounce it will drop further. It does not really matter what the management saying they have done or are doing it's viewed as rearranging the deck chairs on the titanic whilst it lists heavily.
This sounds pretty bad: "Following the consolidation of the Group's supplier base in response to Sterling weakness, there have been material short-term issues with the resulting availability of stock. This stock shortfall across all categories has had a negative effect on sales in all retail channels and will continue to do so until late Spring." That's nearly 6 months of lost sales and upset customers going elsewhere. On the other hand, the balance sheet looks great....... Is the drop overdone?
Cannot understand both WGR and Tracylied.Their comments are so out of date .This company is sitting on a cash mountain and has not said that they will be making a loss.They are prudently lowering the dividend this year after saying their results are the same as the market was expecting.I am worried that with all the doomsters around some people are just hoping that shares in companies like this go down in order to get them cheap.
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.
Sconnybotland.Agree,however not sure whether the BOD can buy any shares until after easter as they are still in a closed period until last years results are published next week. Do not have any worries with regard to takeover fears as this will put the shares back up to I think just under a pound which would give the suiter a good deal and be a good exit for most shareholders
Cannot understand the reaction to todays statement.They said that the year ending Jan would be just what they said it would be ,however the current year that they are in would be lower than expected.By the way only had 7 weeks trading and two of those were affected hugely by the weather which included the weekends. Good company.I would not be surprised if they become subject to a takeover shortly as they are now very underpriced.Bought some more this morning
In the retail sector at the moment, it might be a good idea if the term TRADING UPDATE were rebranded as TRADING DOWNDATE !!
Andreasban , Very much agree .
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.
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.
No disrespect to Scott. Would be inclined to be more interested in what Tony Shiret & Clive Black have to say, particularly the former.
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.
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.