Member Info for DC2007

Mike will end up getting this for pennies. It's what he's good at. Boo blunder from one thing straight into another. Wouldn't surprise me if tomorrow is the last straw that triggers some sort of mass change or capitulation.

Excoriating. Boohoo left in the doo-doo! And it's their own fault.

20s before the end of the week.

Double hurdles coming up Thursday could take a good bite out the SP. Could finally be the catalyst to take it to the 20s.

I remember Debenhams - he got burnt along with all the other small RIs. It's hardly some undiluted positive omen when he turns up; contrary to how many here want to wishfully think about it and portray as such (same goes on Asc too).

Neither Boo or Asc are likely to fly until the underlying situation for online fast-fashion improves. They'll still got a tough 12 months to endure before it might start to get better externally; depends what shape the businesses are in nearer that stage before the market might see them as worth a lot more.

Hi Newby12 - appreciate your detailed response and workings. I intended to try something similar to what you've already done in working backwards to come up with an estimated value. Like you say, it only would need to be just above zero for the statement of 'return to profitability' to be valid. Although I'd still have to question it somewhat since to me, profit is what's left after interest and tax, and depreciation and amortisation have been charged off the income statement. It really would have been good to see a balance sheet (even a condensed one) too for a picture of the new capital structure and position.

I think what they're claiming is likely the flattering perspective on the figure. Companies all normally do that to some degree; but I'm surprised how quickly market sentiment has sprang back here when this is the same BoD that a only a few weeks ago said no need for new cash at results, followed by a cash raise a few days later. Trust is hard won and easy lost; and usually a lot harder to claw back than this.

I remain cautious that this is a relief rally and it'll run out of steam.

Does anyone know what EBIT was for P3 - as in the discrete, absolute value? They don't give this in any of the report as far as I see which is frustrating as it is opaque.

If they're 'returning to profit', why not actually show a proper earnings statement? What is 'adjusted EBIT'? Far too much elliptical circularity for me.

Only good thing in the update, is that there's apparently no immediate disaster impending, no cash call, that sorta thing. That might be enough for a bit of a relief rally in the market, and of course retail mugs will pile in having seen '£20mn' profit figure in the narrative being bandied about.

But once the froth blows off, I don't see there was anything in those results to warrant a re-rate and I don't think the SP has finished its time at these levels yet.

Perhaps they'll omit it this year because they were expecting first half revenues to be quite a bit down YoY. Nothing would be helped in repeating that to the market, if nothing's changed for the better (which seems very unlikely given the macro + the recent business performance).

Agree with that Pedro. Those things are much more the relevant metrics now. Real revenues declined by about 20% in just a year. There's no convincing explanation for that, other than customers are moving away from spending with Boo. Inflation and cost of living squeeze are going no where, and for many these will yet to have really bitten yet. But that's to come and Boo don't look like they can weather that well.

On the SP at this level: if ASOS's report tomorrow is iffy in the slightest, Boo's vulnerable to visiting the 20s.

It's impossible to know how much, if any, of the RCF has been spent. The last balance sheet released was dated 28th Feb 2023 and on that day, the RCF was fully drawn down but the equivalent cash value was available to the business.

In the three and a half months since then, no outsider knows how much has been used, or not; nor can anyone know if any of the revolver has been repaid. Boo has been coy about the terms and costs of the RCF, along with any associated covenants. I do hope they display more prudence with the use of this cash than they have with spending retained earnings.

I doubt that PP: IIs will be very keen to see proper FCF from operations (rather than investment or financing) because it's such a strong indicator of a superior business - one that can pay dividends, reinvest in growth or new areas, and pay off debts. FCF is just about the grail.

Look at what FCF has done for investors in big oil/mining/pharma/tobacco/tech - the paragons in those sectors have been awash with cash for decades and can't stop it gushing from their businesses.

....generated £120M of FCF last year

Wasn't this mostly from getting rid of excess inventory? In other words, it's prettified FCF since it's not from normal sales operations and was more of a one off - basically undoing the previous mistake of being laden with slow moving stock.

If the TU has weak points then a whack to the SP seems likely, but 90p? I'd be amazed to see that and hope you don't have to deal with that prediction realised.

To make it that bad, there'd need to be more capital restructures, or cash calls, or notice of appointment of specialist advisors, etc. Any of those would finish the management's credibility and require en-masse resignation. Things surely haven't got so bad so quick since results, & equity issuance.

I agree that too much is being pinned on the US facility: I can see it becoming an overall cost instead of an earner.

For what it is, it's taking much too long to establish, and this has already cost the company in steeply declining sales.

I think the crucial results will be in lost momentum and brand damage, both of which aren't readily quantifiable. Their customer base will have simply have moved on to something else in the meantime.

By definition though, if the price is changing, trades must be happening & a daily volume of shares recorded. The question that follows: who then is doing this buying and selling if most brokers for RI won't fill orders for their small retail investors?

I dunno about such a rapid reversal. More likely might be another cash raise or other tweaks to the capital structure. £75mn at such a high rate a few days after they'd said they were fine is hard to forget: how to trust a BoD that made such a large misjudgement?

BooSos!

It's the falling revenue that's knocked this so bad. Most retail managed to keep revenues static, but Boo's sunk about 20% in real terms. There's no convincing explanation for that generally or wrt competitors.

The prospect of profit with shrinking revenues is minimal and that's what the market is pricing. Even Asos managed to hang on to revenue better.

What happened to the bidding war which was cwrtain to start Monday gone?