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That's correct. The 40m was a loan that was supposed to be paid back that would also give him rights to buy 10% of the company at 3p per share (probably by placement, diluting the rest of shareholders)
DC they said they are inline with profit expectations, that means they will make between 1-30m profit in 2019 based on their current results. They didn't issue a profit warning. The CEO also explicitly said they are generating enough cash.
Yes they do their cost savings cause they have to. Their margins dropped. They have to do a lot more cost savings to stay alive, a major one being the leases and closing down stores. So what? We know this.
I diversify, I don't sweat. Sweating means selling. Selling is almost always bad. 7% of companies get bankrupt or delisted. That's a statistic reality. Diversify enough and you don't care.
So I don't care. That said atm they are not going bankrupt untill 2021 with their current figured and headroom unless something changes a lot.
The only sweating from shareholders should be because a company of 2.2 bn revenues is at about 50m market cap and they are not buying.
This should be 20-25p easy next 3 years. Beyond that I am not sure.
Anyone who says there is lack of market update on Debenhams should look in the mirror and judge his own delusion.
Just because you are an immature shareholder that sweats every day that the stock goes down and open wine every time the stock goes up doesn't mean the world moves in your own micro reality.
Debenhams has released their strategy in full transparency, total docs of 80 thick pages (including their end of year figures) which I am sure no one here besides me read.
They replied in media speculation ensuring there was no CVA when they saw its required. They where always on time and producing high quality results presentations never skipping a day and never low quality.
You should try investing in some of the smaller (not in market cap) nyse companies , they issue a statement of any kind once per year at best besides the required by law filings, and shareholders must listen to the wind ton guess their strategy.
Debenhams current strategy as explained very transparently is excellent. No change is needed. The current management, their strategy and their transparency is one of the reasons I am invested.
The official update is supposed to be on the 10th. If they release something earlier, it will be out of scedhule.
The current price is stupidly low. No need to catch anything. Will be 5x next 1-4 years.
I also think a fair value of this share is 25p including every risk. The current price is laughable.
Debenhams already does half a billion pounds per year sales online so it's actually already one of the big players. The difference is that they started their online focus with their redesigned strategy 1.5 year ago so they have lots of online growth to do. That's the main reason I am invested in the company. They already have a proven online presence and growing online while reducing offline is their main strategy. When they reach 50/50 from 25/75 (online / offline) they will be quite a lucrative company.
It's not like the previous couple of months wheren't volatile. When a stock drops below 10p the volatility is extreme since 1p change is 10%, that's why it drops so suddenly. People buy then lose 25% of their investment in a couple of days, then sell in panic.
It's true there is something going on with this stock. People create accounts, stay awake after midnight and log in sundays to bash it.
People pleasure themselves when there is anything negative in the news and if Debenhams ever fails it will be declared a national holiday and people will be parading on the streets.
There is something going on really. There are stocks that are already proven insolvent, produced incorrect financial data or scammed investors and the posting is ten times more balanced and mature.
MA will go for a hostile take over. He will offer 9p to the BOD, they will reject then he will up to 13p then they will reject again. Then he will go directly to the shareholders (hostile) they will accept 13p and he will get Debenhams for 160m meaning he will pay an additional 110ish milion (since he already holds 30%).
And thats how MA gets Debenhams for free.
Except the bod already did a viability analysis for which they concluded that they are solvent, viable and don't need any refinancing until 2021.
It's explained in their annual results presentation in detail, published in early December, that non pub economists didn't read (since 50 pages might be too much for them), but still come up with their opinions.
Either you think Debenhams is in need of immediate refinancing or going to administration next quarter then you also think that the BOD is fraudulent.
If that is true without exceptions or special conditions there won't be any takeover bid from anyone.
Ok by "not looking years into the future" I mean he is not up to waiting g for 3 years to get it from administration.
Offcourse he's looking into the future in regards to building his empire and getting a massive market share & control of the high streets.
I dont agree that MA is looking years into the future. I think if he had a choice to buy it for 150m now (with the depts) or 150m in 2021 (without the depts) he would choose to buy it now.
The reason for that is they are building HOF from the ground up, making it the Harrods of the high street and all that. If he wants to take advantage of the synergies with Debenhams , which he definately does, now it's the time to do it. He will save this 200 in reduced costs because of the synergies and he will also do a proper work combining them. If not by 2021 Hof will always have found its way. In addition he's risking Debenhams doing a turanound which will make it impossible for him to get it below 500m
So I would place my money on him bidding first quarter of 2019.
The thing is that Debenhams already does 500m or 25% of their sales online, so they are not pure brick and mortar. It's just that next year's this percentage will rise to 50% because stores will close and online will grow.
If it was 100% brick and mortar, without a CEO experienced in online retailing, I wouldn't consider investing here.
By dying industry I don't mean that retail will stop existing. The problem with retail is that they work with very tight profit margins with debenhams having the thinnest of all non loss making companies at 1%.
With profit margin that tight any ressesion or change in consumer habbits eradicates them because being a slow moving industry they don't have time to adapt. (Leases , restocking stock losing value etc). It's been like that for retail since forever it's not a new thing.
I still think Debenhams is ok based on their financials their plan and their magasin bussines, but definately it's not a safe investment. It's high risk. Their sales are also quite strong and not dropping that much year on year, but they are not rising either.
MA spent 130 for 30%. If it goes down he will be the first bidder and buy 100% for 200ish so he loses nothing. However I don't see this scenario happening. It won't go under before 2021