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I think debt is the real problem. If the consensus of board of 6% EBITDA margin and return to growth are going to happen and they have some chance to happen because until now the board did not give us surprises with the turnaround, the 500 million convertibles are impossible to be made from FCFS in two years. So there will be some refinancing but at what rate? Also, I think the market is more scared of dilution at these low prices then refinancing at bad rates.
They say active customers decreased to 21 millions from 24 millions (-14% almost similar to revenue decrease of 18%) because they remain with profitable ones. I think this is also a fear as the market is not sure of this if really customers leave because of less discounts and less lower priced items or because they migrate in mass in this env to low priced online retailers like Shein or wherever else.
Https://finance.yahoo.com/news/insider-buyers-superdry-likely-disappointed-072304822.html
I am invested in ASOS and I am not that happy by looking at the recent past when many ai based stock, high cap, went very well. I am -50% here. I am just debating if this is possible. I did not say this is going to happen but in my mind just came the inventory story with the big write down and I wondered whether this could be another blow with TopShop e.g.
Https://www.law360.co.uk/articles/1820007/asos-loses-appeal-for-topshop-tm-in-europe
Https://www.indiaretailing.com/2024/03/04/reliance-retail-to-bring-asos-to-india/
Https://www.businessoffashion.com/articles/global-markets/red-sea-attacks-shipping-adidas-walmart/
Https://invezz.com/news/2024/01/23/are-shein-and-temu-real-threats-to-uks-asos-and-boohoo/
Https://www.retailgazette.co.uk/blog/2023/11/asos-diversity-bonus/
I think now that the price is so low we talk how bad it is ASOS but when the price was high nobody complained about that. We could think now that we might have a chance to enter a good business (of course with ups and downs) at a attractive price. It's 0.13 price to sales at 3.5 bln revenue. If no dilution takes place again at these level and the business goes to 15% revenue decline again next year it will be still 3 billion revenue, a p/s of 0.16 ar current market cap. Even small private businesses of this kind want a p/s of 1 at sale. With a net margin of 2% we will have a 60mln net profit. Put a per of 15, although historical per was at least 20, and we get a double almost of current market cap. Of course we do not know how much the revenue might fall but we assume the board gives us the appropriate estimations.
Https://www.morningstar.co.uk/uk/news/242237/asos-stock-of-the-week.aspx