Member Info for shandypants2

Prolong sold £100k in 2 months (May and June 2018) so i'm assume H2 will be c£300k for the 6 month period. Hopefully it could be higher.

As part of the purchase deal for Prolong i believe we pay c £10 or £15 per product sold (in addition to the £1m upfront payment. That and the 6 week refund guarantee may restrict revenue a little but agree profit margin must be c80%.

Headmaster/Hair i'm assuming nothing as yet. It will be a 'soft' launch and i am not convinced it will be launched on time - Prolong was about 9 months late!!

Happy to be proved wrong

so after the AGM the share has taken another battering and the negativity is back (especially on ADVFN).

If this share is to reach a decent value (c£2 a share) then the year end results for 30/6/19 MUST be hit. There are no more excuses. Whilst HC and IDP have reiterated this commitment the fact that they said H1 would be flat is a concern, especially as Roots will probably generate £1m more than this time last year (my estimate is £0.3m for H1 2017/18 and £1.3m for H1 2018/19. Also this does seem very similar to last year when even in Feb 2018 HC was committed to meeting year end figures and then 3 or so weeks later we had a profit warning.

So i remain optimistic that year end figure will be meet, but mindful that HC commitments carry no weight anymore.

I can't see how SD sales can be having such an impact IMHO. We have more SKU nows in SD, and DTC sales were up 20% according to IDP (and i believe DTC is larger than SD). I also think the overseas sales must be an issue. Last year both Oz and US had large declines (c40%) from a low starting base and the comment that we are UK focused this year , whilst logical, might also infer that overseas sales will decline even further.

HC says he's been humbled by the criticism over the last year or so, and rightly so and feels he needs to turn things around - not sure how the recent share sale will help his cause here (although i'm not going to be too hard on him here as he still has 27% of company, so the scare tactics that he is cutting and running are pathetic).

Anyway back to numbers.
H1 last year was £4.2m and H2 was £6.5m. For H2 this year we need c£10m.

Is this achievable.
I think Prolong plus C+L combined etc could generate £0.5m
Overseas in total c500k
Roots £1.5m

So ST needs to generate £7.5m - based on last H2 an increase of £2m (assume UK sales of ST were c£5.5m).

I personally think the initial Boots order will be c£1m and depending on sales an extra £1m is achievable in peak tanning and across 1250 stores. The issue is whether SD sales continue to decline and if so where will this replacement come from? I was expecting DTC to offset and SD decline but this clearly isn't happening in H1. There is also a possibility that Prolong and Roots H2 numbers could be even higher but best to keep things conservative until told otherwise.

So the £14m numbers are achievable - IDP just need to prove it now. I'll sit back and wait for the June trading statement before selling

agree with Boon - H1 similar to last year will be a big disappointment as Roots will be contributing over £1m more revenue than H1 last year. So clearly ST will not be selling as much both in UK and aboard (US and Oz performance was shocking last year).

Clearly if we hit year end targets this share is undervalued but I was expecting H1 to contribute to this growth.

It's not a great RNS, but not terrible too

unfortunately i'm unable to attend tomorrow but if anyone is i would appreciate an update.

Along with the expected questions re progress this year and HC share sales etc here are a few questions that i would love answers to

1) why were overseas revenue so low in 2017/18 results ? What actions are IDP undertaking to improve them?
2) when/why did Jess Porter (employed to increase US sales) leave?
3) if US sales for full year were so low why did IDP mention an issue in USA regarding June sales as part of the profit warning? Surely this would have been negligible
4) what are Prolong sales (in units) for this current FY (so July to Oct 2018)
5) do Boots have some kind of exclusivity deal re ST next year or are IDP free to do other retail tie ups
6) in 2017/18 it appears that IDP employed an additional 40 staff. Are staff costs still rising or have they now peaked?

Many thanks in advance

Hopefully some positive comments re progress year to date should see share price back above £1.50

online sales through online clothing retailers have been 'negligible'. I recently asked this question via IR and this was the response.

IDP is all about Roots and ST and the 3 main UK retailers (and perhaps the 100 or so Ireland stores) and DTC for the next year or so.

It would be great if Charles +Lee and Prolong made a decent contribution and if ST sales picked up again in Oz and USA but UK is the driver.

Sales in UK are the key.

Whilst Boots online sales are a good indicator if 2 bottles of Roots were sold in each of the 359 large Boots stores that's over 700 a day. If it rises to 3 that's over 1,000. Online sales will be less than 10% of total sales, perhaps less than 5%.

Hopefully some positive comments re sales at the AGM next week will get confidence back in this share, after all we've now had 4 months trading in the new financial year.

Greg also your post on ADVFN re sales at SD falling is false. Sales at SD increased last year by 12% and this has been confirmed by Investor Relations that this is by revenue and not units. I am happy to except that much of this will have been in H1 and the extra SVUs such as BodyGlow would have offset flatlining of 'pure' ST but overall sales are still increasing.

We also now have a full year of c100 stores in Ireland selling ST which were added at various points in the last financial year so would have had limited impact on 2018 numbers.

Incidentally when i questioned poor sales in Asia and USA IR confirmed that Enbright has been delayed in Korea due to poor take up of ST whitening and Jesse Porto the man appointed to get IDP on the shelves across USA has left the company.

Whilst overseas sales were v.poor in 2018 and hopefully can be improved in the current year 2019 targets can IMHO be met almost exclusively with UK sales if the Boots sales of Roots and in 2019 ST go to plan

clearly they have massive issues but CAKE was valued at £440m before its suspension this week.

That's c4 x revenue and a PE of 25.

It was growing by 10% a year so was still classified as a growth stock.

A conservative 2x revenue (2019 target) has IDP at c£2 a share and a PE of 20 has us at c£2.20 (same price as FinnCap).

PE can be a difficult one (Amazon didn't report a profit for year but was valued in the billions) so i like to use multiples of revenue. Consensus seems to value grow shares at between 2 and 4 times revenue.

Based on 2 x 2018 revenue this should be c£1.50 and if we hit 2019 targets £2.

as a long suffering GKP shareholder from years back i, and many others, will never get my money back. However, i have topped up a little in the last year or so to hopefully reduce my losses a bit.

Can someone please tell me where we stand re Kurd govt payments for previous years when we got a flat fee per month rather than based on barrels shipped.

How much are we owed and what is the likelihood we will get this back payment. What is the estimated timeframe for any payment.

Many thanks in advance

i've stopped trying to predict this share. Idp was briefly over £2 on 19th Sept and has since lost almost 50% of its value without the fundamentals changing. Clearly the HC sell has both created a share overhang and negative sentiment. Hopefully the overhang is now clear.

IMHO anything under £1.50 is good value as if we hit year end targets then this should be £2 plus. Its always difficult to predict the bottom (i've bought on the way down at 130,118 and 105 - so i'm not a great judge) but hopefully any positive updates next month will see this 50p or so higher than where it is now.

Incidentally, at AGM i hope Board get some tough questions re non UK performance which was woeful in 2017/18 and also HC's share sale timing. Unfortunately can''t be there myself.

unfortunately it would appear MM have a large overhang of shares due to HC sale and have been happy lowering the price over the last few weeks.

IMHO i think the institutions who bought at £2.76 only this time last year (14% discount when share price was over £3) had their figure burned only a few weeks later with ASA warning so have no faith in HC. Recent sale appears to have just been absorbed by market (as was May sale) so share price has had massive swings.

We need the overhang to clear and then KC to start showing that company is moving in the right direction. We need to hit numbers for 2019 and 2020 to restore confidence and this will show share price is massively undervalued. At present IDP is valued only slightly above 2019 revenue targets which is very low.
Had another cheeky top up at 1.05 today, but wouldn't be surprised if we see £1 before the AGM

Many thanks Happy. Whilst i agree with the price target Finn Cap has massively underestimated Roots (perhaps as no financials were released until Sept 2018, after this was published). We have already sold almost £1m in just over 10 months from a standing start so 2019 projects of £0.7m is clearly way off.

I think Boon has previously estimated this to be c£2.7m rev for Roots in 2018/19 and i have gone for £3m. I've tried to keep these numbers reasonably conservative as it is possible SD sales may be impacted by Boots and in particular Tesco sales but this could be offset by more SD stores and an increased product range. DTC will increase too.

As IDP needs to increase rev by £2.7m to hit target, and Roots could do £2m of this then all the other products only need to add a further £0.7m.
C+L and Prolong will do better this year (albeit from a lower base) and ST is in 1,250 Boots for peak tanning season.
Based on this i will be very surprised/disappointed if revenue doesn't exceed £15m for the full year.
Obviously profit is king, so hopefully KC will be more focused on that than HC and will ensure targets are hit too

Thanks for that Boon. Not saying you are wrong but where has the info re last year (2017) being 35% SD and 65% DTC come from?

Looking back i remember reading calendar year 2016 (c£6m rev) was 50% DTC so i assumed other 50% was SD. As DTC orders were c10k a month at £25 an order that seemed to ring true.

For 2017 calendar year sales were c£9.9m and we were told that SD had increased by 100% and DTC by 10%.

So if DTC was now £3.3m and SD c£6m (with non UK accounting for rest)

These were just back of a fag packet sums based on info provided at H1 updates and calendar year is not IDPs financial year. I have not really taken non UK sales into account so SD figure may be a bit lower but would be surprised if SD is not at least matching DTC if it grew by 100% in 2017 even with flat SD sales and DTC increasing by 20% for ST in 2018.

Boon - many thanks for that. I did look last week so must have been added soon after. Excellent progress by IDP, so well done. Although this is a Aussie website it does allow shipments to US and UK (for a fee!) if anyone fancies buying it please let everyone know if the products are good. As with other IDP products they are not cheap.

Just been looking at SD sales of ST. Did i read that YoY SD revenue increased by 12% at SD? I suspect much of this was achieved in H1 when revenue was up 31% (3.1m to 4.2m). ST still represents c90% of all IDP revenue and I suspect 90% of that is sold in UK so SD is still massively important. Boon i think you have quoted SD sales at c£3.5m - personally i think this is a little low and might be nearer £5m.
I have checked ST availability in SD stores since the March profit warning and rather than reducing orders i think they have chosen not to increase them - so when a new SVU is introduced it has been added to existing shelf space rather than extend - this is definitely the case with Face. Online ST is still doing well at SD - of the top 40 best selling tanning and bronzing products ST has 14 (although highest is 11th) and this includes the recently introduced Body Glow and Body Blur. If SD revenue for this H1 is at a minimum the same as H1 last year and DTC keeps growing plus i think we are now in 200 Ireland stores (which we weren't this time last year) hopefully ST can produce higher H1 revenue than this time last year. In my H1 estimates i assumed flat ST sales - you also mention the professional salon tie up which is a good spot. New CEO KC referred to ST as still being in it's infancy as a brand so he clearly sees much room for expansion. Maybe USA will make a contribution too as Jesse Porto was added this time last year for exactly that purpose.

I keep buying and recommending Roots to people (mentioned it to my barber last week) as word of mouth is the best form of marketing!!

Seanx re PE valuations. Notice SOS (a smaller version of ASOS - which has a PE of 66) announced results today. It is fast growing but has yet to make a profit. On H1 sales of £1.8m it has a valuation of £40m - so my 2 x revenue valuation is very conservative for a growing company.

There was a trading/operations statement at the AGM last year so i suspect we will get the same this year. At a minimum we need this to be inline with management expectations. It would be great if we could have some positivity back e.g 'best ever revenue figure for Sept', 'Face performing above management expectations' etc

Boon - yes hope you are right re Charles and Lee. However, the shaving range (great idea) is not yet on their website so i presume not in shops yet too which could limit H1 sales. I notice you estimate full year at c£500k - hopefully you are right.

Prolong is almost impossible to estimate based on 2 months sales and now no proactive marketing. I wanted to keep numbers low so went for zero but profit margin on this will be high so hopefully even 100 units a month will contribute to the bottom line (say £100 profit a unit so maybe 10k a month!!).

Maybe we'll learn more at AGM on 7th Nov.

Growth shares are always difficult to value - a PE of 20 is reasonably conservative and a 2 x revenue price is very cheap. FOOT is definitely not a growth share so has a lower PE

2x next years rev gives a share price of c£2 and a 20 PE c£2.20. Usually these are forward looking so not sure what 2020 projections are but a rev of £18m and profit of c£2.5m are not overly optimist which would equate to a higher share price still (as long as 2019 targets are met).

For comparison FeverTree is perhaps the best growth share of the last few years. It has a PE of over 100 and a price x revenue of over 20. Incidentally FT owners have been selling shares by the bucket full over the last year or two and yet the share price keeps rising - not bad for a single product company that has risen on the back of the gin boom. So IDP's lower valuations are IMHO reasonable.

I have also tried to keep my revenue projections, below, reasonably conservative e.g Roots is still a growing brand so SD sells could still rise (more stores, more products) and it's in Boots' largest stores so 2 sales a day is not overly taxing , Charles and Lee sales should benefit from more stores, ST now has more products etc and Prolong is still being sold albeit without any marketing (i have estimated zero for this).

These are just my starter for 10 without any formal numbers to back this up (although IDP did say performance is in line with expectations in Sept), i am happy for others to offer their own view.

I just want to get this board back on IDP and not on HC which is where ADVFN in particular has been for days.

Incidentally Roots started trading in SD in Aug 2018 (350 stores) and this was increased to over 500 in Nov 2017.
Roots has started trading in 359 Boots stores in Aug 2018. If number of stores is increased before xmas that is a really positive sign that sales are doing well.

last year H1 revenue was £4.2m. Roots was only launched in August 2017 in a limited number of SD stores so sales in first few months would have been quite low so i think the £1m rev for last financial year would have been heavily weighted in H2.

Therefore, maybe revenue was split £3.9m ST, 200k Roots and 100k everything else (C+L, Leimo and Stevie K etc).

Now if IDP hit revenue and profit targets fro 2019 and 2020 then this share is seriously undervalued. We have the new retailer contracts sorted and product extensions have also been added we just need to deliver now.

Rev for this year is targeted at £14.4m - this is a 26% uplift on this year (£10.7m). Therefore we need H1 to show a steady increase to inject some confidence back into he share price.

If ST stays steady at £4m (higher DTC and more products and more non UK outlets should offset flat SD sales) then Roots should provide most/all of the growth.

If H2 last year produced £800k rev via SD and DTC i think this can at least be maintained as there are now more SD stores and more products (to offset some sales decline due to Boots).
Boots could be selling £100k a month (800 bottles a day, 100 online plus 2 per store at £4 a bottle) that should contribute £400k extra and Tesco's initial order maybe £100k. So Roots could produce sales of £1.3m. If all other products contribute another 100k too that's...
£5.4m revenue - a 28% increase.

With revenue always H2 weighted and with ST going into Boots in Feb/March 2019 (initial order has been conservatively estimated at £750k - based on 5 bottles per product) then we are definitely on track to meet and hopefully exceed these targets. If so a share price of £2.20 based on PE of 20 could be seriously undervalued.

If Roots goes into more Boots stores then H2 numbers could increase further.

For full year i'm expecting Roots rev to be c£3m. This is based on little increase at SD (£1.6m for full year, based on H2 2018) £1m from Boots (100k p/month for 10 months) and Tesco £400k (50k p.month for 8 months) and it is a growing brand that is to be launched in other countries too.

I am trying to focus on the numbers rather than speculate why HC sold a small % of his large holding (the overhang is clearly dragging the price down in the short term)

yes, SCSW are very negative towards IDP and particularly HC and have been for some time. HC's recent share sell hasn't helped. When there is negativity around IDP it seems to get over hyped and the share price reacts. Anyone can highlight a bad review, as you can a good review - no product is for everyone, so i look at averages to get a clearer view of the product's success. From experience best to sit back and ignore it (or top up - just managed a buy at 118).

We have a new CEO and new retailers - let the company deliver now. If they don't fair enough criticise, but for now this is a nothing story. Hopefully we can get some positivity on or before the AGM to show we are moving in the right direction. It would be nice if HC also said he is committed to the company (i'm sure he is but people will speculate and use the share sell as 'evidence'). Roots in more Boots stores would be a great RNS before xmas!!!

Without Greg to provide updates i've just checked on Boots.com and the sensitive shampoo is now in the 150's of best selling shampoos (out of 465). Decent progress in less than 2 months. The same shampoo is No 4 in SD BTW.

Just checked last year's AGM statement (from Nov 2017) and in it Roots expansion across further SD stores was announced. Hopefully we can get a similar announcement this year from Boots as ST sales appear to have flatlined until the SD exclusivity ends next Feb. Therefore Roots expansion is critical.

IMHO i wonder if HC and Callam had agreed that HC wouldn't sell any shares in say the next 2 years to give new CEO time to improve the share price. He may have bonuses linked to the share price so any HC further sale would impact this. Hence HC sold at hand over to avoid issues further down the line.

HC created the company had a massive amount of its shares (still has almost 30% between him and his family) and even loaned the company money to start up (which incidentally has now been fully repaid). Many of HC's actions appear to be made by a man who feels he can do what he wants. However, now his influence on day to day issues has been reduced which can only be a good thing and areas such as logistics and cash management which clearly weren't his strengths are no longer his responsibility.

Callam can get the 2 big products (ST and Roots) delivering the profits and HC can focus on the Life Science division, an area he has always talked up. Now he has no excuses for not delivering in this space.

Now the dust has settled after the last couple of weeks IDP can go back to delivering 2018/19 numbers of £14.4m rev and £1.6m profit. If these are achieved then share price should be in excess of £2 per share.

New retailer deals have been achieved, now it is a case of delivering to ensure sales are maximised.

H1 growth will be driven by Roots (as ST still in UK exclusivity) and H2 should be both ST and Roots (and maybe Prolong) as Boots (ST) and Tesco (Roots) impacts sales.

Getting ST in 1,250 Boots is a massive achievement and Boots and SD customer base has minimal overlap. If Roots can increase Boots store coverage in H2 then we could really fly.

Good luck to all long term holders