Member Info for danl90

its because they are announcing the new strategy on debenhams the same day!

This set of results is less about what has been and more about the future. They now have control of Debs so a few weeks so they can start to show what is the art of the possible

come on!

The shares are having a dog time atm as management needs to set out new guidance. The entire business model is about to have a new arm added to it (marketplace) and also reselling third party make-up

Atm funds know how to value boohoo as it was but how will the new parts impact the forecast expectations
- will margins be the same?
- how will marketplace revenues work and how much to expect?
- what will thr growth rate be for marketplace?
- what margin and growth from more "plain" london brands?
- what plans will there be for a debenhams internationally?
- how will the x-sell with make up actually work? (PLT is not on debs so you've a huge missed x-sell there)

All these are huge unknowns which when you're at 40x multiple are big questions to ask. So investors will wait

Back in...a whisker above 340p

Where's rag? My "judgement" is back!

Dead right adam

Manchester there are loadssssssss of shoppers. But only one brand of bag - Primark.

Boo isn't competing with Primark - well for plain black socks maybe

The sun is shining. Beer gardens are open and people want close for the weekend and only Boo and PLT can get the "trend" items to you in time

*neither

So hopefully the market does see this as genuine audit delays

Also the BIGGEST assumption is your “relative to cashflow” on what period would you pick that cash flow? You’ve 0 idea apart from huge assumption as to what the cash flow will be from stores

“Logistical challenges” is noted in 2 RNS I can see. Either seemed to cause big falls to share price

Atm they are in breach of covenants. Headroom is not relevant. The covenants are priority. Headroom is the maximum someone will lend you. Covenants are how much you can actually have

Going concern in this instance would be the bank not saying to the auditors they def won’t call in the debt. Otherwise a bank will issue a letter of support saying they support and you’d be fine

So whilst covs are in place and the auditor isn’t sure you’ll pass them (for the next 12 months) they won’t sign

Please provide examples of a company which is doing monthly covs and got its audit report signed

There’s no assumptions on what I said they are the facts (gf and brother are auditors of listed businesses. I’ve just asked them and they said you’d need a bank letter to sign off)

So likely bank is wanting to wait

@tom - that's not true. One of the things an auditor will get as part of the audit is an assurance letter from the bank asking for their view on funding and calling in the loan. The waiver you refer to is for 1 month. Going concern is for 12 months from the date of signing. From this RNS you can tell the audit isn't signed so the 12 month clock isn't started - the waiver you refer to doesn't cover

also yes a refi was mentioned in the rns before the last one. the march one just said those conversations (ie refi) were "continuing"

I agree with the last sentence but that's exactly the point here. Atm there is not enough to get anyone comfortable to eith 1) refi or 2) sign a going concern opinion

@walter the only point you'd be yet to conclude on would be going concern (ie can the business still trade/ survive). I assume that atm there isn't enough trading data for the auditors to get comfortable with that. It also suggest the refi isn't close/ sorted

I think delaying results is bad news

this is absolute nonsense! ha

Waiting to see if this moves any lower. The ingenuity platform is really clever and accretive

Agree more and more new wins there will be great

There are so many businesses which need to get online but 1) don’t have the capex and 2) can’t wait or they risk losing out

Ingenuity is the perfect answer. They just have to make peace with hut taking a nice cut for the future but x% of something is better than 100% of nothing

Hydr you can rent offices and put £72m into revenue generating assets

What’s the return on a property? Not 25% yoy like you get from PLT and Boo

@hydr is it not a sign that this fast growing tech enabled business has nothing better to do with the cash than sleepy boring property?

https://www.glencore.com/dam/jcr:6738b004-2209-47bb-b541-6fafd3b0829c/20210216-GLEN-FY-2020-Results-Presentation.pdf

Page 23 does this for you - read of 40 and it’s based on copper being 7,815/ tonne so big upside to the number quoted on pg 23

@nohearts

Next's is very much like Hut's - it's sort of hybrid between the two (much similar to Hut)

@kallu - boo's model is mentioned in the article "full stack" this is what makes boo so valuable. They OWN the whole platform end to end - any one else who wants to compete will have to find the hundreds of millions (unlikely) and waste years and years or partner with hut and watch hut (or next) eat 10% of their entire online world forever

For me this is why owning boo and hut is great you hold both ends of the platform spectrum

https://www.thegrocer.co.uk/online/the-hut-group-how-thg-cracked-dtc/654361.article

Really good article on how Huts platform does what it does and why it’s so valuable and drives insane growth

Coke sells cans of coke - hut gets paid
GSK sells vitamins - hut gets paid
Hotel Choc sells choc - hut gets paid (hotel choc can do next delivery in US. How many £millions and years would it take for them to do this if they went alone?)

DTC is the space to be in and those with the best platforms will be the winners (boo included)

Data, logistics and tying end to end (boo does this). It’s the future guys :)

Boo’s marketplace won’t be as “sticky” as hut but will allow huge growth with little to no capex of working capital strain - so money for nothing basically when it’s set up

On Bloomberg this morning some interesting catch about big oil just spinning bits off to go “green” and how in the hands of others these assets become dirtier - so basically Ivan called it right

I know I’ve called for coal to be spun out and think AAs way is the only route that makes sense from ESG

I raise this as should glen ever get a tasty offer from the Chinese I guess we’d have to turn it down (as they won’t disclose emissions etc)

Good price rise last few days though

On the property though. It would be better invested in other than property

£72m property is worth £72m. It goes up £10m ok you made £10m so £10m extra value. This gain doesn’t pass into your EBITDA so not value enchanting on a multiple basis

£72m buying another brand which you can grow at 20% - 25%. Say a rough acquisition multiple of 15x so £5m EBITDA. Would be worth 40x on boo so your £72m is instantly worth c.£200m

Multiple arbitrage IS GODS GREATEST GIFT

Saving a bit of rent is nice but this is admitting that atm there’s nothing better to do with the cash as you’d clearly go a better value route if it was possible

Rag it’s no issue for me that you’re buying a nice car. You’ve been working longer than I’m alive. I cash equity in 3 years and I’ll have one. Hopefully then onto the next business/ cycle and then the size of the prize rockets. Or I cash all this now and buy one. So I’m not jealous we are all just at different points in our lives and I’ve still a fair future a head

Why is my judgement off? It went from 370p to only just 360p now. Seems all well so far while all my other investments went up considerably. The money from boohoo is up a lot vs the -2% here

But again me holding or not holding the shares has nothing to do with me getting it right about the Debs positioning. But on the make up point what do you think the solution will be? That’s one to ponder!

I do want to try and get back in before trading update as I think a refresh to forecast expectations will cause a rerate (it’s about forward not back)

I do think buying a property although smart on saving rent is sort of admitting “haven’t much else to do with the cash atm” which is a shame

Also after spending all that on a property and the other acquisitions there isn’t enough money left to sell third party clothing brands via the asos model (c.£300m of working capital). So I guess another query. Should boohoo go raise £300m to do the asos model?

All tough questions. Have management got it right? If you think not. Sell