Member Info for joevester

People need to get over this obsession with the Boots deal. The group has 1000 global franchised stores that bring in the real money. These are the stores that made the profit for the last 20 years while there wasn't enough demand in the UK to make a profit. Yes the Boots deal will help to a small degree but it will never be more than 15% of total group sales. Serious investors need to look at the global franchisee's and what's happening. Boots is small pie.

Thanks Ricardo, good advice there.
It's easy to get caught up in the drama, I'm going to watch it a bit more before I do anything.

Here's my understanding - they have cash.

There's still £2m due from The Entertainer from the sale of the Early Learning Centre brand
The £15m from last years sale and leaseback of the HQ wasn't part of the UK administration, this doesn't even appear on the consolidated cash flow, so I'm assuming they are not booking it until 'completed'
In March this year Clive Whiley hinted at a sound cash flow position.

Mothercares headcount is now just 50 people working from Watford, the furlough cost likely to be £25k a month which is peanuts.
Just 50 people collecting franchise revenues from 1000 stores across 40 countries including, Kuwait, India, and stores across Latin America.
And of course you have the Boots tie up in the UK - once product starts hitting Boots stores later this year.

They have an interim CEO, but if they could pull a big name appointment out of the hat it would be the icing on the cake.

International sales in the 28 weeks to Oct 2019 were £102m with profit of £11m
UK sales in same period were £131m and loss of £30m

I'm not in MTC for the short run so I'm trying not to get excited right now. What does interest me is perhaps using a portion of the governments bounce back scheme to leverage an investment here. I've only ever used my hard cash with no borrowing but no repayments for 12 months? Seems like easy money. Whatever you pump in today on MTC I really can't see it being worth less in 12 months time.

Thanks Adam! That's some very useful information. I'm only in MTC because I understand the business, so it's really good to learn more about the nuances of the market itself.

Absolutely agree! I've had a scary month after getting in at 5p and then it falling! further!
I worked for them and quite frankly I thought the UK business was appallingly managed with no control over logistics, range planning or basic retail standards. The International business has always been the golden boy and now set free without the UK dragging it down I believe exactly as you do that this is very undervalued, once a few results start coming through it will start to consistently achieve a higher level. I do think this is a false dawn right now though. Good luck too!

It's clear you don't understand the current format of the business. Having ran a £7m turnover store for them I would never have touched the company while the UK arm was still attached. I got in at 5p about a month ago.
Knowing what I do, I know that the international business will power this back to 15p within a year.
New Mothercare Plc is a branding and franchise model it is not a bricks and mortar business like it was.
I appreciate you don't understand the business in the way I do, and I'm sorry you're going to kick yourself in a years time.

This is a small rally and will seep back in a few days. When it seeps back to 4.5p BUY. This is an amazing long term hold. There are so many people on here that don't understand the business. I do. This isn't the'old' Mothercare that was continually reporting falling sales and losses, This is a new Mothercare with the ****ty UK business stripped out and a lean structure based on branding and franchises in the very profitable global market. International sales have what held up Mothercare for years - the only mystery is why thy didn't cut and lose the UK business 10 years ago. Give it a few quarters of reporting after lockdown and this will be in the range of 15-20p

This reminds of the biggest gamble I never took. Next Plc in 1991 were at 7p .
Everyone wrote off Next because of high leverage but the fundamentals were good - people were still shopping and the vast majority of the stores made operating profit. This is the same with Eddie. The fundamentals look great - increasing turnover, operating costs now falling off a cliff and demand going crazy. It won't shine short term, but as a long term bet it WILL eventually get to somewhere like 50p

This is where MTC should have been years ago - disposal of the extremely poorly operated UK business (I used to run a store taking £70k per week for them) and a focus on the branding deal and international franchisee's who understand the model far better than the UK retail team ever did. Glad to see the back of the fifty pillars nonsense. Maybe this time it will be all about making hard cold cash and cornering the market - that's what I call a proper strategy.