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Technicals looking strong as well.
Good chart analysis from Zak Mir…
https://twitter.com/zakstraderscafe/status/1466765792331116547?s=21
Should pick up soon I think.
For the first half of this year, results showed revenue of £40m and loss of £2.5m (due to lockdown), so to get to the full year results of £120m revs and £10m profit recently announced, they must have done £80m revs and £12m profit in the second half of this year. That, coupled with net cash of £15m, make the current £50m market cap look ludicrously low.
Good to see 4 new stores opening up in quick succession recently as well. All points towards a business that is currently booming.
I don’t think that’ll go unnoticed by the wider investment market for much longer.
We seem to be getting a bit down-at-heel again, after the glory days of a fortnight ago.
At current prices and after recent trading / profit announcements, I’d be surprised if SHOE is not a takeover target for one of the larger clothing / shoe brands.
They all trade on a P/E of around 20 (e.g. £2bn market cap for £100m profit) whereas after the recent profit announcement, SHOE trades on a P/E of 5-6 (£50m market cap for £9-10m profit).
It makes SHOE undervalued in the market by a factor of 3-4 (true value for £10m profit for industry standard P/E of 20 would equate to market cap of £200m). And that is without factoring in their £15m net cash position, which would add further strength to the valuation.
I expect SHOE to rerate up towards true value over the coming months. And if it doesn’t, I’d expect it’s larger peers to be circling in take-over attempts.
From the ONS report:
Clothing stores reported an increase of 6.2% over the month with feedback from some retailers suggesting that early Christmas trading had boosted sales. This is supported by analysis within the Coronavirus and social impacts release, which reported that the most common items bought or pre-ordered earlier than usual for Christmas this year included toys and clothes, shoes or accessories. The latest rise means clothing stores sales are now only 0.5% below their pre-coronavirus pandemic level.
More positivity around retail and especially non-food retail
https://www.bbc.co.uk/news/business-59337603
Good results from The Works this morning. Another decent read across to ShoeZone one would think.
Decent results from CARD today.
From the CEO "We continue to see improved performance of the business as customers steadily return to shopping in stores. This gives us confidence as we engage to realise the refreshed strategy and build our omnichannel offering"
I would have thought that CARD and SHOE have a similar shopper profile
I rather like SHOE's rapid growth in Digital Sales. I bought for that reason, it should prove a rewarding long term hold.
I will try that again
https://pasteboard.co/nTPYb4rOHzBF.png
In Leicester the warehouse is by all accounts very busy !https://pasteboard.co/nTPYb4rOHzBF.pngJust wish my RR would move as fast as this share
"I think you're being unduly harsh."
I somehow doubt that might be your view if the sequence of guidance had been reversed.
Cautious is one thing, but this is rather stretching 'under promise, over perform' even in these circumstances, I feel. If they simply don't know, then that's fine, they can say so. But they chose to guide distributions as being 4 years away. Then, a few months down the line, in the space of a couple of weeks they find circa £3m, of which they explain £1.9m, the balance of £1.1m found down the back of the sofa? This during a period when, in general, outlets have been closed, transport and shipping costs have escalated, supplies have been disrupted and input prices have been rising. They suggest they have been on top of that, so how come they aren't, apparently, on top of the numbers. The point I'm making is that one would like them to be a bit more on top of the numbers as it spoils confidence going forwards to think that they might not be. This would apply to any business, it's not singling out Shoe in particular.
Absolutely agree with you RetiredBanker on all points you made. The owners are careful with the way they run this business and cautious with what they have to say outside.
Many took the quietness as a sign they were going to take it private as they bought Zeus in.
I have every confidence that this company will not only enjoy the SP and Returns at pre-pandemic times but even exceed it as the pandemic has allowed them to get things in order.
I got into this in the low 50p in Jan this year (and a very heavy amount) and see no reason why this won't touch £2 a share with enough time for the transformation to the big box and hybrid retail format
NicName - I think you're being unduly harsh. I think the management here are highly competent and navigating difficult times very successfully. I also think the sp movement is more to do with momentum and speculative trading than underlying performance. I first bought in early 2018 when I thought this stock was undervalued at 160p ! Watched it rise and fall before returning to that level in Feb 2020 before Covid decimated the retail market. Thankfully I kept the faith and doubled down at prices below 60p and as low as 38p so that my average is now 66p.
I don't think when profits are in the £5-15m range on Sales around £100-180m anybody would be comfortable predicting long into the future
-how well their strategy of moving to online sales would work or
-how many Mum's & Dad's would return to stores to buy their kids new school shoes or
-how lease renegotiations might lower or raise property rentals or
-how to guess at a sensible provision for pension deficit and staff wages in inflationary times
I see a company starting to return to the conditions I first saw in 2018
When results came out two weeks ago I wrote "could easily see 180m revenue and 9m profit as a sustainable long term baseline, growing with inflation and providing a 10p annual dividend" ... I suspect the BoD were of the same mindset, but didn't want to speculate about that until they were more certain that it was going to happen
For a family run business one has to wonder how it is that they have been so far out with their guidance. In the space of a few months this has gone from no dividends before 2025, to £6.5m pre-tax profit, to £9-10m pre-tax profit.
In at 66p here. Just checking in. Looking very good!
this had a really fast rerate up in October, wtf, missed it
The upgrade is nothing to do with their trading though
Trading profit of 10m gbp when we are only just getting going again. Market cap 45m gbp with dividends going to be paid earlier than expected.
Lots of changes going on, online, closure of non profit shops and opening of new. No debt.
Not a Sexy tech share but with no debt ticks all the boxes, with a low p/e we have some excellent growth potential here
Great news. I guess when you have management owning over 50% they will perform.
Shoe you bootyful share
Been in here for several months now and very happy since the last report. Can see this increasing for sometime yet due to the cash it makes, well oiled business and dividend payments starting earlier than expected.
If only all my other covid recovery stocks performed as well...
allow 3rd party cookies and it should just happens once. Delete on closure.
Settings
Safari
Block-pop-ups.
This is for an iPhone and you simply select the “Block- pop-ups” radio button.
Similar thing no doubt if you use a PC but you will have to go into your settings and search.
Hope this helps.
To go off topic for a minute, can any of you more computer wise posters tell me how to stop this pop-up from LSE every verse end, telling me they value my privacy, when they so obviously don't? I feel like they are treading on me. I've tried all the usual. I don't really want to walk off to ADVFN.