Member Info for Paulof2

Good results but a very disappointing move here..

Wouldn’t expect it until after the next announcement tbh

That’s simply not true. Also don’t forget n brown is more complex than other areas given the financial services element. I’m sure that’s what will be holding it up running the impact through the fs element

What are you on about looks iffy hahah literally every plc is doing it

I agree an update would be nice, all feels a bit eerily quiet!

Interesting z. Bet not many people will know what hadfield is but as I used to work there that’s a promising sign. Suppose the question is can it not cope because the number of workers has been reduced or is demand just massively up.

I have a holding here so £1 would be lovely but seriously what planet are you on if you think it’ll be close to £1 on open?

Long term I think this could be a good strategy but 20% dilution really is a large amount, coupled with increasing debt I can only see this going one way tomorrow.

Looking to pick up some shares at much cheaper prices tomorrow.

Nice signs by the market today people starting to realise the potential here.

54321 - there is a bad debt provision in the accounts for a reason. It’s actually been increased year on year just because of changes in accounting policies, it’s incredibly prudent and there is room to absorb some if not most of this increased bad debt.

I’d be more inclined to see that as a risk if the government hadn’t introduced the furlough, with many customers still getting a payment each month I don’t think the increase will be that large. The only people losing out at the moment are self employed people on high salaries who are getting no income and they’re not going to be buying goods on credit anyway.

My personal opinion following on from the above

A share tumble from 160 to just 10 is ridiculous and is likely to fly up once the business releases its next statement essentially confirming its survival so I’m topping up substantially at these levels.

Target September - 45 however wouldn’t be surprised if it reaches that point much sooner after the company comes out with a new forecast. End of calendar year 100, if not substantially higher when those juicy dividends return.

The buy of 2020. Let me explain why.

There are concerns whether this business will survive hence why it’s took such a beating but actually n brown is in a much better position than most.

Firstly, n brown came out and said sales could be down as much as 40%. Yes this sounds horrific but actually it looks to have been poorly timed, looking at the data that tracks e-commerce sales overall it has picked up since then. What you also need to take into account is that almost 300m of n browns revenue comes from credit customers, this revenue is still going to be streaming into the business purely on interest alone rather than new sales. Yes there may be increased bad debt but the incredibly prudent bad debt provision can absorb those no problem. So what will the impact on sales be? Difficult to say but definitely far less than the 40% quoted.

Next issue - cash. Yes on the face of it it looks as if the business may be struggling for cash with just a 40m cash balance. However, as I mentioned earlier you’ve got around 20m fs revenue coming in, plus any additional product revenue which will still be at least £40m, with the non financial services element with 0 payment terms and instant payment coupled with measures such as furloughing staff and not purchasing any more stock there is actually very little cash leaving the business now it has shed its stores and the company can build up their cash reserves incredibly quickly. Let’s also not forget measures such as deferring vat payments etc which is another substantial amount to help the business weather the storm.

Next issue debt - on the face of it this does seem quite dire. However when you look into it the situation isn’t that bad at all, firstly the debt is based on us paper rates so the interest has taken a tumble too. However the key point here is that this 500m debt is secured against some of the financial services receivables only. Worst comes to worse what happens, they default pay off the 500m debt and lose 500m of the financial services receivables - no biggie and actually very little impact to the business overall, if anything puts it on a better footing coming out of the situation. And it’s quick enough to build that balance back up.

When looking at n brown you need to keep in mind that it isn’t comparable to many other retailers because of the financial services element of it which is often overlooked. Yes that does mean the business needs to hold more debt but also means the business is in a much more secure position for situations just like this. I, like many others, would have dismissed this stock straight away however as I used to work there I know how strong and much of an asset the financial services element of this business is. How a company with £70m profit a year can be trading at a market cap of £29m is beyond me, wouldn’t be surprised if this was bought up.