RE: Megan Markle20 May 2018 16:23
There is a need for sentiment to change in the market place (albeit this is happening slowly).. there were a number of factors which caused a near 40% share price crash (with no specific RNS around profit warning or margin error)
1. Director sell off’s rightly wrongly, it wasn’t about the sale it was about the timing - 3 occasions on results that damaged the stock badly, fingers crossed breath being held they learnt this time.
2. Large inflated share price at 2.70 when it was suffering from a meteoric rise which was making the PE valuations very very expensive, exceptional results were being factored into that price leaving the share price nowhere to go except south.
3. Issues around market perception of margins and fears that they could not be maintained.
4. A strong short attack, increasing around the dow 5% drop, which is when we saw a 20/30p drop over 3 weeks
Now.... we are slowly recovering from that place and the last few weeks have been good, the performance speaks for itself and I am hoping this week we see another rise once the PE rerate is set and we enter in q1 countdown. What can’t be argued with is that BOO have undertaken an exceptional strategy around collaboration and marketing this last quarter with exposure up and down the country. It is also perceived as the new topshop amongst younger folk and most importantly with fashion ‘of the moment’. However the future success of Boo is not in the uk but with the EU and international markets as discussed by Carol Keane at the last director / analyst phone in. Additionally don’t underestimate PLT and NG both of these have and will take the Boo model to the next level. It is unlikely that they would be sold as single entity’s as they are the insurance policy for the brand.
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