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Results Friday Sale starts Saturday Coincidence?
Heads up - Full year results for 2017 due (23rd) tomorrow morning.
What did you tell us exactly?
I promise I do not gloat or get any satisfaction from saying I told you so Well actually yes I do
...should help Next, GBP / USD basically around the same level as prior to the Brexit vote. Therefore they won't need to raise prices as quickly, which should help sales. Also, nice to see the 100k+ shares Next are hoovering up each day via buybacks. Be nice if we got below the 140m shares outstanding mark this year. ATB
Quite correct topbombing, they don't just sell their own stuff. The other half works there, so not just a 10 minute observation by someone who knows little to nothing about Next or retail in general. I'm not going to bother with the break down of costs involved to get any product to the shop floor, but to use the assumptions of cost and profit THEMANWHOCANNOT has used, leads me to the conclusion his lift doesn't go all the way to the top.
neither does next only sell its own stuff
They don’t buy anything for 50p and flog for £30. Landed cost would typically be £8 for something selling for £30
I think you miss the point As I keep trying to explain NEXT only sells it’s own stuff which they have manufactured abroad So to be fair I am guessing but an item they sell at £30 quid maybe cost them 50p but I don’t think I am far out So there 15% is not that great plus they as I keep saying sorry to be boring they are a one trick pony Debenhams on the other hand are a third party seller of big brands ok there margins aren’t as good but 3% is probably reasonable Fashion is a fickle business what was hot last week is not now but because of the range of brands Debenhams stock they will always be relevant Another thing to take into account is the rise of the likes of PRIMART now up until a few years ago they where associated with trash your average customer was a Tracy in trackies and a Hoodie hair pulled back so far into a ponytail so her eyes bulged oh and don’t forget the pushchair with baby Tyson in On the odd occasion my wife went in she took another bag in with her so she could drop the PRIMARK bag inside so nobody knew she had been there But they have re-invented themselves Good quality stuff nice stores well set out no longer like a jumble sale Now people go there ex NEXT customers with there £50quid and come out with 5 items of good quality gear rather than 1 or 2 PRIMART are set to do to NEXT what ALDI did to TESCO
What attracted you to Debenhams? Was it the falling LFL sales? Or was it the slim 3.3% profit margin for Debs vs around 15-16% for Next? Or the �276m in net debt vs only �75m in profits in FY 2017. In comparison Next has no net debt when you factor in the �1billion+ customer receivables financial asset (store credit). Sorry to be sarcastic but genuinely intrigued why you prefer Debs out of the two? I understand their share price took a hit recently - is it simply that it is cheap?
No I brought some Debs recently This is purely an observation based on my visit Investors in retailers are lucky as they can actually go and see for themselves rather than relying on the management to keep them up to speed
Are you a holder ??? and have you sold already???!!
That those who post here are seasoned investors But do they ever go shopping I ask because under protest I was dragged to the city centre by her who must be obeyed Saturday We had to go into NEXT as she had received some vouchers for Christmas I was quite taken aback by the lack of customers in the place and the amount of Sale Items still on display I remember a few years ago when people slept overnight outside the store to make sure they where first through the door and after a few days all the sale items had gone with people hoping that people would start bringing items back so they could bag a bargain Not anymore The NEXT brand is heading the same way as other iconic retailers GAP HOLISTER M&S and in a smaller way C& A There time is over there brand is no longer ( if it ever was ) a must have Agreed there profits are eye watering but only because they only sell there own stuff so something they sell at £30 quid they maybe paid a Vietnamese manufacturer 50p for so even in the sale there making a pretty penny They are a one trick pony and once people fall out with the brand all is lost There clothing brand is no longer relevant I can almost feel you all picking up your mobile saying ah but there homeware business is doing very well which on paper it is but that’s driven by the clothing brand so lose that the whole thing come tumbling down This is my opinion but NEXT in 2018 is a disaster waiting to happen I would no be surprised at a 3 Figure share price by the end of the year But like I say I could be wrong
Are you being greedy and discounting your divis. from your net profit??
I agree. For a 7bn mrkt cap, 700m profit is good going.
I still think this share is undervalued.It is going to make over £700 million pounds which is the one of the highest profits of any retailer in this country.In its sales figures it mentions full price sales to the 24th,but does not give very much mention to their special Black Friday event which was a first for the company.Remember they are one of the few retailers who do not mark down prior to the sale season and the shops this year have been very busy in the sales,so I think that there is only good news still to come from this company.
I'm kinda hoping the sp goes ABOVE £50 so I can sell at a profit!
Hi Sprinkler - you are correct. Reducing the shares outstanding by 5% is the same as increasing per-share profits by 5%. Sorry for the confusion - the profits won't rise from £705m to £740 due to buybacks, however what I was doing was showing that Next is getting a good deal by reducing shares outstanding by 5% for £300 million. It is in effect getting almost a 12% return on that money (compared with say, using it to reduce bonds outstanding and saving the 5% interest from that). In terms of how this 'new' buyback will impact profits, Next says in the statement that the buyback at a price of £45.25 would boost eps by a similar amount, so 4.7%. However, the extent of the overall increase (or decline) all depends on overall operating performance for the year. My guess would be another flat-ish year - maybe a small increase in eps? Happy to sit and wait, collect the dividend and watch management chip away at shares outstanding. Hopefully the SP stays below £50 otherwise the buybacks won't be as effective.
Hi Tomglan, sorry, I don't get that. My thinking is that the share buyback will reduce the number of shares in issue by close to 5% but not increase profits. If no figures change then the percentage of profit per share will look higher because the same profit is divided over fewer shares - the RNS mentioned the earnings per share looking better for that reason I think. In theory the benefit to the investor is that the share price should go up because the company has the same market cap and there are fewer shares in issue to divide that over. I look at it more of a way of supporting the share price. Accept I might be completely wrong! How do you see the buyback affecting (increasing) profits?
Hi - I'd like to try shed some light on the buyback logic. Here goes, so Next have £900m corporate bonds with a 5% or so coupon which is covered by £1-1.1 billion of customer receivables in the form of a credit account (approx. 20% interest). This is from their store card, basically the customers who pay on credit. So in effect a nice balancing of a financial debt with a financial asset. In regards to paying down debt, yes they could reduce the number of bonds and save 5% a year, however they could also spend £300 to increase profits by around 5% by spending £300m on buybacks (this assumes profit remains unchanged). Let's use the £705m profit figure as a guide, so a 5% increase (costing £300m) would make it £740 or a £35m increase. So a £300m outlay to increase profits by £35m or an 11.7% return on that £300m. That beats the 5% or so gained from reducing bonds a.k.a debt. Hope this makes sense. ATB
...... well at least for the short term anyway. Looks like it will be share buybacks this year though instead of special dividends. I do always wonder why they never chose to pay down debt though?
Hopefully we can all breath a sigh of relief with the RNS this morning
Figures, you'll be pleased, were not terrible, and better than Numis recently forecast ... given the increased level of hedge fund short positions in retail stocks I'll be interested to see how the market reacts today, although I suspect the reaction would have be much larger on the downside if the figures had been terrible. So it may not move the needle by much?
Interim Dividend paid today, Special Dividend paid 25th Jan. I'm just keeping my fingers crossed the figures due out tomorrow aren't terrible lol.
I mean £46