Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
To clarify, the article is about Boohoo, but mentions Asos. It's boohoo's credit cover that has been affected in the last few days (Not Asos's), to take effect in September. Apologies, in my last comment, I didn't make that clear in the first sentence.
Not a particularly encouraging article in the Sunday Times today. It reports that credit cover has been slashed for its suppliers. Allianz Trade has reduced cover by an average of 50% for boohoo suppliers, but some have had coverage levels cut to zero, effective from September. The Times reminds us that this situation negatively affects cashflow as suppliers increasingly request payments upfront. It stated that Asos was in a similar postion in May, and that as a result it was one of the reasons it was forced into raising capital of £75m and also had to arrange an expensive revolving facility at 11%. They also say Shein continues to undercut both companies with cheaper products direct from China.
Of course, there is nothing new in this article that we didn't already know about Asos. However, it may put pressure on both their SP's tomorrow. More ammunition for the shorts.
Tinybuild IPO price March 2021 £1.69. Started trading at £2.13p.
The founders made a killing and took a lot of money, but also retained a percentage.
Questor tipped the share as a hidden gem.
Just over two years later we see mid-price of 9.75p
There's no other way of putting this. Small private investors have been screwed.
What are the chances of people recovering their original 2021 investment? Answer: Zero.
Moral of the story. Never invest in a 'single share' particularly if it is on the less regulated AIM market.
I'm disappointed in the big drop in valuation. I misunderstood the reasoning in investing in these types of funds.
I thought most infrastructure investments were 'relatively' safe because the underlying contracts were inflation linked, so that the income the trust derived would rise proportionally. To me, it was sold (through press commentary and various sites) as a fairly safe bet re yield, but with the prospect of a little capital growth.
I now realise that the price changes a bit like bonds do. If one has high interest rates, the price reduces. As interest rates fall, the sp should recover. Nevertheless, I am annoyed that the 'experts' in the investment industry 'mis-sold' these types of share. Clearly they didn't understand the product themselves!
As DonBronco mentions, the shorts have been hiding under the o.50% declaration requirements. At 2.58% and without any further rumours of an approach, this is becoming 'nervous' territory. No matter what anyone says, there are hedge funds out there who clearly still see a quick killing to be had. More often than not they are right. This share, in my view, will hang below the placing price of a few weeks ago for a while. Failing any positive/negative update between now and September at the earliest, I see the share wavering between the 3.50 to 4.00 mark. I do sense that progress is being made. However, the CEO really should be buying when he has the opportunity (given he's not within the banning period). Also, when a founder director sells at £4 and a CEO doesn't put faith in a share, what message does that give out? To see some purchases from the present executives would give the sp a fillip
The H2 forecast from the company is anywhere between £40m and £60m. That seems a very wide range. They're clearly hedging their bets on the cost savings. The full year end will still be a loss although analysts will see things as positive if they get somewhere between their forecast figures. Cross fingers.
The moment Nick Robertson sold a million quids worth of shares at £4 was the moment people took fright. Very untimely indeed and if he had full confidence in the shares, he would have held on. The CEO doesn't seem enthusiastic in buying much either.
Revealed Shorts have crept up to nearly 2%. Anything much above 2% will be an ominous sign.
So much for wealth preservation. I invested about £10k about a year ago. I now have £9.5k. It gives a new interpretation of the word 'preservation' lol. I realise they caveat their objectives by mentioning 'long term' investment, but I must admit to being disappointed to date. I think it's clear that if interest rates come down, then bonds will add value. Nvertheless, over this year, I think it would have been more prudent if I had fixed my savings in a building society account!
I simply do not understand how a company with a head start in terms of 'storage' in all it's forms, can go off course like this. Good riddance to the CEO and CFO who steered the group into this mess.
This company, in my view, still has the potential to be a growth stock provided the right people are in charge and stick to the core business rather than trying to gamble on short term digital contracts and fads.. In many ways its a licence to print money, given the amount of businesses that must be looking for a dedicated storage facility. The potential must be huge.
So why am I holding back? The company may be rudderless for a while although they ave started cost savings already. Time to take stock and review in a few months. I'm not going to average down. Learnt my lesson from previous experiences.
I suggest that very few people bought at the bottom, simply because even if they had wanted to, the brokers were regularly putting temporary holds on attempted deals due to the volatility at the time.
I'm tired of the vagaries of the AIM sector. The actual reaction to a set of poor results always seems to be magnified on this exchange.
For what its worth I may as well hang on to the holding I have in the hope of a miracle. I'm still wondering how Luke Burtis feels. At least that gives me some consolation!
As for the CEO....he may know his way around a game, but as for business acumen, he knows sweet FA.
My final thought. What happens in about a year's time when the cash has run out?
No wonder the CFO resigned two weeks ago. He knew what was coming.
The drop seems harsh. This was due to be a long term hold for me. I saw it as a company in a sector that would be in high demand for the foreseeable future. I'm loath to sell at a low though.
Ginksy: You've not followed this story for long have you? This company has screwed investors. There have been far too many unanswered questions in the last few months. Too many dodgy events in the last year. Additionally, one has the creative accounting of capitalising large amount of costs, thereby achieving what is considered to be a false 'profit' , whilst eating into a large amount of cash. Consequently, unless they curtail expenditure, there will be a need for more cash within a year, as reinvested cashflow has been put into poor performimg products.
The CEO (the joint founder) has made his millions by going the IPO route a few yrears back. As for everyone else, they are basically screwed. This company is a disgrace.
.........Oh, and I forgot to mention, we never did find out the reason for the massive drop in the share price in March. That in itself stank of shares being dealt in in huge amounts without any RNS updates re shareholder details. All the warnings were there at the time. We live and learn.
I've been away a few days and had not looked at this. I'm now incandescent with rage. Incredibly angry. A few days ago It was 34p and now it's 9p. I had averaged down over the last few months to about 90p. I've basically written this share off, given it is virtually impossible for this share to recover significantly to recoup my money. Basically, we've been taken for mugs.
Firstly, why the hell did I listen to Questor in the Telegraph a year or two ago when the sp was over £2 ?
Secondly, why the hell didn't I go by my gut reaction a few months ago when the Tinyworld 'team' did a broadcast about their updated figures? I said on here at the time that I wasn't impressed with the presentation and said that this looked like a 'one man band'. The CFO seemed out of his depth. It was all too laid back and stank of lack of corporate governance
The only satisfaction I get is seeing that Nichoporchick has lost a massive amount of his own share value, although he (and his wife, for some reason) has taken out a lot from this company. Luke Burtis, co-founder (who has not been part of the business for quite a while) must be sick as a pig.
I've been in this situation once before. It all STINKS. In the last scenario where I lost my investment, the updates became less frequent, (but continued with a positive theme), and eventually the shares were de-listed from AIM due to delays in updating, and the company was dissolved, and the directors disappeared. I'm getting a horrible feeling of Deja Vu.
And finally, as they are going to run out of money soon, don't get conned when the rights issue comes along. My advice is to tell them to eff off.
Hereshopin......perhaps he needs some cash? .....Lol. There is no way this guy is desperate for money. The only reason I can possibly think for him selling at this point is that, given the position he is in, he can only deal at certain periods of the year outside periods of official announcements, updates, and results etc. This restricts him. HOWEVER, quite frankly I am disgusted by his need to find a million quid by selling at an almost all time low. I could understand it if it was a guy who had bought at 3.25 and sold at 4 for a quick profit, but this.....this is the action of a plonker (unless of course he knows something we don't.....which I suspect is unlikely)
I go back to the comments made by 'Barhut' when he said this afternoon.......''Nothing like showing confidence in your company, when a director sells shares at the bottom . This sounds alarm bells. Before anyone shouts at me ask yourself, does this person really need the money. Has to be the worst timing''. I have to say that I didn't disagree with him. And look what the markets thought of it, down nearly 10%, and curtailing the momentum. Thanks Mr Robertson for nothing. I just find the actions of the man unbelievable.
Am I missing something? At this price the yield is 7.38%. Okay, if base rate rises again, then this could drop a little bit more in value. However, once interest rates settle down at a lower level, this preference share will continue to pay out a nice div with also the prospect of a bit of capital appreciation. A pretty safe holding in my view.
West6809 ....(part2)....It is possible to see the appeal. The online fast fashion houses have some decent infrastructure, and a substantial online presence. They know how to source clothes and ship them out. And perhaps most of all they are very cheap. When the value of a company has fallen by 99pc it is not hard to convince yourself that it can only improve. No doubt the bankers can make a decent case for launching a takeover offer.
Even so, they are not really worth all the attention they are getting. First, they don’t have any real brand value. People have heard of Boohoo and Asos, but they are a long way from having the kind of loyal following that the leading designers have created, or that chains like Zara or Primark command. Even worse, their core teenage and twenty-something demographic is suspicious of their ethical and environmental standards.
They much prefer buying pre-loved clothes online to what they often see as cheap tat. There is zero loyalty to any of the online retailers, and that makes customers very fickle.
Next, the market is brutally competitive. In any online business the margins are always wafer thin. It is simply too easy to compare prices and a better deal is never more than a click away. But online fast fashion takes that to new levels.
As well as intense competition, the marketing costs are also huge, with advertising and influencers ramping up the cost of every sale. It is a very hard way to make money.
Finally, costs will inevitably rise. The era of ultra cheap manufacturing in developing countries is coming to an end, and the logistics that delivered stuff around the world efficiently have never recovered from the pandemic. The one pound tee-shirt is not necessarily coming back any time soon.
In fact, environmental standards, and net zero commitments, with even container ships switching fuels, means costs are likely to keep on rising for the next few years. That does not matter so much for retailers that rely on design to keep customers loyal, but if you are selling mainly on price it is a big problem. If you aren’t the cheapest product on the market you lose your customers.
Over the last two decades, there was real money to be made from swooping on traditional retailers as they ran into trouble.
It worked for Philip Green in his heyday, and it has worked for Ashley over the last few years. But those were all chains with physical shops on the high street, loyal customers and brands that had been built up over decades.
They might have been losing money but there was still value there. None of that is true for the online retailers that have run into trouble. There are no easy profits to be made. It is better just to let them fade away – and allow them to be replaced by newer, sharper rivals''
West6809....A fairly cynical piece in my view but with elements of reality chucked in.
West6809.....I thought I had posted the full article. Maybe it's only available to subscribers. I've tried pasting the full article here but as it's lengthy will have to do it in two bits.
Boohoo is fighting for control of its rival Revolution Beauty even though there are plenty of questions around its own survival. Asos is fending off approaches from Mike Ashley and a Turkish bidder backed by Chinese money. The Hut Group was about to be sold to a private equity firm, and then wasn’t – at least for another week or two. The UK’s major online fashion retailers have almost as many bids as they do cut-price summer T-shirts and shades. Offers, approaches and minority stakes whizz by at bewildering speed, making a sector once known just for its fast fashion just as noteworthy for its fast deal-making. After valuations collapsed many of the major online retailers may well look like a bargain. And yet their brands have little real value. The market is brutally competitive with wafer-thin margins, and the supply chains that used to deliver ultra-cheap clothes to their customers are a thing of the past. In reality, it is not worth all the squabbling and infighting. It would be better just to let the whole sector quietly fade away, and be replaced by businesses of greater substance. The UK’s fast fashion empires, which once promised to build on this country’s traditional strengths in fashion and retailing to create major internet successes, have turned into a sorry shadow of their former selves. From almost 400p back in 2020, shares in Boohoo are down to a fresh low this month of just 34p, a catastrophic fall in value. Shares in Asos are down by 93pc over the last five years, and are hitting fresh lows this month, a dismal performance for a company that at one stage could have joined the FTSE 100 if it had been listed on the main exchange at its peak instead of on Aim. Meanwhile THG is down by a mere 90pc since its peak, helped by takeover speculation. Put them all together, and the sector has completely crashed, and shows little sign of recovering any time soon. Against that dire backdrop, it is probably not a surprise that the vultures have started circling. The private equity house Apollo offered to buy THG a few weeks ago but the deal fell through, and now its founder Matthew Moulding has lifted his golden share in the company, presumably to encourage another buyer to come in. Boohoo is locked in a struggle for control over Revolution Beauty, although it is hard to understand why anyone would want it. Meanwhile the ubiquitous retail tycoon Mike Ashley took a 5pc stake in the business, and presumably now has his eye on a full takeover. Ashley has also snapped up a 10pc stake in Asos, not long after the Turkish retailer Trendyol, backed by China’s massive Alibaba, made an offer for the business. At this rate all three companies will soon have more bidders than they do customers. It is possible to see the appeal.....
Ahttps://www.telegraph.co.uk/business/2023/06/25/online-fashion-boohoo-asos-not-worth-fighting-over/
Fairly critical article about the fickle online retail sector