The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
I agree Chilting with corner, however I’m not so sure they are yet fully conscious of the likely scenario you paint. Take Kaufland another Eastern Europe start up of Schwartz, I recently saw one of these in Poland, once an exciting ground mover but now tired and overtaken by even Danes Salling in terms of rank.
German retail in UK is worse because it’s brain drain in commercial and board leadership is so fast they are losing consistency too, and the sharp edge is too diluted. There’s a firm feeling too that the centre aisle non food is landfill and customers are now tuning into this because garages and cupboards are full of it at home.
When growth turns to flatlining it will be because they are lifting margins on back basket as you say when things improve economically, however the model with fade into normality for customers and Tesco/Mks etc will be still innovating. Relevance is hard work, and even harder if retailers don’t listen very carefully to customers and get ahead of them economically.
I expect consolidation this year in food and especially nonfood.
At some point the German retailers Schwarz and Albrecht will demand profit, they can’t keep buying market share for improved cost of goods, eventually those volume bonuses are normal. They are not making money and debt continues to grow.
The demand for improved services never stops and is expensive on the operating model, if discounters can’t make money in this climate they never will, also, the longer time goes on the more Tesco and other home retailers learn, until the USP for discounters is not distinguishable for customers or suppliers.
I expect full price sell through to be much higher for Mks than previous year.
Digital, including C&C will be outstanding!
Key will be clothing and I think Mks have done very well.
Everything points toward absolutely great pre tax profit.
The outlook is what I would focus on tho.
I assume the 13.7 m vol on Mks is linked to the 0.50% short still open under the above ‘investment’ plan. I guess a reversal before thurs
No doubt a SP squeeze before Thursday. With m-cap maintaining somewhere around 13.5X updated profit, Mks sp somewhere >300/350p, either way May’24 will cement a climb to >£8b.
Sector consolidation and Mks part in that will be short term noise, but necessary.
Ditto Carrington, the Red Sea shipping/ supply chain statement by NXT also spooked.
Agreed JJ. Additionally foreign holidays are down over same period, more mouths to feed at home.
Merry Christmas Carrington 😊 Thank you for your wishes, I hope you have a peaceful time with family and friends, same goes for JJ, Chilting and all regulars on here.
It tells me they have let a customer down twice at Christmas, once is bad but twice on the same order is sheer incompetence . From Erith too of all CFC’s
A friend of mine who lives in Kent has had an order undelivered twice!
First attempt -no driver to deliver
Second -traffic delays and too late to deliver!
I’m frankly not impressed
Merry Christmas to one and all on here, it’s been a very good year ! I hope for a more peaceful and thoughtful year ahead, where real things happen to reduce carbon emissions and we all care about what is around us.
There maybe some read across from Macy’s unwanted bid from US PE to Mks. Judging by good US open on Mks.
Although the gap up is also being filled.
With the higher investment grading from S&P comes opportunity, and M&S lower net borrowing excluding property dilapidation leases.
Balance sheet is much improved, move onto ftse100.
Latest market share published yesterday for Ocado retail.
Donington appears to be under extreme pressure and either they need to automate more to speed up or extend, more likely Ai will play a larger part for future. Strategically, Ocado retail plus Mks digital needs support, and to do this it will need a large strategic change, as it would be unwise for Mks to invest sums into any JV, full autonomy changes this.
The next Mks shift into omnichannel will involve some fairly large shift to integrate and feel wider benefits that will help it push on in multiple areas of its supply chain, whilst reducing on costs on the business model.
Https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3092650
Marks & Spencer's credit rating has been upgraded from "junk" to "investment grade"
Marks & Spencer’s credit rating has been upgraded from “junk” to “investment grade” as the high street stalwart’s turnaround propels it back into the ranks of the UK’s top-flight companies.
Ratings agency S&P upgraded M&S to BBB-, the bottom rung on its investment grade rating scale, citing its strong sales growth and a £1 billion cut in debt over the past four years.
An investment grade rating will enable M&S, led by chief executive Stuart Machin, to borrow at lower rates of interest and attract a broader pool of debt investors.
S&P cut M&S to junk in March 2020, citing the expected impact of the pandemic on its clothing sales. However, this month, M&S reported interim pre-tax profits of £325.6 million, smashing expectations for profits of £276 million.
Amar Singh, analyst at research firm CreditSights noted that it was rare for a ratings agency to upgrade a company’s rating without first raising its outlook to “positive”, underlining the dramatic improvement in M&S’s performance.
M&S’s shares have almost doubled to 248.8p this year, valuing it at £4.9 billion. The retailer was readmitted to the FTSE 100 in August after four years in the FTSE 250.
Moody’s, another ratings agency, upgraded the M&S outlook to “positive”, but it retained a junk rating.
Additionally the ex divi date was 16-11-23 so value of divi 1p been wiped off
Moody’s upgrade from stable to positive, is not investment grade!
So profit taking.
A most profitable week I must say!
Let’s rejoice in that!
And congratulations to the M&S marketing team for the most viewed adverts ever, fantastic job!
Have a fabulously splendid weekend all, cheers!