Member Info for Okehurst1

Hex, agree.

Rounding up on my side

Realistically if they execute and get to debt-free with £35m FCF, the stock re-rates to maybe a 6-8% FCF yield which would imply a market cap of £440-580m — roughly a double from here. That’s essentially the Panmure bull case.

But you’re paying today for a scenario that’s 12-18 months away with multiple execution hurdles in between.​​​​​​​​​​​​​​​​

Sell KM/Burnley it’s a bagger potentially

If we look at what has to be covered if RCF repaid

In cash terms 2027

Leases £8M

Capex £7M

That’s £35M FCF on a £300M m/cap call it an 11% yield that looks decent

Obviously they have to get there with the £100M plus disposals but if they do they have an asset light business, no debt and churning cash on a decent yield to £EV

Any views ?

Thanks Hex, fair post.

They could sell Karen M ? That’s £50M?

Then the have Burnley? Does that have any debt on it other than RCF floating charge ?

Burnley could be another £35M to £50M

£20 sq/ft to £30sq/ft

That’s the RCF repaid assuming they are FCF neutral this year

Its doable

Hex

If we look at the last known position on used RCF it was about

£140M ?

Throw in the £35M raise and give or take they have £70M of cash at best but the £175M debt facility is still in place

led by TPG Angelo Gordon — the same TPG that helped take the original Debenhams private back in 2003 in that leveraged buyout that ultimately destroyed it. There’s an irony there.

So the raise is all about the balance sheet being boosted to renegotiate terms and 18 month headroom to get to FCF positive for 2027

Any thoughts ?

What do you think of below Hex?

My take.

∙ £50m adjusted EBITDA

∙ But that’s before D&A, share-based payments, exceptionals

∙ Interest: ~£15-16m (11-12% on £141m)

∙ Capex: ~£8m (going forward)

∙ Leases: ~£13m (going forward)

∙ Working capital movements

You’re already at £35-37m of fixed cash outflows before you even touch the adjustments that get stripped out of that EBITDA number. And the statutory results still showed losses at H1.

Suggest they are on for FCF neutral 2026 ?

Am I missing anything ?

Hi Hex

Steadies the ship and gives Dan the chance bring the cost of capital down and save £3M a year ?

Guess you have to say with EV close to £400M and FCF at best neutral in 2026 maybe £15M + FCF 2027 and £40M FCF 2028 it’s fully valued today ?

As you say good for the long term though, pleased for the stakeholders in Debs

We can speculate the £5M raise have a potential legal claim if they can show Ashman misrepresented the forecast and David would join that litigation

Litigation is of course expensive for all parties but the Company may have to settle using shares ?

Assume that’s worse case but if the £700k is coming in then Ashman may not be on the hook?

Thinking this through

It could be speculated Ashman over stated the Skin revenue to justify the £5M plus raise up to June 2025

That’s highly plausible after the recent RNS

The 2 companies that were purchased with a chunk of the proceeds are in affect now doing the heavy lifting IF the £700k plus royalties are made up

Personal view, I doubt Ashman would have done that without being certain the £700k wasn’t pucker, even Disco Dave didn’t do that one, it was a member of the sales team

On the cash burn side they have 2 years working capital in the bank although they have to pay out deferred payments for the two companies, maybe that’s were the market is spooked ? That may need a £raise

Fingers crossed the BoD clarify the £700k position fully asap

Posted this on Friday,

With hindsight, the timeline looks very suspect:

∙ April 2025 — Hewitson joins as COO, specifically brought in to support Ashman with day-to-day operations of the expanded group

∙ October 2025 — Hewitson gone after just 6 months, citing “personal reasons”

∙ February 2026 — Ashman suspended and resigns over conduct investigation

I guess the big question now is does the royalty figure come back into this years numbers or it spread over X years or does it not exist and it’s a ‘ disco Dave ‘ of WAN disco fame

Hopefully the BoD clarify this important point asap

if it’s positive then this is buying opportunity

April 2025 — Hewitson joins as COO, specifically brought in to support Ashman with day-to-day operations of the expanded group

∙ October 2025 — Hewitson gone after just 6 months, citing “personal reasons”

∙ February 2026 — Ashman suspended and resigns over conduct investigation

Guess it will come out in the wash but did the COO see something he didn’t like ?

Hi Captain

Not been on the BB or looked at the company performance for at least a year.

You did warn investors about this stock

Bring back Colin and the Tesla comment, they were the times

Good post as usual Hex, especially on PLT, the market would welcome a breakdown on its standalone performance, not sure adjusted EBITDA cuts it but let’s see.

It’s a long shot but they may get lucky with Burnley which may generate cash and who knows on PLT eventually,

arguably at that point they achieve FCF ?

Suggest that’s the best case medium target, long term expand Debenhams brand.

Personally I have faith in Dan but I am waiting on the sidelines to buy in potentially

Thanks Hex, like your posts, helpful

Bfd

Suggest it’s an important data point for us PI’s to focus on.

Hex, nice share of info, thanks.

Whats your view on post return GMV for Debs m/ place

I am interested in the concept of Debs complete their disposals as outlined and repay the RCF / as much as possible and save maybe £15M to £20M maybe a year , all the brands use Marketplace, the brands at worst case are FCF neutral and Debs marketplace generates 4% EBITDA on GMV

The model is capex / capital light, if the profit from the brands is in Deb Marketplace then so be it is the thought process as long as the brands are not losing cash out the back door

Hope the above makes sense, any views ?

FED

Good post, well laid out

If I may add

Debs Marketplace model, which looks about 4% EBITDA of gross GMV to me, does have a double booking as Hex pointed out as youth brands now use as well, ditto KM etc

Ideally the market needs to see Debs market place results ex internal brands on the platform, the capital / stock light model can then be measured

Hex made the comments in response to a post of mine, I had missed this point which is quite an important one that I had overlooked, this is when I think BB’s work rather arguing / wasting time as non of us little PI’s move the dial

Level, I think Dan has done well at Debs Marketplace and wish him well, agree his remuneration is too high but he has enough skin in the game now to make this work for him.

For new money to buy shares now it’s too risky, let the dust settle over Burnley / PLT, see how much debt is repaid, the RCF cost is steep, ok you may have to pay more but you don’t lose your shirt, see how Dan is performing alongside FCF, opportunity here potentially but not just yet

Any views why the recent director bought a big chunk of the company knowing there were liquidity issues paying suppliers as FED suggested ?

That bit doesn’t make sense ?

FED, maybe that’s the issue ?

Suppliers having problems extending credit ?

Debs need them to take a view without insurance ?

£171M m/cap vs £175M Debt

Guess one of the issues is suppliers obtaining insurance

Lot of jobs at stake here, looking a bit tricky to say the least