Member Info for Okehurst1

poker

they have already accounted for the usa cards

they have 260 manufacturers in turkey

double that ****stan

setting up manufacturers in guatemala and mexico

only saying in case i’ve missed something as leicester is a small cog in the system ?

At the point where BOO have to carefully think about buying back £50M of shares and plonk into treasury

They charged £12M through the P&L for employees shares last few months they can sell on down the road or cancel

The cash is there to action

I’ve just picked up another 100k of shares @ 35p

Underwater on 500k at 41p

Happy to wait - ovs would prefer 40p than 34p but this is getting into silly territory now, BOO has no debt and it’s net assets are below m/cap

No debt and the balance value is less than £m/cap

As of March 31, 2023, Boohoo plc's net assets were £472.5 million, Total assets were £877.0 million, and total liabilities were £404.5 million.

Agree, total steal at these levels

Lot of $$ on the sidelines waiting to move when timing right

USA calling end of the bear market ?

Difficult to catch the very bottom but when the world is so bearish I think that’s the time to go Long - not much left in BOO for the Shorts

https://edition.cnn.com/2023/06/08/investing/bull-market-story/index.html

1 pencil

I always appreciate your posts / sharing your info /research

# maybe update on margin

Rev B funding and TU with FCF update maybe now we on margin

Mute point but H2 2022 alone we generated £10M from returns - something they didn’t shout about but it was tucked away in the accounts

So returns generate £20M a year of bunce - towards stuff

Zara now going down same route

The Times

‘Gross margin reached a record 60.5 per cent, in a sign that Inditex has been able to pass on higher prices to shoppers. The company said it saw its gross margin as remaining stable this year.’

BOO are making 58% in USA on $400M

Australia is up there as well

Average is 50%

No reason that BOO can’t get its margin at 60% via test / repeat - back to basics post Covid as they advise

We generate an extra £170M gross profit of course

Has to be a target when competitors are achieving this margin

Bottom line - had to show workings below

We should surprise again to the upside (FCF ) and catch the Shorts out

Few thoughts on tail winds / FCF whilst we wait

Cotton

We know via the ‘rag trade ‘press that BOO have demanded a 35% reduction via invoice discounting from its suppliers

this was to take account of a 25% year on year reduction of Cotton price/ energy/suppliers distribution costs

Assume BOO make that hold - they don’t give any back and we don’t know if that’s just Turkish based suppliers only - that’s £100M a year off COGs, so at the max £50M H1

Can’t see us grabbing the full amount but it should be decent/ worthwhile

Distribution - it’s a big cost reduction from 2022 levels

Container from $15,000 to $1500 , air fright down, again this should be material to the bottom line, no idea what this equates to $$

Administration - BOO charged £15.7M to Admin restructuring 2022 , primarily closing down Dorothy Perkins / Wallis

Plus costs integrating Nasty Gal £3.5M

Launch of Boohoo Man brand £1.7M

Ok so for 2023 BOO tell us they will incur further costs of £5M to continue same but we enjoy £10M a year saving from the one off cost of £20M above (2022)

EBITA margin - BOO guide to 4% to 5% EBITA

Take 4.5% on £850M , circa £40M profit

But that had to before cost cutting above ?

Less finance £6M

Capex, can BOO generate enough FCF from above to fund £45M ? How much of that is earmarked for REV B ?

It was all included in capex for 2022 (£91M) they say £85M for 2023

I would argue they may well continue being FCF + for H1 after capex, then we are down to how much of Rev B funding do we take and do we underwrite? No idea on the latter until they RNS but if they deliver as above and increase stake in REV B at favourable terms then we should rerate upwards

Waiting on that RNS… it’s due

Saw this with THG a couple of months before the Big II’s closed out - over .5% holdings

IG first …

T4G that’s fair comment

Agree Polish, don’t think anyone is saying that, this is about Kelso stock holdings not THG

It’s the HNW boys managing their personal holdings and playing arbitrage

Not without risk but am swaying to this :

BOO become the cornerstone underwriter in the REV B rights issue, they take up their entitlement and anyone who doesn’t subscribe they pick up

It’s discounted to 15p a share , £30M to 40M total

BOO get a whitewash - over 29.99% off LSE

The 2 ex directors being investigated for fraud are then under pressure, pump in £9M to £12M or be diluted

Have they got the £P’s ? Or the appetite ? Do they want their funds tied up any more than current ?

BOO pick up any slack, they have the whitewash, may end up with 60% of REV B for 17p average

BOO does a TU same time, we know COGS have been chipped 35% H1 throw in distribution / admin cost cutting to Pre Covid levels

BOO £m/cap £470M today

BOO property £380M

£1.7B global revenue plus Rev B £200M all for just £90M in affect

Am in at 41p would love to buy at 32p and average lower - which I would do - but suggest there maybe a seminal event about to happen, happy to hold a position just in case

Agree, looks that way

Kelso get the £P’s

HNW boys shelter from CGT tax and 50% cash back if they want

OSG thinking the spread betting platform may be happy to charge the interest / no risk

The HNW’s fund Kelso who buy THG shares

They recycle the Kelso shares value - of the cash they have put in

Get 50% of their cash back in affect? - if that makes sense ?

Net net 15% of Kelso is owned by the Spreadbetting platform but PG’d by default by the HNW boys ?

Could it be something as simple as certain high net worth investors - who make up Kelso register - have just ‘ sold ‘ their shares in Kelso to the Spread Better Co, then open up a long back to back ?

In affect the spread better is a platform for CGT arbitrage ?

No CGT on gain ? - eventually

We need both sides to make a market, if PP1 is on the opposite to us then that’s the market working

Personally I think the poster is wrong - at this price 40p due to micro for BOO and what we know with cost cutting / REV B / we have no debt and we are run by our founders

REV B & TU the next inflection points, RNS could come out of nowhere on the former and if not in BOO you could miss the bounce add in a good TU / FCF + and it’s a lost opportunity to make money