Short report15 Jan 2022 21:58
Don’t know if anyones seen this but some interesting points/dates coming up
https://www.shadowfall.com/wp-content/uploads/2019/01/BOOHOO_ShadowFall_Research.pdf?__hsfp=1633476931&__hssc=251652889.1.1605806919831&__hstc=251652889.acfcef3c5ca99b96cc0b9f700cf5394b.1605705555725.1605705555725.1605806919831.2
They know there stuff tho, they was first ones to discover wire card fraud
We calculate that PLT’s NCI could be due total dividends of at least £77m by FY2022. As detailed above, BOO is liable to pay dividends to PLT’s NCI in proportion to the
NCI share of PLT’s distributable reserves by February 2022.
In FY20, we calculate that c. £30.4m in dividends is due to PLT’s NCI. £3.4m of this was paid in 1H20; an 88% pay-out ratio of the NCI FY19 earnings. Meanwhile ZERO dividends
are paid to BOO’s shareholders. We’re unconvinced that this expected cash outflow is realised by the market.
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While BOO’s shareholders receive zero dividends paid out, nor any other capital returns, they may be heartened to at least see so much cash being built up on BOO’s balance sheet. On 15 May 2020, this cash balance was bolstered even further by a c. £200m cash raise. However, considering these growing potential NCI dividend pay-outs, there is a risk that BOO’s sizeable cash pile is merely sat there to later cover these potential dividends in cash.
THE BIG COST FOR THE BUY-OUT OF PRETTYLITTLETHING’S NON-CONTROLLING INTEREST (AKA THE SON OF BOO’S CHAIRMAN)? (PAGE 28) BOO announced its acquisition of 66% of PrettyLittleThing (PLT), in December 2016. The remaining 34% NCI was deemed to be used “to incentivise CEO Umar Kamani and
PrettyLittleThing’s senior management”. BOO has an option to acquire the NCI (34%) in PLT at a “market value” by early 2022.
Exactly how BOO will arrive at the valuation determinants for a “market value” is, in our view, somewhat unclear. In its original announcement BOO merely states that it would be determined by a “Big Four accounting firm”. If PLT were acquired at the average market multiples as BOO and its peers trade at today, then this cost to buy-out the NCI could be almost £1 billion. Maybe this is why BOO continues to build up so much cash and not distribute it to its shareholders?
THE £200M CASH CALL FOR....? (PAGE 30)
On 14 May 2020, BOO announced its intention to raise approximately £200m and in the event raised gross proceeds of £197.7m. Despite BOO reporting net cash of £241m as at 29 February 2020, BOO felt it needed a further £200m in order to “take advantage of numerous opportunities that are likely to emerge in the global fashion industry over the coming months.” We place an emphasis on the term “likely to emerge”, suggesting that opportunities are yet to emerge.
We find it odd that even though BOO held £241m in