Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
PTP of circa £20m on revenue of £450m is my projection.
Christmas will push the year into a small profit.
The ability to lower debt is going to be very constrained and therefore dividends are not on the horizon especially when cash is only burnt until end October.
Watch out for massive capitalised soft costs ref the 'strategy'.
PTL of circa £20m on revenue of £180m is my projection.
Even the most artistic of CFO's won't be able to make a profit out of that.
The period is already over half way through so little time to rescue the figures.
The spring season profit warning hasn't helped, and the continuing decline in sales and margins, coupled with massive cost increases, makes a loss inevitable.
With the new store concept being an operational disaster, and the latest new store a sales disaster, its not looking great at the moment.
Rox, if anyone deserves to make a few quid from CF it is you, and good luck to you, well deserved!
Don't think we have got it wrong though. The debt was never an issue, and we can all probably make hay with share prices going up and down. The problem is there is not the slightest sign of profit recovery, and there won't be. Following my perfect prediction of the Christmas results, I will post the HY and FY23 figures in the next couple of days.
Quick note on management buying shares - what's surprising (if everything is as rosy as the management say) is the lack of management purchases. Never known management have such a dislocate between what they say and what they do. Make our own mind up.
I've had chance now to digest todays report. You can forget about dividends. No chance. Not ever. Not unless a total change of direction is made or there are outside influences. FY23 won't be pretty. Expect £20m net at best, if not substantially lower. There is no chance of dividends after paying tax, interest, loan repayments & capital requirements. Revenue of circa £450m is dead on. Only reason any net profit FY22 is due to government bungs. Forget growth. Forget 'the strategy'. Forget ERP. Forget 'partners'. This is going nowhere. They know it. You know it. Nothing of any substance is happening. Just the usual 'ahead of expectations', 'strengthening', 'transitioning'. What a load of b. The reality is negative sales and massive growth in costs. You don't need me to tell you where this is heading...
I'm afraid the continuous decline in l4l sales, lower gross margins, and massive cost increases, have put paid to those sort of figures. All successful retail business have continuous l4l saes increases. CF have proved for years they are incapable of getting any. There still isn't the slightest sign of any growth from the stores, and even the web is failing. Not to mention the wholesaling.
I cannot see in any of the recent reports any guidance for FY23. The only mention is revenue approaching 'pre-pandemic' levels eg £450m (as in FY20). Have I missed it? It would be good to have cost and profit guidance as well as revenue. If not, then it is easy to calculate net profit anyway. Probably about £20m.
Well that was a non event. No movement at all towards the £600m dream. Thought I had heard all the spin possible over the years but this was a new one: 'We are seeing some mix shift in our Spring seasons (Valentine's Day and Mother's Day) towards everyday'. In English - Valentine's Day and Mother's Day was a disaster.
Who knows what the share price does, but the basic business heads south.
Brilliant poetry! Shame cards are cheaper than stamps. Guaranteed way to help your sales figures though. If l4l card sales were reported you would run a mile from these shares. Best not assume upside only, and downside limited to perhaps 10% fall. It is entirely feasible the shares crash to halve their value sooner than you think...or even more.
Why is anyone expecting anything different this time? The only 'good' news has already been published via the RNS.
What does that leave? Confirmation of the figures already reported in January, now including January, plus an update on current trading. Unless January was a disaster (which is likely), the year end figures shouldn't be that far out from what has already been reported. Trading report since will have plenty of opportunity to 'spin' the story and figures. Leave the reality for a later stage. The most obvious news will be additional costs, lower margins, negative sales l4l, web going backwards, and no progress towards the £600m sales. Selling more stamps than the Post Office will only hide the truth for a certain period. The most interesting things is how they spin it to be positive.
Something I can absolutely guarantee is that the update will be positive! Every directors report since profits were £100m, sliding to zero, has been positive. Anyone that knows what they are doing ignores the spin and picks out the important facts that the BOD can't hide. Like haemorrhaging customers, out of control spending, non profitable sales etc.
Everyone assumes that Lombard have got it wrong. Big mistake. They may be taking a longer term view. The market gets things wrong all the time. Like today. It has been obvious for months that debt is not a problem for CF. Therefore the RNS should not have been a surprise. The debt is more of a problem for the banks who have no option other than to refinance. The BOD should have got rid of the div restrictions though, and the fact they didn't/couldn't, doesn't bode well for current trading.
I suspect the full years figures won't spring any surprises. Trading since year end is more important. Expect more of the same - under pressure...headwinds....inflation....better than expected.... A profit warning to be blunt.
What an opportunity for those who have been underwater to make some recovery? Nobody expected a capital raise so why the excitement? Anyway, its obvious who's in charge, and it isn't the management. Restrictions on dividends gong on for years? Some recovery - not. Clearly a reluctant refinancing, with banks that had no option, and management with no choice. Obviously poor results to come and banks that assume no recovery.
I don't see why anyone should think the results are going to positive, except maybe debt has fallen. There is no reason whatsoever for trading to have improved, or their future prospects. Without doubt, another dressed up profit warning is coming.
Hi Harrybarker You've got me wrong. It is a great business with great people selling a great product. However, it should be in private hands. It cannot, and will not, ever satisfy the market. There is no growth story. It is good for investors to read the truth, even if they don't want to believe it. There may be money to be made in the shares. Who knows? But long term hold is extremely risky. Profits will decline and with the current management, quicker than you would think possible.
Roxbury. Glad you enjoyed it! And your holiday.
I wouldn't worry about dilution or debt. They are not an issue.
What is , is the sales and profit disaster. Nothing has been done to arrest the constant sales and margin decline. Coupled with the massive and permanent cost increases, there is only one outcome. Another big fat profit warning.
None of the £30m profit warning in the last RNS was for exceptional one off costs. It was simply costs and margin. For example; product mix (eg stamp sales) hidden as 'cost' increases, wage increases (which are accelerating), other costs.
The investment in web is marginal, and unlikely to produce any profit returns. They have missed the boat on that one and have no idea. Therefore, what are 1000 high street shops worth? A lot of people would say 'not a lot'.
They have options but there is no sign of them being taken.