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Good to see some topping up from the two Directors that know the most.
Equally good to see some reasonable buy trades go through notably outweighing the sells and that the market responded positively......you couldn’t make it up.
I don't know about Stifel, but I think we have similar concerns about Frasers motivations and what might happen next, Ejackson. I put a couple of posts on the advf n board to that effect. Note also Fraser's niggling sales of shares during the strategic process, as evidenced by the 8.3's. Just the sort of activity that might fit with trying to stop the shareprice popping up and making an ultimate bid more expensive.
A slightly worrying scenario Ejackson and where Frasers are involved, nothing is beyond the realms of possibility. I think the board under Mr Kendrick are committed to taking Studio PLC to the next level but so much depends on Schroders. If they back the board in their vision, we should be safe but if they decide to work with Frasers then we could be in trouble. Frankly 345 pence is looking quite attractive at the moment although I accept this still significantly under values the business.
A thought.
We’re Stifel brought on board at Frasers request?
Are we being played by Frasers? They make sure all expressions of interest are dismissed but then understand where the highest bid is pitched. Let the SR run its course, dispose of Education as they publicly called upon STU to do and now paves the way to table a bid which will net down to cheap price as they accumulated their shares at vastly lower prices. Let management continue to perform as they have done, reach sales of £1bn and refloat in 3 years time at a significant multiple higher than today and cash in again.
As a strategy this would reward Frasers hugely and beats MA’s usual strategy of buying a company when it’s in pre pack administration and having the headache of reinventing it.
If this is the strategy, he will probably need to get on with it as despite the SP, the Board is building turnover and profits quickly which would only mean having to pay a higher price to gain Schroders etc approval.
Thank you Skindle but that has to be worrying when you consider the latest TU and they were joint broker in the formal sale process.
If the best they can arrive at is £3.45, then I am lost for words.
Morning, the powers that be are listening to us Ejackson. Stifel has resumed coverage of STU with a price target of 345 pence.
Morning, further to our recent comment on broker coverage, I have found this hiding away in a long list of broker notes -
* Studio Retail Group Plc STUS.L : Stifel resumes coverage with buy rating and 345p PT
Interesting 1GW, thank you.
Your figure for Frasers rings true to me as I recall them selling a bit at the beginning of the 8.3 RNS being released which caught my attention.
Not sure why they did so but it would be nice to see them carry on as they have almost doubled their money on the shareholding they bought that triggered the mandatory bid.
Yesterday’s fall in the SP is mirroring what Skindle alluded to following the previous TU being issued. You can’t help but feel we are being completely played and with virtually no free float my sense is this isn’t going to get any better unless Frasers show their intention to sell down and improve liquidity.
Great post 1GW_. Thanks for your research.
One of the interesting things about Studio is the very full disclosed shareholder list. Thanks to the recent offer period, all holders down to 1% have declared, and on face value their ownership comes to more than 100%, so presumably someone like perhaps Norges Bank is the legal owner of one of the other declared beneficial owners. There is no significant short interest it appears, with Euroclear reporting only 90,500 shares (0.1%) on loan on average in March.
That means there's virtually no free float for retail investors to play in, and only any liquidity to the extent one of the existing declared holders wants to sell.
According to a trawl through the 8.3's, the last declared positions are as follows:
35.6% Frasers
20.6% Schroders
10.0% FIL
6.0% AIB
5.0% Janus Henderson
4.8% Lombard Odier
4.3% Hargreave Hale
3.0% Ennismore
2.6% Premier Miton
2.2% Norges Bank
1.4% Blackrock
1.3% Legal & General
1.2% Teviot Partners
1.1% M&G
1.1% Keith Chapman
0.6% Trustee of Fine Art Developments Employee Trust (Studio opening decl)
0.3% Phil Maudsley (director)
101.3% Total
I feel your pain Skindle and my patience has worn thin too.
I am looking at it two ways. Firstly, the company appears to be in rude health after many years of problems. Secondly there is a disconnect between this and the SP.
Having got to the first stage, which excercised much patience to see it delivered, I am minded to give PK 6 months and see what he can do to deliver shareholder value.
As a new CEO, he will be keen to make his mark and opinion will be driven by addressing the second point I have made.
Totally agree with your sentiments Ejackson. You have advocated patience but I’m at a point now where I’m not now sure what we are waiting for next now that the convertible share condition has expired and the year end trading statement has been released. Yes the final results will be published in June but we now know the basic details so what is there left to wait for. If the trading statement today couldn’t lift the share price to a new high, nothing will.
And thereby hangs the problem Skindle. His mere presence deters any rational investment.
I am at a complete loss as to why we are looking at an SP of £2.99 today. It just makes no sense.
You are also right to point out that today's pattern has mirrored the last TU. I hope the next month or so doesn't do the same.
The Board need to provide a credible explanation as to why we are where we are and the difference in today's SP and the expressions of interest that led them to determine these weren't worth pursuing.
Was it the main Board or MA's decision?
Something smells and it's time for some straight talking.
PK is planning an investor presentation so it would be sensible to start with why the SP is totally disconnected from what the numbers are telling us otherwise there is no point in doing a presentation and trying to convince us of the strategy he has for delivering in the medium term.
To the best of my knowledge, we have no broker coverage with the exception of Edison, who we pay for. I am happy to be corrected on this but where are Numis? I haven't seen any guidance from them.
New CEO, record figures, ambitious growth for the future....why aren't they screaming from the rooftops.
Again, it smells.
That trading statement was as positive as one could hope for and yet our early morning share price rally has again fizzled out. My concern is where does the share price go from here ? Will this be sub 250 pence in the days and weeks ahead ? Gone are the days of active broker coverage from the likes of Cantor Fitzgerald. One can only hope that we find ourselves a brave new investor with very deep pockets who is happy to invest despite the presence of Frasers.
‘Integrated communications provider Adare SEC has signed a three-year contract extension with online value retailer Studio Retail’
Who owns Adare? Endless, the new owner of Education. Couldn’t help but notice this link. Not suggesting anything but the tightness of parties involved is interesting. Does Endless know a bit more than most about Studio?
Elsewhere, it is annoying me why we didn’t get more binding offers given the level of initial interest. I cannot get away from MA being our nemesis in a number of ways and would value the opinion of Schroders as to what their input on value was.
Final thought, Pre tax profit of c.50m, market value today c.£260m. Go figure.
I don’t think Frasers would be vocal unless they were entirely happy with the SR to date Skindle.
They called for it in the first instance to maximise shareholder value as they didn’t like the suppressed SP and it was backed fully by Schroders.
They have a seat at the top table so will be privy to almost everything that is going on. Their silence is deafening but I believe it’s all because they are content with where it is heading and the fact that any info, leaked or otherwise, has been zero gives me confidence that we should all collectively benefit.
We will find out shortly.
I am disappointed that the trading statement has still not been released but I take comfort from the fact that our most vociferous shareholder, Frasers has not issued a public statement of complaint. I take that as a good sign.
.....and it looks like you have got your wish 1GW.
I partly agree 1GW. I have previously said that it feels to me like they are putting the finishing touches to something before making an announcement.
The TU is being used as a bit of a smoke screen. The numbers are known to them and they could easily have released an RNS per the original timings. In the meantime, with PK getting his A team in place, in particular Le Brocque committing full time and being so bullish about the future, I believe the current health of STU isn’t in question.
I am not as sceptical as you re: Fridays for RNS release.....I just want to know the facts and am not bothered which day they choose!
I would be very surprised if they slip out a TU late on a Friday - that is normally only for trying to bury bad news isn't it?
I am hoping that they have convinced themselves that "the middle of April" runs from 10th to 20th April and therefore they can leave it until Monday or Tuesday. It does feel rather as though they might be waiting for something to happen in the hope they can put it in the TU release when it comes.
The year end figures would have been known at the end of March, there is clearly something going on that is causing this delay in releasing the trading statement. Fortunately the share price is not so far dropping as a consequence of this uncertainty.
Studio will provide a post-close trading update for the financial year ended 26 March 2021 as a whole during the middle of April.
This taken from the RNS released on 30th March. I suspect we might finally see something later today after the market closes and given today’s date.
In brief terms my guess for our forthcoming trading statement is that the final quarter has been in line with expectation and that full year profit before tax will be at the top end of expectation. The strategic review is still ongoing and further information will be provided along with the release of the final results in June.
In other words nothing more than we could have been told at the end of March. The board of Studio/Findel have been using this cautious tone for years under Mr Maudesley, I wonder if it will be any different under Mr Kendrick.
Good to hear that you have invested again Ejackson. My last investment was back on the 23rd March. Under Mr Maudesley I felt comfortable increasing my holding but Mr Kendrick has undermined my confidence somewhat by delaying the trading statement. My fear is that his first trading statement will yet again promise much for the future but again do nothing to repair the significantly under valued share price. I hope to be proved wrong.
Monotonous, yes, but all we can do is examine what we believe to be going on and decide on investment strategy from there.
Looking at it from a different angle, you could observe that whilst no one is buying, no one is also selling. The recent corporate appointments re: digital transformation and whilst not essentially news, the fact that PK is proceeding as CEO per the succession plan, gives me a feeling of confidence as to the overall health of the company. PK has expressed that he wants to take STU to a £1bn revenue company which won’t be lost on any potential future owner.
Results will be revealed soon and I am expecting them to be strong. The delay for me is due to the SR and it could be for any number of different reasons so probably best not to speculate. Not long to wait to find out though.
Given what is known and the total radio silence since this process started has been nothing short of incredible, I felt comfortable enough to top up yesterday as I feel that on fundamentals alone, STU is too cheap again.