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trimmed half holding, GL to all.
I don't think anyone has a pent up demand for cheap imitation brand shoes... However the company is undervalued.
Current P/E for SHOE is around 7, compared to retail average of around 20-30.
Way undervalued whichever way anyone looks at it.
@ Castle2012 "We could see ourselves in the top LSE performer's tomorrow"
We're currently 2nd
*marker
Bloody autocorrect!
Completely agree Reswod, and as a market of this, 16-week lockdown meant H1 results were £40m revenue, £2.5m loss and net cash £4m (RNS 18 May 21). So to get to todays FY results, H2 must have seen £80m revenue, £12m profit and £10.5m increase in net cash to £14.5m. Quite some turnaround and way ahead of market expectations. This looks incredibly undervalued at current £65m market cap.
...it’s important IMO to highlight that and consider what would have been the results if shop had trade for 52 weeks. 16 weeks are not a small detail and I wonder how the result would have been on a normalized base... Impressive.
Excellent results update for a very, very well run company.
Well done to all at SHOE.
eps of 14p no bad news on freight costs...shares should pop upwards quite nicely today
Low cost is exactly the place you want to be when there is inflation... Today’s price action was caused by short term trader trying to bet on results, bad sentiment coming from US and illiquidity... Shoe Zone is easily worth 200p in the medium term IMO.
Today was a weird one, up almost 10% to down 10%. I think there's a few reasons this happened.
1. People buying into earnings and enjoying the momentum leading up to the release; they will have sold towards the end of today no matter what.
2. People buying into earnings hoping for a good earnings report and jump up tomorrow - they will tight stop losses in case things go badly in the report.
3. When the US markets opened everything dropped, this in the afternoon coupled with (1) caused the price to go negative. This along the way started triggering (2)s stop losses.
I think this is what led to such a turnaround in the price action. This isn't all bad, many who have no interest in the result but just buying the rumour and selling the news may have been shaken out today along with other just trading the earnings. Could mean more strength tomorrow however starting from a lower base, we'll have to wait and see.
I think a lot of people are selling before news as inflation outlook pretty grim for low cost retailers that rely on volume. Probably a lot safer to get back in if the news is good than to hope for the best...
Must be a leak on results !
Onwards and upwards
Shoe Zone
(Aim: SHOE), 110p
Shoe Zone is a well-known high-street brand that has emerged from the pandemic a far better business than it was pre-Covid-19. The shoe retailer has accelerated its digital offering and revenue has grown to £30.6m in 2021 from £10.6m in 2019. The board is now investing in its digital arm as well as transitioning from the traditional smaller high-street unit to bigger “box stores”, which boast much more floor space and are also more profitable. These units can stock more ranges of shoes and also require fewer staff, implying a boost in revenue per employee.
Shoe Zone is cash generative with net cash of £14.2m compared with £6.3m in 2020. We also know the business has been performing well recently as the full-year trading update on 13 October was followed by an upgrade to profits a few weeks later, on 1 November.
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The directors have increased their already weighty positions recently. Brothers Charles and Anthony Smith, the chairman and CEO respectively, own more than 50% of the stock, with Anthony holding 29.85%. This surely reflects confidence – if he bought any more stock he’d be forced to make a bid for the company (the threshold is above 29.99%).
Clearly, one big risk is further restrictions or another lockdown. Online sales are still far from the dominant source of revenue and, while they may receive a fillip in the event of shops shutting, it’s unlikely to be enough to cover the shortfall. The growth in Omicron cases is not good news for the company.
Shoe Zone is trading on a p/e of eight, which means the market currently either doesn’t believe in the company’s future potential, or its strong prospects have been overlooked. I’m hoping it’s the latter.
H1 saw revenues of £40m and a loss of £2.5m because 16 weeks of it was in lockdown. FY results are set to show £120m revenue and £9-10m profit. So for H2, £80m revenue and £12m profit. In that period, they increased net cash by £10m from £4m to £14m. H2 performance exceeded all expectations. We’ve also now had another 3 months trading since year end, in which time other retail companies have announced further big increases in revenues. All this for a company still only valued at £60m. And you’re not looking forward to the results announcement because of shipping costs?! By your reasoning every international company in the world is surely doomed. You should definitely sell all your shares and move on. Results on Tuesday, so you’ve got 2 trading days to act before the end of the world.
Well, i'm not actually looking forward to the update if I'm honest. We all know the figure is going to be around the £10m mark which is awesome. The main issue for me is the ugly freight charges that has reared its ugly head again. China-Europe rates eased for two months at the back end of last year. Now they are far higher than they have ever been and no sign of them cooling. Charges at the end of December were $14000 per container, around £11k. Just Crazy. In March last year Shoe Zone announced that container prices had gone up from £1900 in 2019, to £6500 in back end of 2020. Now they are nearly £11k. They also said they import on average 100 containers a month. Thats £1.1m of freight charges per month or £13.2m per year by my calcs going on December 2021 rates. Considering 2019 annual spend (according to Shoe zones own figures)on freight was £2.28m the 5 fold increase in this, is going to wipe out most future profits unless the freight charges cool off. Luckily, we had 100% business rates relief in the last full years accounts but we don't have full business rates relief now.
Next Plc announced their results today with 20% increase on sales than 2 years ago - and the shares dropped 3.3%!
Hopefully, there will be news on the divvie which will help I guess.
Roll on the 11th.
It was something and nothing really Kallumama.
Some retail commentator from The Telegraph (or equivalent) was talking about the plethora of retailer updates in the coming days. Charles Smith replied to the tweet saying something like 'and the main day of them all is 11th January'.
It just got me thinking that you wouldn't necessarily write a tweet like that unless the results were going to be good.
As I say, something and nothing really.
11th January.
Charles Smith, The Chairman was tweeting about it earlier in the week. It's unsophisticated analysis, but it makes me think they will be quite good!!
When is the next trading announcement due?
If results match Next Stores announcement then I believe this share will benefit with a reappraisal to 150p at least.
Does look to be warming up nicely here…
Here we go
I don't think the board have put a foot wrong this year. Has been a one bagger for some which while not blowing your socks off is quite creditable. You can't call the two new Board appointees a pair of loafers given what they have overseen this year!
It's only a matter of time before this takes off I think.
A lot of stocks have taken a battering over the last few days this is holding well.