The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Thanks Danl - The time line of events last month was an indication on 14th jan that covenants would be breached by end of Jan followed by a liquidity update on 29th saying waivers had been agreed until 28th Feb. So I was expecting an update yesterday/today to either confirm waiver until end March/end April or what other agreement had been reached.
I hadn’t thought about the liquidity update on 14th Jan being part of the scheduled trading update so what you are saying makes sense. Let’s hope that, if mid/late March is in fact when the full data to end of February is available, how close that is to planned reopening and encouraging noises regards online/app will have some bearing on how well the discussions go.
Like I said last week I am not against card raising cash by way of placing/rights issue but I would rather it be part of a coherent growth plan to develop online etc than as a result of banks not playing ball.
Certainly due to be a risk off day for U.K. and Europe today. I wonder if the eu discussion about a vaccine passport (u likely to be ready before may) will help ezj to buck that trend?
I was expecting an rns to provide the promised further update on liquidity.
The company reported on 29th Jan that bankers had provided waivers for covenant breaches until 28 Feb and that they were in constructive discussions with the banks,
It would be bad form from the board not to provide an update before market opening today given 28th is on Sunday.
Big Friday sell off because people always sell out this share on a Friday? Because we are in the wrong type of geometric shape? Because ASOS got top shop and we only got burtons? Or is the bonds situation and tech self of in the us or the performance of the Asia markets overnight likely to affect what happens across U.K. and euro markets today?
Razors will be on shortly with the daily update and I suspect that it will have more influence on where we go with today than anything else.
A day to concentrate on the latest declarations and ante post odds for the Cheltenham festival I reckon rather than trying to find something in my portfolio that’s flashing green!
Ha ha dannyred - I do hope not, this board has is relatively sensible. I couldn’t cope!
Yes Swedish it’s absolutely true, they’ve offered 39p a share but they only want the shops not the online business! :)
There’s some rubbish spouted on here at times but TCM your statement that there will be a 10% drop in the boohoo share price based on the budget has to be a contender for first prize!
Why do you think there will be a drop purely based on the budget? Online sales tax is about the only thing that might affect boohoo and others and even that is only expected to be around 1-2% based on the reports earlier this month.
The online tax scenario was widely published several weeks ago and there was in fact a downturn for online businesses including us, ASOS and Ocado amongst others at the time although they quickly picked back up again. Since then the chancellor has said it is something being looked into and the earliest it will come into play will be the September budget.
All we know for sure at the moment is that the ceo of Tesco’s thinks an online tax is needed, the chairman of next thinks there’s a more effective way of supporting high street businesses by looking at the business rates payable on both high street stores and warehousing to establish a more balanced approach and that boohoo, ASOS the hut group and others have set up the U.K. digital business association so you can be sure their voices will be heard as part of any consultation about online sales tax.
Last. Month we had an update on the financial position on the 29th stating banks issued a waiver on covenants until 28th Feb and constructive discussions were taking place with our bankers.
So we should expect an update tomorrow as to wherr we are now. There has been specjaltion about a rights issue and an aftificial rise in sp to accomodate that.
Will we see an after hours rns today about ri or a pre market rns tomorrow confirming further waiver until end of march or april?
Im happy tol hold to wait and see rather than consider adding. Only got in here last month so sitting on a nice paper profit with funds available if we did do an ri.
Ginge, what would happen if the data for the Astra and Pfizer vaccine showed that it not only stopped the vaccinated from getting really ill when they are exposed to covid but also stopped them from spreading covid to others? Would countries like Italy France and Spain etc be happy or even desperate to attract as many U.K., German, USA vaccinated citizens as possible to help their economies? What would happen if Europe started to catch up with their vaccine roll out and ended their versions of lockdowns at a much quicker rate than the U.K. and by May/June were opening their borders to international travellers from selected countries?
While we are playing the what would happen game what would happen if there was a bunch of earthquakes in southern Spain a series of terrorist attacks in France and an as yet undiscovered volcano beneath lake Garda erupted?
You may as well ask what do you think the ezj share price would be if there wasn’t a vaccine available for covid.
1351 - in that case I’m stumped and what you describe does indeed seem puzzling. Not sure if one of the clever dudes and dudesses on here will be of more help but ultimately it’s not unreasonable for you to expect your service provider to provide you with an answer that at the very least you understand even if you don’t agree with it. Perhaps exploring their complaints procedure is the next step for you. Good luck.
1351 did you set up an auto sell at a something like £8:as well as at £8.20? Sometimes a stop loss can get triggered at a price less than what you selected if the sp drops through your floor limit.
Many years ago I set up a stop loss on a speculative investment in order to limit how much of my hard earned I could lose and fell foul of a ‘flash crash’ on opening selling out my then profitable holding at a loss of about 15% when I had set my sell limit at 10%. By the time I was aware the share price was 3 or 4% up in what I had originally paid. A harsh lesson to learn but I wasnt the first and certainly not the last person to learn it!
The only automatic trades I ever set up now is automatic dividend reinvestment as I get these at a lower commission rate. Occasionally I even switch that instruction off if I want to receive dividend in cash in order to invest the funds elsewhere.
TCM, I do hope you didn’t make a special trip to the site just to establish that nothing is happening with the factory. They won’t do anything until the planning permission they have applied for is granted. You’d be the first to post your usual anti boohoo bs if they were to start fitting out a factory without the requisite permissions!
What did you think of the artists impression of what the new factory will look like?
I think chris means something like
If the share price was 200p, in a couple of years and they paid a dividend of 7p that would be a divi yield of 3.5% but would represent a return of 12% on your original imvestment of 57p per share.
Spreadtrader - I have no special insight into what the closing share price will be by enf of today, this week or this year and no forecast as to how 'old' dividend pot will be returned to us in tbe futire but I couldn't resist picking up on your earlier comment and suggesting a correction....
'Typical banks screw the shareholders'
Said in a tony montana cuban accent....
'nah this is banking first you screw the customer, then you screw the staff theeeen you screw the share holders!'
Like i said no special insights but hey it made me smile!!
Hiya danl good to see you on here and nice to see TCM hasn’t discovered card yet!! I agree but I was thinking that if the company raises cash in any guise with the message ‘we are going to close shops that don’t meet our profile and invest in our online offering so we can take on moon pig and funky pigeon’ it will be better received that if they did so with a ‘the banks made us do it’ vibe.
I’ve got an ‘opportunity stash’ that I would dip into for card if need be but I don’t think it will come to that if I’m honest. Although I make that assumption on the basis that the banks will be rational and logical when it comes to card factory and given how the markets seem to be behaving lately rational and logic don’t seem to be in vogue!
If the new ceo rocks up with big plans flr the online side of the business and partnering with gift suppliers or florists and he needs an injection of funds to realise this potential I can see a rights issue being supported and a positive market reaction. However if they are forced to fund raise because the banks are effectively saying we don’t trust the business to quickly recover when lockdown ends (and that’s kind of the message if the banks do force a fund raise) then it might well be supported but I suspect the market will have a more negative reaction.
Neverdone - nothing from Halifax yet for me. Nbrown did a similar placing recently and I held them in my sipp with ajbel, and my isa with Halifax. Ajbell sent me a corporate Acton communication similar to the one Davesgold refers to in his post below that simply confirmed an offer was Happening and they would communicate further when details emerge whereas Halifax only sent me something when the official invite was sent out.
I am assuming that there will be an rns early this week given part of the reason that the offer is being done in the way it is is because it’s quicker than alternative options and they need the money quickly. Once the offer is official that’s when I expect We will hear from Halifax by way of a corporate action.
Hope that helps. Cheers
A smithy, if you followed ezj all the way up from £4 to £9 and back down again and are not currently short on the stock why is it that all your posts are either celebrating when the share price drops or spreading doom and gloom about how any rise in the share price is doomed to be short lived?
That’s an interesting move. You would expect that Arcadia’s warehouse is geared for bulk distribution to stores so I wonder if boohoo are seeking to update the warehouse in order to make it suitable for picking packing and distribution to individual customers or whether them wanting it is an indication that they plan to adopt a wholesale approach for some of their newly acquired brands alongside the direct to customer offering?
Part 2
Covid-19 has provided opportunities too. Mick Cheema, owner of Basic Premier, one of Leicester’s legitimate factories, said many bosses were claiming furlough payments for staff while making them work as usual behind blacked-out windows. Dominique Muller, policy director at campaign group Labour Behind the Label, said furloughed staff had been given sewing machines to use at home.
Leicester’s mayor, Sir Peter Soulsby, estimates that the city’s clothes industry once employed about 10,000 workers in 700 factories, but hundreds of these have been shut by the pandemic.
Cheema believes Boohoo’s ban on subcontracting and the collapse of Sir Philip Green’s Arcadia Group, which also sourced from Leicester, means many businesses will never reopen.
Boohoo co-founders Mahmud Kamani and Carol Kane have deep ties with Leicester’s garment industry, having worked closely with factory owners during their time running the wholesaler Pinstripe Clothing in the 1990s. But it is chief executive John Lyttle, formerly of Primark, who is tasked with tackling the crisis.
QC Alison Levitt’s report on Boohoo’s failings estimated the company used 200 Leicester suppliers directly and a further 300 indirectly — though sources suggest that subcontracting means the real number is much higher. Sourcing director Andrew Reaney last year culled 64 factories that failed to adhere to a new code of conduct. Lyttle, meanwhile, has been courting new suppliers in Dubai.
Boohoo, which declined to comment for this article, insists it remains committed to Leicester and will issue bigger orders to a smaller number of trusted suppliers. The company is opening its own factory in Leicester to try to demonstrate that it is possible to work legitimately and profitably — though it is difficult to see how they can sell T-shirts for £3 while generating a return for themselves and suppliers.
Kamani has been focusing on acquisitions that reduce Boohoo’s dependence on the city that powered its growth. Brands such as Karen Millen, Oasis and Dorothy Perkins sell higher-priced clothes to an older demographic, while the £55 million purchase of Debenhams’ online business provides a foothold in the higher-margin beauty sector. Lockdowns that drove shoppers online have helped: in the ten months to December 31, sales rose 42 per cent to £1.5 billion.
While retailers insist they want to source more from Leicester, the city faces a tall order re-establishing itself. About a fifth of production costs are made up by labour. In fast-fashion hub Turkey, the minimum wage is £290 a month — less than 20 per cent of the UK cost.
Leicester’s factories hold a crucial advantage, though. Sourcing from the Midlands can shave two weeks off lead times, allowing them to justify a higher cost price for catwalk knock-offs.
For years, Boohoo enjoyed those benefits while Leicester’s garment workers paid the price. Now, Leicester needs Boohoo to start picking up the tab.