Member Info for Okehurst1

We have Hex and even Wolf who will challenge an over bullish post and the chat is then productive which is what want ideally.

PP and their imaginary friend Pedro offer nothing, the poster is obviously mentally not well, I agree with you Christina green box both of them.

Karen Millen being well marketed NYC and London

https://www.instagram.com/p/CxLeDeXIL_L/?igshid=MTc4MmM1YmI2Ng==

If the £70M EBITDA looks worse case on 4.5% ?

All we are talking about in this example can Boo get to 6% and nab another £30M - for a headline £100M ?

Surely COGS reduction gets them that on its own ?

Then they need another £28M to get to FCF +

When you break down the categories/ numbers and look at the opportunities there is definitely scope - but for us PI it comes with risk holding Boo

Am comfortable to carry that risk / reward

On face value I think Hex makes fair comments - fully agree with Hex’s commentary regarding recent margins / growth etc

No argument of any of us as it’s fact

Boo are forecasting up to £70M EBITDA and on a straight line basis this would mean £58M negative FCF - listed break down yesterday

However IF Boo can squeeze an extra 2.5% margin - listed the breakdown of the 13% increase on cost of sales last year

Plus COGS reduction

Plus drop working cap days

Marketing H1 cut by £20M as example

They hit £100M EBITDA

FCF Neutral potentially and that’s after £85M capex

£25M exceptional’s / finance

Not without risk but if Boo close that gap on the negative £58M and guide £70M to £100M we could move towards 9X EBITDA

That’s my take, it looks doable

Suggest we need to consider debt to equity ratio @ 34% Boo is very good

Put into prospective ASOS is 93.3% so below the preferred 1:1 max but still high

Then if we look at working cap days, Boo is down to 46 days on last count and ASOS 227.9 days on August 31st

2022 - I’ve not drilled down on ASOS as not invested but these 2 metrics are handy to work in terms of cash management

Boo is not spending big $ servicing debt and is reinvesting it’s profit to drive efficiencies which in turn drive down working cap days

Let’s see how the working cap goes when we get the update

If we just look at H1 in isolation

They are forecasting a drop in revenue of up to 15%

Ditto in April alone they reduced lead time by 3 weeks and quoted stock reduction of 34% last year(£100M) and more to come H1

Not sure what the quantum is but suggest it looks potentially FCF positive on this line on isolation ?

I reckon they knew in May on the analyst call they were driving working cap down from 46 days

Marketing appears to have been slowed H1 as well - can’t show anything to support this statement other than start of H2 we appear to be everywhere

Onto full year numbers Boo guided to £65M to £70M EBITDA

Less

Ditto £25M exceptional’s

£85M capex

Slightly higher than £12M interest am going with £18M including extra legals Rev B as a ball park

So worst case without reduction. COGS/ working cap days

reduced , ditto not pulling back any of the combined 13% cost of sales percentage increases last year and without nipping the £174M marketing budget then worse case FCF would be

£58M negative ?

Ok they ain’t going to get the full cost of sales back to Pre Covid but they can pull something back, they repeated the £50M of savings on the conf call due to automation and said more to come this year ?What will they show on that line ?

What will COGS savings be and maybe marketing in H1 especially and distribution that was 7% higher on cost of sales ( part of the 13% btw)?

Suggest there is a possibility they close that gap on the cash and get to neutral and same time increase the margin, can they get the extra £30M gross ?

Appreciate it sounds bullish but the numbers kind of stack when you read along side the analyst transcript

Been a good chat

Not sure if this was in annual accounts but Boo told the analysts that the total eye balls from all their influencers was

400M

7.3M Insta followers

Tyra Banks just launched her Karen Millen range today

https://www.instagram.com/stories/karen_millen/3190941708810653774/

Whilst it’s a franchise model it’s nice to see the stores rolling out across the Middle East from Cairo to UAE - looks like 7 stores plus on line

Growing nicely and capex lite model

https://instagram.com/stories/debenhamsmiddleeast/3190640175710024760?utm_source=ig_story_item_share&igshid=MTc4MmM1YmI2Ng==

During the analyst call they guide to 4.5% and mention that in April lead times were 3 weeks better due to test /repeat

There is quite a bit of info within that transcript that helps you join the dots.

One final thought , the Rev B affect ? They have been heavily marketing Rev B products, is there a bit of bunce in there?

They say on the call they know they are light on Beauty within PLT/ Boo but the they are learning frkm RevB , did Barbie help sales make - up wise via cross selling to the 18M app users ?

Hi Hex

As you said it’s all guess work until the update

Know it means nothing and it’s just an opinion and I could be wrong but I think Boo will surprise to the upside with this next TU, without repeating all the numbers in detail

Estimate

£740M to £770M Rev maybe ?

£37M to £40M EBITDA @ 5% - top end of their guidance

Less - For FCF

Capex £50M - H1 loaded / £3M Rev B

Exceptional’s £10M - they guide mid 20’s

Finance / legals £8M

Add back

Less reduced £20M marketing - guess

£something COGS - it’s £something

Ditto something across the cost of sales 13% (listed how this was made up ) that was higher in 2022/3 to Pre Covid

Lastly working cap down a few days

COGS/ something from the 13% could see the EBITDA margin higher, ditto COGS

I think there is a good chance they come in FCF + / neutral and surprise to the upside on the margin

All conjecture of course, let’s see how this post ages.

I no longer see PP and his alter ego Pedro posts as they offer nothing

Highly recommend green boxing and we can just focus on discussing data/ info in a constructive manner, let PP talk to themselves via their imaginary friend called Pedro

Hi Pipe

Thanks for the reply

Same my side, please keep us all updated on the technical side

Much appreciated

Nb not researched S/dry and Walgreens

ATB

Boo plc will have an important edge on Shein in the USA as they develop their supply lines from Guatemala and Mexico, it’s a key factor as Boo will avoid USA tariffs at that point, put aside the commercial benefit of test/ repeat and lead time which have a massive knock on affect on profit and of course stock / returns

Taking the view Shein’s main advantage is posting individual items direct from China and falling under the radar for tariffs but that causes them issues that Boo will avoid as the USA DC gets into full flow

Debenhams market place

Debenhams / Rev B Beauty offering

Debenhams International Franchise

Karen Millen

PLT which did close to $1B Rev last year and almost $100M profit

Suggest Boo have been pivoting some of the Group / brands to avoid a direct price war with Shein moving forward

Hi Pipe

Didn’t have a chance to reply yesterday

Appreciate you are a trader focusing on technicals, no prob with that btw always interested in your posts, you have been generally accurate with your predications, impressive and it’s good to learn from you

Just on the subject ASOS vs Boo outside technical trading ,if we look at the balance sheet debt of both;

ASOS

Senior secured term loans: £200 million

Super senior revolving credit facility: £75 million

Trade and other payables: £837 million

Lease liabilities: £418.3 million

Other liabilities: £170 million

Debt to equity ratio is 93%

Boo

Bank loans: £288.2 million

Lease liabilities: £114.9 million

Trade and other payables: 60.5 million

Other liabilities: 20 million

Debt to equity ratio is 39%

In my opinion the Boo debt structure should allow Boo to have a higher rating of that of ASOS plus depending on IF they can drive down the combined 13% cost of sales that were elevated last year or two due to Covid

I itemised the 13% on Monday based on the last audited accounts and the most recent analyst meeting

Point being, until Boo demonstrate the above the market won’t decouple from ASOS even with our debt to equity ratio being much better , hopefully we see the rerate commence after the TU / interims

If it was Big Mike the 8M would take him over the 11% we will

get an RNS - if it is him that is

Contd

‘, the group had forecast an adjusted operating profit margin of about 8.3 per cent at Primark in the second half of the year, but in a pre-close trading update on Tuesday, ABF said it expected it to be slightly below 8 per cent “in part due to due to higher than expected stock loss from stores”.

FT on line

The boss of Associated British Foods, which owns the fashion chain Primark, has become the latest business leader to warn about a marked increase in retail theft and abuse against staff in stores around the world.

Chief executive George Weston said the behaviour was “worse than we’ve seen in the past and it continues to get worse”. It had even weighed on Primark’s profit margins over the past year, he added.

“Theft levels and antisocial behaviour in-store are up, which is a nice way of saying people attacking store staff,” Weston told the Financial Times on Tuesday. “It will just continue to deteriorate unless the authorities responsible for law and order recognise the issue we’ve all got.”

His comments echo similar remarks in recent weeks by Ken Murphy, chief executive of Tesco, and Dame Sharon White, who chairs John Lewis and Waitrose.

The UK accounted for about half of the incidents at Primark but the issue was “everywhere”, Weston said, including France, the Iberian region and the US. In some instances, thieves walked out with goods worth more than £250.

https://on.ft.com/3LgBR5R

Obvs your call Wolf but your dealing with a self confessed Troll - they are not invested they admit that - who has multiple accounts and is sandwich short of a picnic