Member Info for Likeitornot

Why price drop? Practically everyone who has ever invested in this stock (for more than a month) is nursing a paper or realised loss. The sales are from those who no longer have the capacity to hold on. Pity, as I think it will be better than average (from here) in the medium to long term. Good news is that the £50m share buyback program (which still has £25m to go) is now hoovering up shares at these lower prices.

As I feared: Rand and S African political issues weighing heavy on the top line. But operating profit in line with last year despite 8% fall in sales - which is interesting. A full 50% reduction in UK tile manufacturing costing £1.4m sounds like a big response - is this just temporary or a long term thing?

The business model is not working and they know this. Too much risk taken on in terms of wine purchasing (their stated purpose has been 'giving winemakers hope'). Also, historically too much focus on using price as the main lever to get new customers and treating the customer lifetime value cycle like some sort of machine where you feed it at the top, watch the wheels go around and out pops some money.

I think they are trying to move in the right direction with their strap line "Connecting everyday wine drinkers with the world’s best independent winemakers". This needs to be front and central to their proposition, engaging drinkers on a deeper level than before - but without being totally invested (or caught up) in the growing cycle and working capital risks.

The US is a massive market if they can find the right formula that creates value for the customer and draws them in by feeding their passion for the wine, its origin, and all the other stuff that goes with this product.

It would be interesting to read some proper analysis on the comparison of these two iconic global footwear brands. A quick look shows they are of similar size (Birkenstock slightly larger - last full year reported revenues are around 10% more). From what I can tell, Birkenstock sell around 2x the numbers of pairs (30mill), and its PBT is c.£217m vs DOCS' £160m.

Birkenstock is looking at a flotation valuation in the region of $8bn. DOCS currently sits at 'just' £1.3bn. Figure that?

The news this morning regarding current trading demonstrates that the BoD are getting on with things and making progress despite the economic position being against them somewhat. Their statements are clear and upfront. They sound like a sensible and pragmatic bunch. There's not a lot they can do about external factors, so what is important is that they are performing well within the given parameters and building a strong, well controlled business in the meantime.

I was waiting for a notification on bolt on acquisitions - which I see as one of the major positives with this company - and it is good to learn that they have identified and concluded the deal on what looks like a strong addition. I particularly like the fact that it looks relatively simple to integrate into their existing business and has a strong, profitable position in a sector where there is an immediate and sizeable market. Option to pay for deferred consideration in shares makes a lot of sense too.

I am not quite sure why DOCS is out of favour particularly. Fundamentals are strong. Shoes are certainly not cheap and there have been a few operational hiccups since flotation but their brand has a very strong following and is deeply rooted in culture across multiple customer segments, globally US, UK, Japan etc. Their adoption by independently minded younger generations of wearers means their appeal seems evergreen. The upcoming IPO of Birkenstock might provide a useful comparator. If they don't get recognition here, DOCS might do better with a dual listing? They appear to have an engaged and passionate management team and I think in time this stock price will be seen to be good value.

We want our management teams and boards to be adequately and appropriately rewarded for delivering a good result. Not everyone can be a leader at this level and to get the best in the companies we invest in we need to attract the best. A share price of £1 and good EPS growth will do nicely.

The reason there was a negative TU is because trading is poor and the expectation is that this will continue to be the case. So don’t be surprised if next TU is poor too, Christmas or No Christmas. Sorry.

I bet Mr Devlin wishes he'd waited, could have saved himself £6k?

Just watched Ian MacDonough’s LSE interview from July 2019. The thrust of the video centres on Blackbird’s fit for high end, blue chip, professional users with sophisticated tastes and requirements - and the anticipation of big licences. As BIRD have found in the years since, it is difficult to disrupt the market starting from the top.

Disruption rarely comes from offering high end customers more functionality at a high price/margin. Instead, offer a relatively basic set of functions, but with significant benefits in convenience and at a lower price. (ref. Clayton Christensen) The disrupter gains customers, not from existing users of existing products, but by creating new markets and massing new users.

So, to ask BIRD to excel in their previous strategy was too much to ask as they were in hindsight attacking the problem at the wrong end.

I am hopeful that this time round the BIRDs have done their research to identify a widespread “job to be done”, that Elevate is not over engineered in terms of functionality, and that it is an order of magnitude improvement in convenience/price for users. From what I have read so far, it actually looks quite promising.

You can 'buy a whole store' for less than £50k including stock, fittings, cash (no borrowings) and fully staffed at today's SP.

Anyone investing afresh or still holding is going to have to wait before the tide changes on this one I feel. A slower start to the current FY for sales to existing customers, no longer chasing new customers with aggressive spending, and some structural aspects to fix in the business model - things will take time to settle into the new norm and there will be the opportunity for false starts. Looking at WINE compared to other investment opportunities, not sure what this share has to offer for foreseeable future as things stand.

There were dreams of share buy backs in the recent announcement - when this is a realistic prospect (in 12 months?) it might be the signal to buy - plenty of time for the SP to drift a lot lower between now and then.

If the strategy is to acquire with shares and grow, then surely some effort first needs to be put in to building a degree of trading in the shares.

I think that update might well have been written by the person that compiles their cryptic crosswords.

Buried in the notes to the Interims announcement issued yesterday is the statement: "The Directors have confirmed that they are willing to forego fees in order to support the cash balance of the Group and will continue to monitor the net working capital position on a monthly basis".

This is commendable if it is happening. Also, the reference to monitoring the position on a monthly basis hints that they believe they have time to trade out and develop some of the research deals into full orders. The salaries of the board make up quite a chunk of their cash burn.

They can see the opportunity. In 2022 each store contributed about £88k. If the team can maintain margins and increase sales by 6%, and then add 6% more stores, group profit goes up from £5m to about £15m. Sort out online sales/costs and you are approaching £20m profit each year.

Yesterday MGC Pharma - the related company (common director in Roby Zomer) - announced a restructuring which will see existing shareholders of MGC diluted by up to 87.5%. https://mgcpharma.co.uk/investors/lse

You would think that GPL need to raise around £3m before costs if they want to have cash at least to see them through the next 12-18 months. Which with a discount on current share price, would potentially see dilution approaching 70% unless circumstances change or they go for less. Let's see.

At least I concur with their investment decision on half of the shares in their portfolio. Excellent solid value here at WRKS. If you look at the Mcap on a per store value (they have c.525 stores remember) its a no-brainer - great product strategy and positioning too.

Snog, marry or avoid?...... Sit back and watch as it promises to be an intriguing end to 2023. The whole thing is a bit opaque - how is Go Compare actually doing? - but I guess that's the marketing magic at play. This could go either way, but I fear that the pre-close statement will be speaking of a downward trend in terms of viewing stats. It looks as though they have a lot to sort out still as it doesn't look like the engine is purring yet. This will take time and might be painful.

....avoid.

Each to their own, but embracing the circular economy is the way forward as far as I am concerned. Offering a repair service should open up new customer demand rather than stifle growth or reduce the sale of new shoes. There is already a thriving market in secondhand DMs. According to their research, 40% of their US customers have bought pairs from other sources. DOCS' commitment to sustainability is impressive and will serve them well in the years to come.

If anyone has a time to watch their recent product teach-in webcast on their investor site, I can recommend it. Excellent all round from this global brand icon, and plenty of medium and long term growth in SP to come me thinks.