Member Info for Beo1

Disappointed that Q3 LfL has started at the bottom of the range and to a lesser extent the dividend cut.

Half of which was a special dividend, which everyone expects to go, either for Buybacks or to mitigate some of the lost FCF. and the remaining 9% only looks high because of where the SP is, not due to the dividend being to high. The dividend cover on the normal dividend is fine

Or they are android users, Android shows 1m downloads and 2k reviews. So what next?

Tomorrow? Thursday isn't it

So you booked a loss on the transaction then? As your average was 193 and you sold them 169.4. Was that really worth bragging about. FYI for tax purposes you can't look at it like that (if not in a share ISA) as if you bought them less than 30 days after you sold them then the sale didn't actually count, so be careful of that.

To wade in. EBITDA doesnt equal operating cash flow due to lease payments, but the reported drop will near as dammit equal the change in operating cash flow. The after tax cash flow will be c£75m of the £300m previous return to shareholders, so new available should be £225m so ordinary dividend is fine, and leaves £75m for buybacks or extra divident again, i agree senator is vert condescending but he is right on this one IMO

It will be customers who went elsewhere for clothing, particularly kids wear, not easy to switch back on and expect the customers to just come flooding back in just because they have availability again. They go elsewhere during the incident and realise, oh the clothes arent bad here.

Lots of positives in that update for me. Food sales up despite a period on no availability for a couple of weeks, plus probably overall less footfall for a few more weeks after. Clothing graph show recent weeks in line or better than last year, which i was a little concerned about. They will beat H2 profit YoY IMO, stores are busy and cant get the staff at the moment.

International seems a dog though!

I know

Perhaps i worded it badly. Im saying some of the new store revenue is taken from an older store, so the older store will show a LfL drop, the new store will be excluded from the LfL. The point being it was mentioned the LfL drop was due to losing market share to external factors, was trying to point out that some on this lost market share was to themselves to some degree.

I'd argue the new stores have taken some of the LfL away. Where I live literally 2 big stores within 2 miles of each other, How does that not effect the LFL of the store there 12 months vs 1 not.

To be fair, simply reviewing the margins isn't as simple as you imply. Freight costs would be apportioned across all the products that were in the "lorry" than carried it, they'll be hundreds if not thousands of SKU's in a lorry. Not all of those SKU's will be sold in the same accounting period, some will still be in stock. So you've got an apportioned cost across multiple SKU's on different GM% with some not even sold so still in stock, and the 7M cost is on over £1b of sales, so less than 1% gross margin error, that is easily lost for mix etc

Agreed, I was at screwfix (last job, not this one) and they were getting their FRS16 accounting wrong, leasing a bunch of tractor units with maintenance including and rolling up the maintenance costs into the rights of use asset value (effectively changes the timing of recognition as you hold the discount value on the balance sheet and depreciate it rather than expense the maintenance straight away as they should have done. Overstates their balance sheet and effectively their Gearing.

In the end the materiality wasn't that great for them, talking thousands of pound per month on a £2b turnover company, but if they get that wrong, what else do they get wrong.

No

It means the proceeds before the facilitator takes their cut. ITV got nothing out of this

You said you believed it was a condition of getting the nil cost options, implying he had to buy them to get the nil cost options. You are guessing and you have guessed wrong. Now back tracking, saying all you said he was motivated, which was not once use, agree you didn't explicitly use the word contracted to, but you heavily implied it.

The options he was given, will be based on Tenure / Performance etc as nearly all options are. They will want a large proportion of those options once exercised to stay in his ownership, and that will make up a large proportion of the holding they want him to keep. They may want him to buy too, but his money is his money and he is under no obligation to buy (and not at the values he did), so buying was his choice and therefor should be seen as his confidence. Granted he potentially have this options to mitigate his risk, but they are independent transactions and as such he could have just got his options and not spent his own money.

Actually giving it some more thought.

The £7m is H1, they used H1 run rates and flexed off that number for H2 forecast. H2 is seasonally more Revenue / EBITDA than H1, so if they assumed £7m more margin in H1, that would be materially more in H2 due to higher volumes. So the £7m is just the H1 and the full year impact, will be £20m+

Aren't not are.

Yes you do, the options are exercisable immediately, they will be in 3,5 years +. so his giving time commitment, he leaves before then he gets diddly squat. They will also probably be dependent on performance measures, so he's making a commitment to improve the performance.

Again, you can't legally be told to buy shares with your own cash if that the net of those 2 amounts mean you are working below minimum wage. Its the same for things like salary sacrifice for cars, if the deduction takes you below minimum wage then that is illegal.

Don't get me wrong, he will have weighed up the cost vs his nil cost options, but the purchase of the shares didn't legally have to happen. Anything written into the contract on this would make it part of his remuneration package and as such subject to employment law

They hid it in the revised 2nd quarter run rates. They previously estimated the Outlook on higher run rates, they rolled 2 issues into 1, whilst implying its down to reason 1. This is what irks me the most, how can they estimate the underlying element so wrong in 2 week, that it needed a further 33m write down (40m less the 7m)

Your just guessing. If he contractually has to buy them then yes it means a bit less. But what I've read is they expect him to hold a certain value, doesn't say when and doesn't say if can or can't use exercised options to qualify as holding them. If its the later then his buying is meaningful as he could have got the nil cost options anyway and over time fulfil the requirement. There is no way they can contractually tell someone to buy £xm (x3 average salary) of his own money upfront and get the benefit from nil cost options in 3 years time. If that contractual then it would fall foul of minimum wage, as he's basically working for free for 3 years.

Why are people so afraid of debt? There is nothing wrong with debt, its cheaper than Equity and it offers a tax shield. 700m debt for a company this size isn't excessive. if it wasn't for the reaction to cutting the dividend, it would make the most sense to buy back as many of there shares as they can. They pay over 300m in dividends per year, vs 80m loan interest (which after tax is actually only affecting the EPS by £60m, the dividends is 300m still. the higher cost to serve is by far the shareholders, not the debt