Member Info for Okehurst1

Hi Hex

We get to the same loss, I was trying to consolidate the losses into sections to identify what was hopefully a ‘ one off ‘

Then look at known / think we know cost savings and then work forward from there - hope that makes sense?

So say most of the losses are not reoccurring and we save on COGS / distribution we should be back in the black or near as dam it

Boo reiterated in June they expected to return to profit H2

in many ways no RNS is what we want before the update as we know we are on track ?

COGS is the one for me

Bit of help from distribution

There shouldn’t be further write downs

Write downs / inventory/ made up the rump of losses last year and were non cash

Legals is done

Costs to watch for ;

Over / above marketing £18M full year

Finance costs - I guess we got a decent rate on short term interest on the £300M to reduce the interest cost but could be a tad higher than last year like for like

USA over and above capex budget

Opex costs higher than budget ? But we know from DHL we only had 200 staff in the USA in H1 , they must have budgeted and I can’t see that being materiel, may only be 3 months of costs tops, we know they are recruiting additional 400 now but that will be for September H2

Thanks for the input Reardon / SCB

Being critical - ideally we pick holes at the £numbers

On Returns - it was £20M last year although it wasn’t implemented for the full accounts year and even then it was in the sales figures, kind of hoping it’s not material as we don’t like returns

I do wonder could get away with £4.50/4.90 like Zara and co ?

Distribution - we still have an overlap Sheffield to USA

Not too sure what the saving is in H1 other than container costs and how much of that is a percentage of overall distribution ? I’ve no idea ?

Heavy post so only for anyone wanting to pick holes at the numbers - helps all of us Long & Short, welcome a critical view Hex / Wolf if you have the time ?

Summary

If we look at the one off losses ( hopefully one off and even then mostly non cash) and add back COGS/ Distribution savings then Boo could surprise to the upside on FCF and profitability but we don’t know how the USA start up costs are going but they £85M in for capex less a tad for taking the extra equity in Rev B ( £3M ish )

Just on Boo, stuff to watch/ consider

Last year we generated £120M FCF by managing inventory cant see that being repeated ?

The breakdown of our losses last year ;

Pre-tax loss: £90.7 million

Write-downs: £31 million

Inventory: £23.4 million

Intangible assets: £7.6 million

Other operating expenses: £18.7 million

Finance costs: £9.7 million

Taxation: £0.4 million

Net loss: £90.7 million

We shouldn’t hopefully have any further material inventory write downs post Covid ditto £5M on legals / investigations

Add back COGS down up to 35% of call it £450M - no

Idea what we get of this.

intangible losses could be non cash write down of web sites

other / marketing expenses - one to watch at the interims as

this was over and above the 10% (of sales) plus marketing budget

ditto USA capex costs within budget

Then the last big one that could surprise on the upside if your long ….

Distribution costs, we had £144M for the full year, Boo advised we had container prices in our cost of $15,000 which are now just €1500, can’t see a 90% reduction as I guess they enjoyed lower prices in the 2nd half of 2022 but it could still be material to the accounts?

Rev B will be interesting next week

Was in Rev B last year in around the turmoil Pre suspension

but no longer a holder but a of course we are proxy holders via our Boo Equity, I like the business model.

We may get an idea how they see the relationship developing plus of course the margin on fast beauty and considering Boo appear to have raised the profile of Rev B on its website, which makes sense when you own 30%

It appears to be a top trade by Boo picking up this 30% for what £20M ? And from the capex budget?

…. Was his position before he added

No prob PP

He’s increased his voting rights

7.4% to 8.7%

He likes the min 10% ?

Plus another II increased today at ASOS as well

Looks like players positioning

7.431425

They told us on the call PP - all there on the conf call and on the Boo web site

Worth watching PP

Noticed he used an instrument to top up in ASOS ?

Wonder if that’s his next move in Boo?

Appreciate heavy numbers/ detail but there to be challenged

COGS is differential to previous results when we had Covid

Boo last accounts

COGS / Sales

COGS to sales ratio = £942 million / £1,769 million

COGS to sales ratio = 53.2%

We know since then they have slashed suppliers invoices by 25% then 10% and a further 10%

Not saying they can take £350M of cost out but it could be material if we measure against last year.

EBITDA margin = £63.3 million / £1,769 million

EBITDA margin = 3.6%

Boo forecast 6 to 8% medium term

Back in 2020 COGS was 46.7%

Without other cost cutting that gets Boo closing in on 7%

USA set up costs key but how much of that will slipped through the capex budget ?

COGS has made big difference according to the public companies reporting profits that beat the market

All Saints just reported best ever profits as an example

https://www.retailgazette.co.uk/blog/2023/08/allsaintsrecord-sales-profits/

‘Earlier this year, the company noted that it's "uniquely positioned to offer drone delivery at scale with its 4,700 stores located within 90% of the U.S. population."

Rev B partner, handy bit of info below

https://www.foxbusiness.com/lifestyle/walmart-expands-drone-delivery-60k-more-us-households

Hi Poker, yeah spot on

Scb …. Schishhhh

I want my 30p let them think they are geniuses

The one big difference between big Mike/ Umar and the hedge funds

It’s their $$$

The hedge funds playing with other peoples

I like to follow skin in the game, especially someone close to the CEO in this case

FT Article todays says it all

‘One day you feel like a genius, next a moron …’

We’ve all been there, non of us know, neither do they

But big Mike and the CEO’s Son ? Especially the latter who was PLT CEO up until recently, he’s got to have a feel for how Boo is going ?