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Mentioned before Xmas I sold down at 40p, leaving profits to run (35p average buy in )
Suggest Crowman makes a fair snap shot assessment.
USA key, if we can push retention rates up( CAC down ) approaching UK metrics then Boo generate decent cash, we can then fund the automation of the USA site similar to Sheffield without pushing the debt levels up.
Worse case it takes a while and Big Mike short term/ post TU pulls us back towards 40p as he mops up the free float
Is he prepared to go on the Bid in 5p ranges ? We had 30p, 35p,40p, is his next range 40p to 45p but he lets the TU get digested first ?
Xmas last year at 38p we had Festive doom off the 3 wise men ( the 3 Steve’s ) the donkey chipped in ( Monimoron) but the sheep lover Shepard of doom (the Crowman )saw the light and had a Saul to Paul conversion and eventually made money :-)
In the 12 months we saw a 300% jump at the peak
It’s been a top year in THG for us bottom fishers
Boo should take advice from Counsel can they seek address from the BBC?
Did the journalist lie in their CV and as were placed in a role within the buying department but they didn’t have the experience?
As such how much did they cost Boo by not delivering what they were contracted to do ?
I think it’s a valid point
One positive …
I can’t see PP posts after reading the posters daily drivel for months I blocked them - the poster has mental health issues -I do remember when Boo was 31p they were recommending sell Boo and buy Rev B which was 34p at the time
Boo still has work to do but we have been supported by Frasers picking up the free float, downside risk looks minimal whilst we await the next TU
Are Frasers going to invest £130M to not want an element of control ?
If they get to 30% which is looking likely would they try and take the Board with the support of II’s ? They only need 20% at that point give or take and they do a Rev B style move?
50.1% of the vote and Frasers start calling the shots and then work on a ASOS/ BOO merger maybe
It’s either the above or a full take out.
Difficult to argue against the Shorts after the interim results which were disappointing, 4.6% EBITDA was poor, not sure it’s worth the energy arguing Boo performance as a company, it is what it is.
Saying all they someone see’s value in Boo today, £70M last few months .
Guess we are now down to the maximum price Frasers are prepared to pay per share to get their hands on 29.9%?
They are now well past the half way line
Then what’s their end game? They will be in for £130M
New to the BB but been watching Curry’s for a while
Would appreciate any comments below.
If we strip out U.K./ Ireland revenue then International revenue is about 20% of total
Assume £1.5B Rev and EBITDA is £56M - international only - from close to 500 stores, Greece makes up 90 stores
On a straight line basis each of the Greek stores generate £3M revenue - slightly under but let’s round up
So Greek revenue of £270M and possibly £12M EBITDA
Enterprise Value ? £120M
Any thoughts ? Am I missing anything ?
Personal view - suggest below is balanced argument
Based on the recent update, 4.3% EBITDA, £40M bank debt, maybe £62M to £70M bank debt by Feb 2024, net client retention USA 42% and customer acquisition cost whichever way it’s cut being £26 ,coupled with reduced revenue there is no compelling reason to go Long until next TU and see how USA trading is going - U.K. has 91% retention, Boo just need to maintain over here, it’s all about USA now
However behind the £numbers Debenhams is heading for £decent £ GMV and is profitable and requires limited cash EBITDA 5% according to brokers private notes, Karen Millen is profitable as well as are other selected brands
plus Boo own 30% of Rev B on top plus they own their head office £135M with no debt and the Sheffield site has had £125M invested and is fully automated - USA not automated yet
For another maybe £65M Ashley takes 30% of Boo? Highest price to date 35p ? He’s then pretty much in controls of events at Boo at that point and Rev B by default for a sunk £130M ?
Notable the Boo BoD have not bought shares
Does he make his move to get over 50% with a full on Bid and take the BoD? He doesn’t need to get 75.1% to control the Board, obviously it’s messy but Big Mike doesnt seem to care about who he upsets, can’t see him shirking a tackle so to speak
Point being, Ashley is not going away and the Shorts can see that now, can’t see any doubling down from here and if they do in the open market Mike takes their trade as he has been doing ,it’s just a question of how long does it take Ashley to hit the 30% if that’s his target?
The battle could be drawn out over the next few months and into Q1 2024, no rush for Ashley but I would say for the II Shorts this is good as it gets 27p to 32p, they are leaving themselves exposed to a cheeky Bid of Ashley once he hits that 30% mark.
Any thoughts on above ?
Thanks for the replies
Suggest the U.K. held up well considering, 91% retention rates - data points that way, think that’s fair ? It was ROW that hurt the performance
Suggest Boo is now a play on the USA performing and can they match the U.K. metrics ? They have the balance sheet to generate cash to roll out their strategy, if your Long the upside could be decent if they pull it off, if your Short then Ashley is lurking to pick up the slack around the 30’s till he gets to 29.99% however long time wise that takes him
Looks like we stay in a tight trading range till the market gets feed back re USA sales data ?
Like many of us I was disappointed with the gross margin of 4.3%, Boo only captured just .75% of the deflation tailwinds - I got my call wrong, I thought it would be higher, hands up on that one.
Worth a quick recap of the known data after last week
It appears Boo held up well via the strategy above in terms of retaining 91% of their U.K. customer base - repurchasing - however ROW / USA was just 44% retention
Cost of acquiring a customer across the group was £26, doesn’t take much to work out from the average basket size and margin that with 56% of customers not returning it’s economically unviable at £26 a pop - outside U.K.
Boo’s marketing spend % is the highest of all fashion apparel retailers - posted on this a few weeks ago, Boo are over double percentage wise re sales than ASOS as an example, so spending even more on marketing won’t work
So come Feb 2024 Boo will have £62M to £70M of bank debt and Feb 2025 this will jump to £140M on current trajectory
If Boo switch their marketing spend to USA and are price competitive can they achieve the 91% retention rate like the U.K? However does that mean the margin stays in that 4% to 4.5% range and what affect on the U.K.? Can they retain the 91% with minimum marketing over here?
Boo going forward generates £70M EBITDA less capex / cost of finance ,repay debt , future EBT if required?
Boo needs to automate USA so capex for next year will still be high, we know this from Sheffield Phase 2
Boo could well need to generate cash to keep the credit insurers happy based on the above ,sale & leaseback of their London office would do the trick, £135M
Whats Ashley’s strategy?
It’s hard to call as he is a maverick but if he goes to 29.99% does he then wait to strike knowing Boo needs a cash injection sometime down the road? Let the BoD finance the property and he sits and waits? If the BoD can crack the USA and they can then trade through to match U.K. retention rates and push the margin, they deliver.
For what it’s worth I can’t see Ashley bidding for Boo but a high chance he goes to 29.99% and then waits for the above to play out, IF Boo can deliver 6% on £1.8B 2024/25 he makes a decent return on his investment, if they don’t he’s in a position to take advantage.
Boo is a bit of an alphabet soup with many moving parts but suggest the above is a fair stab at where we are today ?
Any views on above ?