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Lovely write up on stockopedia today, I Will certainly be adding more on weakness...
Look at the trades. Overwhelmingly red :(
Yes SCS up very nicely on a down day
Looks like significant chunk taken up by Huntington Management, LLC - 5.28% - hopefully good news once the market realises
Interesting analysis of the online sofa industry re SCS:
SCS ranks 2nd in visibility (up 7% yoy but down 4% against wider market)
SCS ranks 2nd in authority
High visibility and authority is a good combination to have (obviously)
There has been a 26% increase in search volume for SCS. This compares to a 16% decrease for DFS.
SCS ranks 1st for reviews with an average of 4.7 across 340,807 reviews. This compares to DFS in 2nd (average of 4.7 across 202,705 online reviews) and Sofology in 3rd (average of 4.5 across 173,720 reviews).
SCS scores 3rd for brand reach (behind DFS and Sofology), but is not in the top 5 for social scores (related to social media). DFS has 673,000 branch searches per month compared to Sofology (246,000) and SCS (201,000)
This is around the net cash level and they are doing buybacks - albeit limited though!
Sofa sales are going to suffer when the consumer tightens his belt but if the share price is right......
Good spot bobbyaxelrod - thanks.
Not saying it is a good thing but I wonder what the chances are that the BOD here will want to get involved ?!
www.retailgazette.co.uk/blog/2022/04/sofa-workshop-falls-into-administration-with-77-jobs-at-risk/
The stockapedia guys did a write up on this Monday. They hold it also, and the just was it was very cheap at 300p without the buy backs.. Good money to be made here in my opinion... GLA
SCS have so much cash they could if they liked and were allowed buy themselves at current market price and still have at least £15 million to work in the business so keep on paying those dividends and buy back more shares . Anyone want to form a consortium to buy this company out and pay a massive dividend to ourselves, someone is bound to do it.
So the dividend still works out to about 7% (not taking into account the buyback) plus 10% for the buyback, not bad. Would mean return of all your money within 4 years - not bad for a continuing non-palliative business.
re: "(hopefully suggesting the final dividend will also be increased)"
They have pretty much told us what the final divi will be:
"The 4.5p dividend reflects an anticipated one third and two thirds split between the interim and final dividend respectively. This dividend will be payable on 12 May 2022 to shareholders on the register on 22 April 2022. The ex-dividend date is 21 April 2022."
So on the face of it, a £0.09 final divi in Dec 22, UNLESS they mean a 1/3 and 2/3 split of the divi pot and the final divi pot will be split over fewer shares post-buy back. If there were 10% fewer shares and a split of the pot size (optimistic, but hey ho), then the final divi could be £0.099, but the accountant in me says work on £0.09.
I would also add that the buyback DFS announced of 25m with a market cap >500m is less than half of that announced by SCS (7m with market cap <70m). The main concern is the net loss, but also the fact that SCS sales dropped 16% versus DFS drop of 2%, suggesting they are losing market share. Once I go through the results I will have a better idea of their strategy to grow/at least maintain market share but it is hard to see how they do this (I don't think online is the answer, perhaps making a "Sofology" equivalent, flooring is good especially with 20% off carpets with any sofa purchase). With weakening UK consumer spending/sentiment expected later this week, it is uncertain that the share price will rise significantly in the short term.
The fact remains that the cash not only reflects a healthy balance sheet but is indicative of future orders (of which only the deposit has been received). I haven't yet read through the results in detail. A £7m buyback with a market cap of less than £70m is positive (surely this equivalent to a 10% yield) alongside an increased dividend (hopefully suggesting the final dividend will also be increased). The recent big director buy was at a level higher than this.
Did anyone attend the management talk?
Strong dfs update pushing this up. Im expecting our results to come stronger.. GLA
Apologies you are right.
the interim results are on the 22nd March?
Looking forward to strong figures Monday, GLA
Evraz is a gamble ScS is a genuine Value investors dream.
Feel sorry for the guy that sold here at a loss and put it into EVRAZ for the dividend, which is now cancelled. Some people should leave cash in the bank!!
Managed to pick more up at the recent lows a couple of days ago, been a good couple of days since with big rises. Crazy value here. The business is well run, with lots of positive characteristics.
Anecdotally, I went sofa shopping over the weekend and went to SCS. They have a good selection but I didn't find their showroom as nice as DFS or Sofology. The DFS sales assistant explained the existence of Sofology in terms DFS having to avoid being too much of a sofa monopoly.
One thing I found interesting was the SCS offer of "20% off carpets when you a buy a sofa". I think this is smart, given the amount of new homes being built (which often people don't want to pay extortionate amounts for "upgrades" by which they mean basic necessities). SCS also had longer waits for sofas (around 21 weeks for what seemed like most sofas, compared to DFS of 7 weeks), but SCS does have a high amount of UK based manufacturing. The sales assistant explained the reason for this wait being due to being consistently outbid for container shipping - suggesting SCS haven't been willing to pay high amounts (thus eroding their margins) and have instead opted for longer lead times. I don't know if these longer lead times create an inflated order book number (as these orders are remaining as "orders" and simply building up and not being fulfilled).
Buybacks and dividends are key here. But, even if no share price growth, the dividends are comparable to a tobacco stock without the perceived sector decline.
The worst thing would be an unwise acquisition.
Im adding on further drops. My heart goes out to the global situation, but these prices will be a gift in time.... GLA
Interesting, today was the day I bought £4k, I wonder if I bought your shares, so to say. Funny old world.
Good luck to you guys as well. I've invested the £7,800 I had left after the 4k loss from the £12k investment into EVR so see how that goes, especially with the 0.37p per share dividend to come end of month I thought I could recoup some of my losses there. However like I said good luck to you all here, and will keep checking in. - Have a nice evening.
Ps, CEOs wife spent a big chunk not long back circa 205p, brave man if he sold her a dud! GLA.