Member Info for iwantmorecoffee

The former CEO Nigel Wilson is on record several times being against share buy backs, technically there is no difference from the companies view if it distributes via share buyback vs dividend (providing it would be same amount there is some complicated maths around more higher future dividend payments with lower share numbers ). There is a difference from a personal tax view, it is cheaper for CGT. Though what is missing is the who buys (invests) into the company, historically it would be income or growth companies, L&G were very clear in the buy and get a set income every year.....and you wouldn't sell because you are after income, now it gets a little harder to work out......

I think that we are all in agreement that over the last few years the company has been badly managed.

I think Umar went I want to enjoy life and it's in safe hands, they have destroyed what I have built I want to make it great again - I can see that on a personal view.

Ashley is in it for himself, but so is everyone else. There are clearly massive egos at play, you don't get to the position that they are in without that (all-sides).

Boohoo have just hired a new head of investor relations......one that actually replies....why they didn't have one before says a lot......

The trouble is a lot of people are massively underwater and Boohoo have seemed to messed up the basics, there is a lot of speculating as to what the vote result means will happen, but Boohoo need a clear plan which clearly doesn't exist at the moment and that is the major problem (along with the whole losing money thing.......)

My view is that it is short term reaction that they think they need to be doing something different. I can understand the logic but it destroys margin - though they are doing that will the discounts that they are offering even on the "premium" labels. Separate off the sales into a different tab for those that want a deal - They need to get back to the basics of getting the right ranges at the right price for each of the brands/labels. Trying to add in a market place offer to that isn't going to help and will be a distraction.

Having said that by all means add/start a new younger marketplace (Debs is still an "older" brand) - even mothball Warehouse.....and use that label....but they need to sort the basics first.

We being the current board - Kumani has said that he isn't going to make an offer, and therefore wants Ashley to say the same. The point I was making was that the current board (Kumani as above) or other members as individuals until the fundraise have not bought in at these levels - They are now trying to come up with a narrative that doesn't make sense other than we want to maintain control to do what we want. I.e. The shareholders don't matter......

I completely agree with this what BOO are asking is ridiculous. Why would you want to stop a shareholder from buying more shares/make an offer for the company?

The founders have ruled out doing so (nor have they until very recently bought more shares at this level) so the implication is that they don't think it is under valued......

They seemed to be going for the line Mike is around to destroy the company and pick it up on the cheap, not the company is cheap due to external factors (plus some internal ones), we would make an offer for the group but feel that would be unfair on shareholders......

Then it should be a for - I don't think anyone is saying that both the Mike's aren't smart and capable? More they have a different agenda that could impact shareholders.

Studio retail group - Was in trouble before he got involved and they didn't get a board seat.....then the company went bust (yes he might have been disruptive but I think it is a stretch to say that Mike caused it......)

News Flash - Wheeler Dealer bloke seen buying assets for 50% off.

In other news pope is still catholic...... You get my point.

My view is that Frasers had taken the view that there would be a rebound in a number of "undervalued" online type retail businesses and that is why they had invested in ASOS/Boohoo and others. Historically they were trading at below net asset values and would recover in time (Macro improving - and sorting out post covid issues) and Frasers would double their money.

The current management and messed up big style and Ashley isn't prepared to standby and lose all his money again ala Debs previously. He won't table a bid, because there isn't a price that he would pay that means that he would get over 75% percent. Yes he might be able to get 50.1% but in practical terms there is no advantage over the 29.9% position with two board seats.

The issue is that historically there was not the volume in the shares for someone to acquire a meaningful amount (and the spread was awful - it still isn't great). The notice of the delisting, seems to have meant that a lot more shares are available either because they are forced sellers (in an ISA or part of an EFT) or the fact that they don't want an investment in an unlisted share. So yes now you can purchase shares in a company at 3p that others are willing to invest at 5p.

The previous CEO has gone on record as saying that they wouldn't do buy backs (and had a public spat with other FTSE CEO's that did this), therefore it was clear that it was all about dividend growth (being slow and consistent). The new CEO has departed from this and also announced changing the reporting structure etc.

Regardless of the "correct" treatment as income is taxed higher than capital growth it has fundamentally changed why people would buy the share.....before it was you want yield by L&G......hence the drop.

There is very little volume in the stock therefore if you wish to invest anything north of £5K, then you are likely to either have to place a limit order, wait and potentially miss out or move the price higher......The nightcap website suggests that order depth is only 100,000 share available if you paid 5p...… Effectively take it as a signal that people that know the business value the company at at least 5p per share.....and try and pick up some shares on the cheap if you can.

As pointed out it on a food cost margin they are unlikely to be able to beat an in country supplier (though travel hub stores are busy so they will get close) what has been missed is the following.

-Limited risk of choosing SSP as the supplier/tenant.

-Numerous brands available so will be able to operate multiple units on one site with lower overhead costs/labour saving which mitigates the slightly lower food margin.

-They know how to operate high volume stores/all day part offers.

-They know the sales/margins and can offer, more money to the landlords and hence win more business - Vagabond went bust due to lower sales than expected at Gatwick....

I agree something is going on in the background, and my guess is that that there is a fundamental difference in strategy and hence the fairly sudden departure. I'm going to suggest that there has been an unsolicited bid the CFO wanted to accept, but was rebuffed by the board/other executives his position is then untenable. In the same way that ASOS didn't announce BOO aren't either. I think the price action is strange.....(and this is on a fairly volatile share anyway).

The issue that historically BOO has been a growth company so the P/E was high, growth stops therefore share price re-rates, risk free rate of return has also dropped so again share price re-rates. This is before we get to the sector issues of over stocking during Covid, and massive increase in raw material costs and transport. Therefore the company share price has been absolutely hammered and understandable so.

BOO is currently being dragged down by the mess at ASOS, BOO isn't engaging with the market because it doesn't need to. The founders (still want control) so no takeover is going to happen at this price and the founders won't sell, no MBO because Carol Kane is one of the founders and the management get all the rewards without the risk anyway.

It doesn't appear that that they need funding, though the market clearly doesn't believe that statement because that is what ASOS said repeatedly and then did. You don't spend £15million on REV B if you think you have a funding problem and currently has FCF (albeit because a drop in stock days).

BOO has issues and they are clearly doing/not doing things that would help the relationship with the city, but fair value at the moment is probably around 55p given all that is going on - but there isn't an unreasonable expectation that if the ASOS update is bad tomorrow (despite their repeated guidance but PI's don't trust them) because then you can buy cheaper tomorrow so there isn't going to be much support until that update......

Currently still worth less than the book value that is held in the accounts which has been reduced again due to the right of use assets on the leisure estate.
I actually think broadly the executive team are doing a solid job, but there is little visibility on profits per segment and how many more write downs there will be on the leisure estate. Or are they being overly pessimistic on the outlook which leads to an add back of the write-downs, which just leads to an increase in share price volatility (NB: If I've read it correctly the value of the pubs is being held at a lower value than that of the freehold valuation) which is magnifying the current downside.

The original £50 million comes from the previous share award scheme, and you can debate the if that was the right value at the time but given the targets at the time and the value creation that would have come for shareholders it's broadly passes.

The issue is that that award is 8.5% of current value of company (according to the share price).....before it would have been a tenth of that....

It also rules out a management buyout, as he gets the reward for free without risk to his capital.

The issue of the re-alignment is the size of the awards and the hurdles to achieve 95p is too low for the reset, and a possible £50Million for John Lytlle at 395p is too large for a price that has already been achieved albeit briefly.

This skews the share price benefit in the favour of management when they aren't actually putting any cash at risk..... They could of course buy in at these levels.....but they don't need to be because they get it for free.