Member Info for MSG4GO

When Boohoo recovers, they will buy it paying £500 million... similarly to PLT. This is how this family operates :)

Can you summarise it?

The broker ratings are a joke, I came to realization that they just go with sentiment... The same brokers gave Boohoo £4, £5 and some £6 price targets 1.5 years ago, all them had a BUY and they were all wrong. Of course, this isn't only with Boohoo, same with Asos, THG and with most shares out there. Also, these are professional analysts, they should know better, because the current SP correction (an euphemism of SP collapse and loosing money rapidly) is because a wider sell off in the apparel sector (inflation, disruption of supply chains, tight operating margins) and they should be able to predict it.

I'm disappointed with management, too, but with that said and as I wrote in a previous comment, even if the trading environment is challenging, if they manage to bring the admin costs down (£1 billion) by 10% (I am not talking about distribution cost or cost of sales, but purely the admin and other admin cost as stated in the annual report, basically strategic cost cutting), this will bring back an EPS of around 7p, which I believe will elevate the SP considerably.

T4G, yes this is my understanding as well and I it mashes sense for LTH (institutional) to make some money from security lending, but still I find it a bit strange that they give away their shares with only purpose to push the SP in a company that see a bright future.

Who ever wants to know better about shares lending https://www.ishares.com/uk/professional/en/education/securities-lending?switchLocale=y&siteEntryPassthrough=true#benefits

Anyway, great news, in 7 days we had two institutional investors, hopefully soon will see the BoD to add more, like in Asos, Boo, THG and ABF. Even if it doesn't push the SP massively up, it is the right signal

Great news, but is this and improvement or a strong indication that the markets are sure that we are heading to recession. Commodities prices suffer during recession.

Let's see, if the recession is going to be a curse or a blessing for THG.

One institutional client on board and an existing one increased their position. For Norges, let's hope that they are not going to sell when the SP hits 0.90.

About securities lending, isn't that strange that as retail investors, we moan about it, but we forget that actually institutional investors that hold shares in the company are completely fine with this practise to the extend they are happy to lend their shares to shorters in knowledge the shorters are going to push the SP down...

If you have taken a flight recently you would think for sure "economical crisis? What crisis?" I flew out of UK yesterday, my flight was at 7.30am and at 5am... hordes of people, there weren't enough seats at the waiting areas in the airport... The queues in Pret, Leon, Nero etc were really long... Just a bottle of water at Pret in the airport £2!

With that said, maybe this will be short lived and from autumn will be a different reality.

You realise them after they bursted... And as painful as it is, we have to realise it, it was a bubble... 85% down in a year, it isn't a correction, it is a bubble! It's not only for boohoo, same for Asos, THG and so many other...

Let's see, after the storm passes, who will survive. I am in furious with myself really that I bought the Dip at £2 but more when I bought at £1.23 and then at £1...

Serious companies survived the dot com bubble and thrived thereafter. I believe Boo will survive and thrive, but when I am thinking my initial entry of £3.4, my average of £1.7 and that that the SP needs 240% upside just to break even, makes me really depressed.

A company goes bust only if it cannot pay its debts. Simple as this.

Boohoo has very low debt, just 100 million, which means very low interest payments that will be able to manage quite well.

The question here is though, if they are going to raise more money with shares to support their expansion strategy.

Maybe all the 3 are down, but for both THG and Asos there were director buys recently... Let's see in Boo when the Kamanis and the rest of BOD are going to decide to put their hand in the pocket and buy some shares.

You are right PP1 actually the Economist has an article discussing about it at the beginning of June https://www.economist.com/finance-and-economics/2022/06/02/the-return-of-the-inventory-cycle

Ultimately the success of Boo and Asos based on just-in-time production avoiding investing on big inventories. The current environment isn't supportive however for this successful model

Yes, but what about the "Other administrative expenses". I look directly at the annual report and the "CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME" (pg 54)
https://www.boohooplc.com/sites/boohoo-corp/files/2022-05/boohoo-com-plc-annual-report-2022.pdf
Under their notes, there is some generic information what they mean admin expenses, but I couldn't find a great detail of breaking down of the "other admin expenses" this cost.

If anyone has more insight on what costs capturing under this, please share.

Central Banks want to rise unemployment, because in this way they can manage inflation. Tight labour with high inflation pushes wages up.

Many focus if people will keep buying clothes and if Boo or Asos revenue will keep growing, personally I would be fine if during this period the revenue decrease a little bit as long as the admin costs decrease considerably. Boo reported admin expenses of 1 billion! 200 million more since 2021 (it doesn't include the supply cost) If they can decrease admin costs by 10% then the EPS will be back at around 7 / share which will push the SP up dramatically. To put it into perspective and for comparison Asos has 4 billion revenue with 1 billion admin cost

A year ago, I can understand why we were wondering about the fall of the SP and we were discussing the unethical practises of shorting etc, but a year forward, it seems the SP of Boo, Asos were more like birds in mines... Indication of the sell off that is happening now in almost every sector.

Here is a question though. Would a recession recession be good or bad for Boo? The probability is high for recession in US as well as in UK.

For the short term I believe will be bad and will affect the SP negatively, but in mid term and if Boo has enough money to navigate the storm. even if the revenues slow down, the profitability will improve, because the inflation will be handled and also because of the unemployment , the cost of labour will go down.

Anyone has any thoughts, how an announcement of Recession in US and/or UK, will impact boo?

I don't think it is impossible or just wishful thinking. If they manage to improve their operating margin and the exceptional items were truly exceptional, Boohoo will return to previous levels of profitability.

The Property, plant and equipment is 349.2 up from 141.6, this is 205... We have another 70 million that are missing. For me the most worry part is that the Total current assets are 460.7 while the total current liabilities are 461.7. Let's hope that they will manage to sell all of this inventory that they have built with a good margin, burn less cash and lower the admin costs.

With that said, I am not an accountant, but doesn't come as a surprise why kicked out Neil. Boohoo, except the growth, had a healthy balance sheet (and the reason I invested to it) but I think there are some worry signs now. With current ratio just below 1 means that the company doesn't have enough liquid assets to cover its short-term liabilities.

Maybe last year, was a bad year and we will better management this year and better returns.

https://www.boohooplc.com/sites/boohoo-corp/files/2022-05/boohoo-com-plc-annual-report-2022.pdf
page 54

A small correction. Net assets are 464.3 down from 472.5.

Even if the non current assets in the period were increased from 292 to 537 million, the cost of the inventory increased from 144.9 to 279.4 (which makes sense due to supply chain problems) and the 100 million debt they took.

At the start of Boo financial year, they had cash of 276 million and no debt and at the end of the year they had 101.3 ( 100 million debt). Does anyone knows / understands where 275 million where spent? I am looking at the balance sheet but it didn't make me wisher... If read it correctly, most of the money seems to have gone for "Fixtures and fittings", but what does it mean?

I don't get how these analysts generate this guidance... Just 1 year ago the same JP Morgan gave a £13 target... But instead today THG is £1.58, how did they get it so wrong? These analysts suppose to be qualified "professionals".