Member Info for Okehurst1

…. From experience when Crowman comes onto your BB and says sell …

Works for me …

….. the muppet has been fired

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 …

Excellent deal £175M enterprise value

£150M off the debt pile

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

# on GMV gross

Re GMV, THG EBITDA return - this is what they have told us

100

over 35%

@ 7.5%

On £1B THG generate £26M EBITDA

Works out 2.6%

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 ?

Mike having to pay a tad more, he needs the Shorts to double down

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 ?

Is he going to 29.99% ? Looks that way?

Class bit of trading by Ashley/ his brokers / MM’s

MM’s push the price down, accumulate, sell to Ashley

Rinse/ repeat

Interesting posts T4G thanks for the response, especially the point about the fixed cost ‘marketing ‘ expense

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 ?

First off, Ashley is a retail genius, he turned Frasers around, he’s pumped in £100M between ASOS & BOO and he probably has to do another £150M to £200M min to get 29.99% of both

IF his plan was to merge

He doesn’t need to pay £20 for ASOS he just builds his stake as when the market drops the price of both companies as he is doing today

If he does go to joint 29.99% and a merger was his game plan

there will be a commercial/ enterprise value placed on both businesses including debt - Combined debt could be £300M plus by then maybe ?

The whole could be worth more than the 2 parts so to speak due to cost cutting and with Ashley driving the merger there is a good chance he could raise the money to pay off debt / working cap

Not a guarantee that the above will happen but commercially it’s a possibility

The above becomes a problem for the shorts in both businesses as MA as he is doing will take the opposite side of their trade

Would the market put a higher value on Ashley succeeding over Boo management team and ditto ASOS? Suggest they might

Is Ashley going to 29.99%?

Does a Rev B on Boo?

Takes the BoD from the inside, he does the same with ASOS and merges both business’s ,restructures the lot, cuts out duplication , raises funds to clear the debt / working cap ?

Frasers access the USA/U.K. automated fulfilment centres as well as the new enlarged group ,assuming the former is completed and he gets Debenhams marketplace as well

Debenhams Middle East gets him into MENA region

As Money Sponge infers he’s got loads of $$$ and is wired differently to us peeps, could be wrong with above but it’s looking that way?

Short term it’s how much will he pay to get to 29.99% ?

He could have a £5B on line business

PDS, it’s pointless debating with PP/ Pedro

Boo ain’t going bust, however we can all see it could benefit with MA being on the BoD / influencing

Squeeze the margin to 6% and we are where we are with the revenue

Finance the £135M real estate to keep trade insurance happy as Bank debt will climb to £60M to £75M next February

Forecast to be £140M year after - suggest this deters the Shorts who assume a fund raise will be required

Slash marketing budget in line with peers to 5%

But complete automation of USA 24/25 - a must

Lots to do but Boo ain’t a zero

‘Our FY24E EBITDA is based on:

 17% decline in LFL sales (c.28% contribution margin) – in line with H1.

 Gross cost savings of £80m (first part of £125m announced in the H1 FY24

interims) offset by some reinvestment to give a net £68m.

 2% fixed cost growth.

 4% marketing reduction (inline H1). Our FY25E EBITDA is based on:

 

 

A LFL sales decline of 5% (c.30% contribution margin).

Gross cost savings of £45m (offset by some reinvestment) to give a net £40m benefit.

2% fixed cost growth.

10% marketing increase due to the new US distribution centre’