Member Info for Hexam

Or maybe they drop it BECAUSE volume is so poor as so few are interested in this stock and are doing it to try to attract more buys? That would be the sensible approach to earning more money rather than shooting themselves in the foot which is what you are suggesting they are doing. But you keep hanging on to your conspiracy theories if it that helps get you through the day and takes your mind off the company's woeful performance.

Maybe they are simply not dropping it by enough to attract more investors?

I think the revenue is straightforward. If they sell a Boohoo dress on Debs then Debs (via the marketplace company) SHOULD see the commission (and only the commission) element though how they determine what that is on an ‘internal’ sale I don’t know.

For the brands that now fall within Debenhams (DP, Oasis etc.) all the revenue now goes to Debs - either all to the Debenham Brands company or split between that and the marketplace company (DBZ).

I wouldn’t have thought there was too much scope for bumping up the revenue without the auditors getting twitchy.

It’s the costs where they will have more opportunity to mess around if they were so inclined.

The revenue for Debenhams marketplace as a percentage of its pre-returns GMV last year was 11%. Its net profit was just £3m on £360m GMV.

So if the revenue for the rest of the business is still falling by any significant amount it would be very hard, bordering on the impossible, for Debs to make up the difference.

Debs is the shiny thing in the window with big (GMV) numbers and growth that grabs the headlines and deflects attention from the rest of the company but the successful future of BOO depends much more on its bread and butter business. Debenhams revenue and profit are not enough to carry the group on its own.

Apologies - that was before I was invested. I see that was at a price of 340p - with the current sp (or even some way higher) any significant equity raise now would make that dilution look tiny.

As you say they removed the expectation of positive cash flow so they are no longer forecasting it and their silence on any trading update suggests things aren't improving at the moment. Even if they were forecasting a positive cash flow they've missed just about every forecast for the last two years so I wouldn't exactly put much faith in their outlook.

And if you are suggesting they launch a rights issue in order to buy up distressed businesses for growth then they might not get a great reaction to that given one of the major reasons for finding themselves in the mess they are currently in is exactly from such tactics (but using existing cash/loans rather than new equity).

Where is the positive cash flow coming from? They seem some way off that at the moment (excluding asset sales).

But if they do get back to a positive cash flow why would they then need to do a rights issue?

Agreed Reardybaby but no reason to lift the share price as you seem to have implied.

They raised BOO to 21p from 20p so hardly a rousing endorsement or anything likely to get the sp moving.

Yes, all eyes are on performance except there is nothing to see as they won't release numbers (which is rarely a good sign).

"The vast majority of the £160m loss was non cash."

They still lost £100m of cash (of which £65m was through capex) and in the first six months of this year they lost another £50m cash (of which £15m was Capex). If they carry on as they have been then admin is a real threat and the fact they are scrambling around and selling things on the cheap suggests cash is tight.

It wouldn't take too much by way of improved performance to remove the threat but equally it wouldn't need performance to fall much further for them to really be in trouble.

"How much do you think they have impaired and amortized the brands already Hexam?"

Looks to be around £70m so far with about £45m to go.

The head office sale will knock at least another £20m off the profits and balance sheet. Hopefully the write-offs are finally coming to an end but there is the risk of further brand impairments if their performance remains so poor.

Southcoast brought up the metric - you brought up the comparison with other companies.

You keep trying to fight battles with everybody long after you've lost them.

I can't help but be reminded of the Black Knight in Monty Python's Holy Grail.

Like him you just make yourself look rather silly.

“If we don't need to compare to other companies why did you begin the comparison southcoast.”

He didn’t - it was you who brought in the comparison with other companies starting with Next (incidentally a much worse company to compare against than ASOS).

Any business would be in much poorer shape if its staff numbers almost double whilst its revenue is flat.

You seem to be one of these people that keeps denying a problem exists rather than working out how best to fix it.

The good thing is that (finally) BOO do recognise a problem exists and now it’s a case of waiting to see what they do about it. Part of the solution is already and will continue to be getting the staff numbers down given the fall in revenues back to where there were a few years ago but hopefully there is a lot more to the business plan/review than that (including growth opportunities not just cost control and other rationalisation).

Jambone, I do understand thanks very much as it's part of what I do for a living - but always willing to learn more.

And yes historic tax losses can have value. As I said though this value is much less the loss in value from whatever asset has been impaired so the company as a whole is still worth a lot less than what is was before. It's just that reduction in value is reduced a little by tax. And, as I also said, the company currently place no value at all on this 'tax asset' - most companies do as they believe they will make future profits to offset the losses against and can convince the auditors of this.

I think by 'actual losses' you actually do mean 'cash losses' as I suspected which are indeed different from losses used for tax purposes. The problem with that comparison is that it is just a reversal of what has happened in the past when the asset was originally given a higher value which would have then increased the tax payable (or reduced the amount deferred). So over time the assets and their impairments have netted off to zero for tax purposes. You are just seeing the reversal part now.

In any event the impairments and other non-cash losses are a red herring. The company is making significant losses anyway without any help from them and the reason is simple - there is no revenue to offset expenses (be they cash or not).

Maybe I got a lot of recommendations because posters understood what I said and believed it to be both correct and useful?

Certainly more correct and useful than the notion that the company is losing so much money (however you define the losses) just so that it can and pay a bit less tax on what profits it might make in the future. Just bonkers.

Cheers AWL. I'm not 'back' though as such as I generally only post on shares I'm invested in but just stepped in here as the claims being made were so outrageous and I thought they ought to be addressed fully by someone.

I make no comment on the methods etc and what their chances of success are as it is no longer my business since disinvesting except to say that I hope for your sake that things turn out well for you here. Good luck.

I haven't posted since I sold up a couple of months ago but still look at the board occasionally as it is amusing to see the nonsense being written. Much of it is misleading but as I'm no longer invested it's not really my concern anymore - besides most of it gets debunked by others anyway.

However Jambone you've gone too far this time with your daft comments on tax losses and what they mean.

Firstly the €9.6m loss before tax made over the last two years IS the actual losses made by the company - for companies the tax losses (or more correctly losses used for tax purposes) and the actual losses (the declared profit before tax) are by and large typically the same. Certainly in QBT's case losses have NOT been inflated with write-offs for tax purposes as you would only do that if you were paying tax (which they aren't as they are not making profits) and in any event, as I said, any write-offs are real losses and it is only the timing that might be a bit flexible and that you would try to control for tax purposes - not the eventual amount. Maybe you are getting confused between actual losses (as stated in the accounts) and cash losses though this argument is also flawed for different reasons.

Secondly the value of those losses for tax purposes is only around 20% of the losses themselves. So you are always much better off not making the losses in the first place! Just about the only thing you did say that was correct was that the losses do have a potential value (around 20%) against future profits but it is interesting that unlike most companies QBT place zero value on this as they do not show any deferred tax asset in their accounts. So not exactly confident of extracting any value any time soon?

Lastly most of the losses are not due to write-offs anyway. They totalled just over €2m of the €9.6m of losses in the last two years. So even if you claim these are not 'actual' losses (they are) the figures are still awful.

Incidentally it is interesting that you mention the court case, as one of the write-downs in the last full year accounts was in respect of that. The value they hold in respect of expected future payments receivable from the claim was reduced from €4m to €2.8m which in itself is interesting...

Apologies to others for the lengthy note but I thought it important to address the misleading idea that somehow the losses posted by QBT are part of some sort of clever tax strategy. They are not.

"Anyone got an explanation?"

I for one simply don't care. If I came up with a theory it would be just as half-baked as all the others - especially if I used buzzwords and phrases like 'algos', ''volume', 'fake drops', 'gone NT', 'more buys than sells', blah blah blah.

To me it just doesn't matter. It's just daily noise and whatever the explanation the impact on price is but just a tiny drop in the ocean compared to the value destruction caused over the last few years. Perhaps a penny or two of today's price can be explained by some nefarious acts by some unscrupulous people within the market. So what even if that were true unless you're a day trader? The rest, if not all, of the fall is simply down to the awful company performance turning a decently profitable business into a heavily loss making one and as yet with no 'credible plan' to recovery.

If the business starts performing then so will the share price. It's not rocket science. Until that happens the price will languish or fall even further - unless of course there is some bid activity or similar which could give many of us a welcome escape route.

In the meantime if you want to focus on idiotic conspiracy theories that might look after the pennies then knock yourself out - I'll focus on the business which is where the pounds will come from (and with any luck whoever IS in charge of this shambles will be doing the same and doing it much better than in the last few years).

“SCB is one of the few holders actually talking sense and not blindsided by the current BOD.”

Blimey, I’ve just unfiltered SCB to see if this was really true and it to my amazement it is - and then some! Not sure when this road to Damascus moment happened exactly but can’t argue with anything he is saying.

Will be particularly interested in the response to the ‘fake drop’ question as was going to ask that one myself…

@Crawshaw - Been where you are standing so many times with this character. No matter how clearly you break it down (you shouldn't need to by the way as it was obvious what you meant to anybody not simply wanting to pick an argument) he won't budge. I gave up trying to debate with him as it just ends up clogging up the board and distracting from other, more sensible debate. Your choice though...