Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
So in summary L5, you've no idea what the SP is gonna do.
'In line with guidance' has become a thoughtless mantra of those grasping at any straw. It's based on the fallacy that if it was going to be any different, Boo would've been obliged to say so before the update tomorrow. Nope.
The flaky reasoning is quickly exposed and rebutted with a glance at THG's update yesterday – a new profit warning that of hitherto undisclosed news about their reduced financial performance. A similar happening with Boo is entirely possible.
Hmm, the Asc update and market response are rather disconnected. Once the relief washes away, it'll fall back. It really wasn't a very good Xmas, the update at least rules out them being in trouble for now.
Asc data suggest Boo will have had a poor UK Xmas too with falling revenues & margin. Compared to other retailers who've already reported, online only outfits are struggling.
Once the dust and excitement settles, Boo and Asc will trickle back down towards their respective lows.
Aye, caught in another porky whopper. Referring to 'the list', tis true that tradey has been abusive and insulting about me. All whilst proclaiming their conduct to be impeccable.
I don't know of a word that properly captures their near unbelievable lack of even the tiniest self-insight. It must be pathological. Egocentricity isn't a trait associated with successful investment I suppose.
I don't see how it can become a massive cash generator spk. First, they have to recover all the lost sales (US revenue is sharply down YoY) resulting from putting resource into getting setup instead. That's no given.
Second, the DC is manual rather than automated. So there'll be substantial fixed labour costs, along with the sunk costs; presumably some of these met by the debt facility.
Thirdly, concentrating so much on this seems like it could be to the detriment of the core UK market where sales have already stalled.
Overall, there's been no talk of what the expected US ROI will be or the time to breakeven. The opacity doesn't do much for confidence, and that's why expectations for future earnings have become so muted and uncertain. Liberum's sceptical conclusions about FCF/earnings, & therefore therefore the capacity to pay back debt, or even a first dividend, look zbout right
The summary from Liberum sums things up well & it's how I expect Boo's finances to go over the next couple of years.
The US is going to be a white elephant that shallows cash. The concept and delivery for the US operation is going to be a costly mistake.
It's in recent RNS bulletins logo; and in the HY23 results than they drew down the whole facility. Look at the HY23 balance sheet and you'll see the debt there.
AFAIK, they haven't said how much has been spent. They weren't too forthcoming either about why they drew it down in full & what they'd be spending it on. My guess is Xmas inventory: I hope they spent wisely.
Aldebaran is right about it being nonsense that a bull market is about to start, especially in the UK. The fiscal tightening hasn't finished yet and it looks likely to be sustained at a higher level over a prolonged time. The effects of this are only just beginning to materialise in the real economy.
Contrary to what is b
repeatedly misrepresented on here, Boo ~does~ have debt. They've said so themselves, having fully drawn down all of their new £325mn revolver.
The revolver is comfortably more than 3 years' worth of Boo's best ever annual net profit. In an environment where FY23 and FY24 profit are going nowhere near that, the debt looks substantial.
This is looking setup to drop below 30p when the Xmas update lands in January. The update will have to be perfect or the SP will tank again.
Perfect updates for any retailer in such a distressed macro environment are just not very likely.
D. Only because there's no volume at these prices though & the market makers and shorts are in constant dialogue coordinating the share price slump. Nothing to do with the fragile business prospects, of course.
Not logically consistent either since tradey said again and again the shorts don't know anything more than anyone else. Why then would he champion a substantial reduction in the short position?
If shorts know nothing as he's regularly insisted, the only conclusion consistent with that premise is indifference to shorts being up OR down OR the same.
It's much better when his dafty polemics aren't on here.
CWWX is being sensible. Suckers are getting drawn into this again. Makes for easy pickings for the IIs and smart money - lather, rinse & repeat often. Easy-peasy with Boo and it's gullible band of ramping followers!