Member Info for simon1367

It's interesting that MA has once again dipped his toes into selling some put options for expiry during Dec '24 and Sept '25. Whenever the price lowers to around £3.70 - £3.80 he earns himself (or rather Frasers) a nice upfront premium in the hope that the SP rises above the strike price. Far more often than not he has won the bet. This bodes well for the impending results, which shouldn't bring too many surprises given the last update. I suspect there will be little price movement when announced (famous last words!). However, medium term, MA is essentially gambling a little on the price being higher next autumn, but more so in December this year. That's encouraging. Declared shorts remaining below 2% is okay, under 1% would be great. As for my namesake saying 'shorts are up,' well yeah, by 0.01% yesterday, hardly a disaster! Not long ago they were in the top 5 most shorted. Now they are 32nd.....quite an improvement. Overall the main concern from my point of view is, despite reducing the debt pile with the sale, the liabilities and interest rate on borrowing remain too high and I seem to recall (correct me if I'm wrong) a large chunk was negotiated at quite a high fixed rate (which isn't great when it is expected that rates are due to fall).

On the old subject of clothes 'returns', the Telegraph yesterday highlighted an increasing issue with the Gen Z brigade. There's a continued rise of Tiltok 'haul' trends whereby social media users are taking the mickey. Online returns (combined retailers) are forecast to exceed £27billion this year with 'serial returners' estimated to be nearly £7billion. On average, each 'serial returner' is sending back £1400 worth of goods each year. This erosion of retail profitability has to stop somehow. Margins are so small already. I know companies like Asos and Boohoo have instigated new procedures in trying to identify the culprits but more has to be done as it directly affects the bottom line. I remain cautiously optimistic that Asos will be one of the survivers. Not so sure about Boohoo; I suspect the K's will try and get the biggest break-up value they can, then jump ship leaving the shareholders truly p***** off!

Fear not Ammu, I'm still here in the background; I am simply avoiding the recent verbal diarrhoea on the board.

As you know, I regard 'short' positions as highly significant. For Asos to reduce to 1.69% is very encouraging; it is now the 37th highest shorted share as opposed to Boohoo being 5th. If Asos can stay below 2% prior to the results announcement, and there are no unpleasant surprises, then we may be seeing a turning point.

I do not put this wholly down to Asos' executive competency, although they have imo, seemingly finally pulled their finger out to a degree. I sense that the macroeconomic (cyclical) environment is also about to turn in their favour, providing they can continue to work towards an ongoing model that is sustainable. They are not out of the woods yet and I remain uncomfortable about their high interest lending partners Bantry Bay who, I recall, are partners in crime with Eliott Advisers. However, if the results are even slightly better than expected, we could be seeing the start of a re-rating. I am presently cautiously optimistic.

Ammu, thank you so much for your concern. I didn't know you cared!!!

Price will obviously drop if they walk away, which I hope they do. However I like rmv. I will buy at a lower level. This share largely dominates its market and imo demands a premium. My view is buy on weakness and wait for another predator. The present offer isn't attractive doesn't represent good value.

I can't see a bid occurring. The company clearly paid too much for Terminix. It now needs to integrate and consolidate. I doubt it will cut the div either; would give the wrong message. Always regarded this as a well run company, but The USA while bringing volume, has other challenges. I've made money on this share recently but am presently out of it. I see it dropping some more given the hit they've to take. Am carefully monitoring

What a surprise NOT. Another overseas company gets its fingers burnt in the wonderfully protectionist USA. Who could have predicted that?! The country is a truly tough nut to crack, as has been evidenced by far better run companies than Boohoo. Everyone wants to break into that market but in an overcrowded sector, this recent development is not only unsurprising but it demonstrates, imo, a lack of business acumen. I still maintain that until the K's and JL are out, the SP will continue to fall. The company in its present state cannot afford to lose money like this. It needs quality leadership.

Jamess: I agree. Up until now, for whatever reason (I have my own views on that) Asos has not maximised the full potential of TS/TM. The company seems to have acknowledged this by undertaking a sale of most of the holding, albeit at at some loss, and including a lot of it's full future potential. Povlsen is an interesting character; elusive and with a deep pocket, and more importantly appears very patient. He plays very long and may prove to be a match for MA. Meanwhile MA can't be too displeased; it was, and still is a win/win for him. I do still have concerns for the medium term as they've seemingly pushed the long term debt higher at not an attractive borrowing rate. It looks to me that they are obviously relying on profits returning through ongoing cost savings and higher margins. Regrettably, given this recent development, I cannot see a takeover occurring due to the ongoing debt situation.....unless of course Povlsen bails them out again sometime in the future. I anticipate some further profit taking in the next few days which may subdue the SP. I am praying there are no other issues in the y/e accounts, as that could take us back to square one. I am still assessing the full details of today. I'm hesitant to be over-optimistic as some of the terms do actually look onerous, but again, if the company is leaner and fitter, and profits start coming through, then they should be able to service the debt.

Roberto has clearly copied an expression I made at about 9.30am this morning ('devil in the detail'), after I had quickly perused the announcements. I merely commented on a couple of things which might be of concern and would need looking at more carefully. However, I reserve judgement on the overall package until I have read it thoroughly a few more times. There are no doubt positives and negatives, but one thing is for sure, the immediate reaction of the market is one of relief for the time being. Roberto, I think we have got the message as to what you think, but it is time to quieten it down please.

I've quickly read through the terms of the agreement with Povlsen, and the partial restructuring of the £500m bond. There are a few things I need to read through again, particularly the risk factors. On the face of it, this shows Povlsen's continued commitment and long term positive thinking re his dealings with Asos and increases his stake in the enterprises. The deal, if it goes through, secures Asos' future in the short term through strengthening the balance sheet. However, I may be misreading the situation, but it appears that they are starting a new bond of £250m only some of which will repay part of the £500m bond, ( up to £200m worth??... which presumably will leave £300m to be renegotiated by 2026). Additionally, it looks like (someone correct me if I've initially misunderstood) the interest rate on the new bond coupon will be 10%-11%pa, rather than the present 0.75% ! And it's again being done through Bantry Bay Capital who have a knack of charging rip-off rates, but this is clearly due to the 'high risk' involved. I will be re-reading these proposals more carefully over the next day or two to get a better feel for the deal. The market has initially looked favourably on it, together with the trading update, but the devil, in between the waffle, may be in the detail.

A win/win for Frasers, keeping the pressure up against K. They'll probably keep slowly turning the screw to about 29%

If it wasn't for Frasers RNS today, this stock would have stayed below 28p. I still see it drifting downwards until someone decides enough is enough and tries to oust the present board of directors..

Zebbo : It's true that a lot of older BTL landlords (particularly unincorporated ones) have left the market in the last couple of years; tired of increasing red tape and reduced allowsances etc. That has been offset to a certain degree by larger scale corporate entities continuing to buy, who benefit from scale and who adopt a more business-like approach. I read this weekend that there is also still a healthy supply of new business coming from late 20 - 30-somethings, starting out as limited companies. That optimism was slightly muted due the rumour that the government may be thinking of introducing NI contributions for landlords. That would obviously be a very unpopular and imo an unwise move, but nothing would surpise me given the ineptitude of this chancellor. I think it's too soon for another profit warning and things will be fairly subdued until we see what the budget brings.

Badjob: Your thoughts were exactly my thinking when I listened to Starmergeddon; ''It's all going to get worse.'' And then, when the budget happens, it doesn't turn out to be as bad as people thought, and everyone will be grateful to the government apart from me, you and millions of others who have seen this trick before.

I'm confident the CEO of this company knows his stuff and that he and others will direct the business according to the economic climate. Notwithstanding the challenging times and uncertainty prior to the budget, there's not a lot to dislike with this company's figures. I still see an opportunity at a lower price in the short term.

The 'shorts' figures on Asos and others on LSE & Shortracker seem to have gone bonkers temporarily, quoting changes in Sep-Dec 2024!!! Something has obviously gone wrong with the system

Badjob: I think you're pretty spot on. A neighbour (unincorporated individual) has sold 2 out of his 3 investment properties in 3 years, spread over tax years to maximise remaining allowances etc. Very resentful that he had to pay 28% on most of the gain after a lot of work over 30 years to build a pension. In my view a graduated level of CGT should have applied, as it had been many years ago (the longer you kept a property, the less CGT one paid). Given the almost certain alignment of CGT with income tax rates, he says there is no way he is now going to sell the last property. So investors will simply hold until a better regime comes in. Another case of the Laffer curve kicking in. I fear this inept government will interfere in the property markets even more than Mr Gove was (unwisely)proposing. When will they ever learn? All this uncertainty is why this share is susceptible to wide fluctuations.

Tygra / LWHL: In many respects, I actually agree with both of you. Some very valid points that everyone needs to take into consideration.

The SP has been on a downward track for about three years. There comes a point where it will be re-rated. It's a quality company. The SP (excluding reinvested div) is down around 30% over that period. Very disappointing. Those invested should 'hold' imo. Those thinking about it, invest on weakness (my entry point is under £23). I'm still waiting for the overdue US correction, but hey what do I know?!! Thinking about it on a domestic level, in the short term, this inept government could well think it is an easy option to raise duties on alcohol and petrol/diesel excise duty, (and possibly windfall taxes in certain areas, stunting investment). It would be a brave person to invest too much until we see what the budget holds.

I forgot to mention, one of my bigger errors was to think back in March that this was an AIM stock (the market of which I'm generally more wary and regard as more risky). At that point the share was £3.81 and I said I had no intention of investing! The SP, despite a 'margins disappointed' warning in the spring, then raced away to over £5 !!!(and directors took advantage). It is now back again to the original level. Just goes to show what can happen in six months.

The SP is closer to my provisional entry point, but I may need to adjust down. As I may have mentioned, the share is very sensitive to any hint of policies being introduced to hinder the sector. Starmers' disingenuous speech yesterday hasn't helped, and we already know the government is intent on interfering in the property sector generally. Big mistake. Interfering could adversely affect this type of company. I've been looking at a roughly comparable company, Paragon. Interesting. Similar capitalisation but has fared significantly better in recent years, decent growth and attractive dividend. And recently plenty of director buys as opposed to OSB. I think PAG could also see a sudden slowdown (despite a recent stated positive outlook). The growth aspect of this share has been disappointing and I've been trying to work out why! Clearly their strategy has not been entirely spot on. However, at some point I see OSB recovering ground, but with this volatility, it's one of those shares that people like going in and out of for a quick buck. However, the timing is easier said than done. For those looking longer term, the dividend acts as a buffer, but 'cover' is on a downward trend which may indicate lower increases in future. However, on the face of it the share represents very good value and I imagine the likes of JPMorgan, Vanguard, Blackrock and Abrdn think likewise. And it also crosses my mind that at this valuation, I wouldn't mind betting someone is eyeing this up as a prospective takeover target. That would be a bonus.

Regarding a recent comment here, my view is, is that mud does stick, sometimes indefinitely or for many years, as can be demonstrated by murmurs regularly reappearing in the press re the likes of Boohoo, Shein etc. This is particularly prevalent in the garment industry. Press exposés, reminding people of misdemeanours (no matter how minor), can understandably impinge on a listed company's reputation and SP. For example, yesterday's FT article headed 'Boohoo case highlights supply chain issues' won't help; it just reminds people of past situations that come back to bite the company on the backside. The article debates the question: Are big brands responsible for their suppliers' misdemeanours? It then goes on to detail a new complaint against Boohoo from three (anonymous) individuals about the time they worked in Leicester between 2017-2020. This was for a company who supplied goods to Boohoo and who allegedly underpaid / mistreated them. It seems the three are seeking recourse to Boohoo (because their former suppliers/employers are insolvent or are being dissolved) but fear 'repercussions' from their former employers if their names are outed. The occurrenced happened a long time ago but the mud has stuck. It reinforces my opinion there needs to a be a clear out at the top for this company to move on; all the whilst they stay, the 'mud' will stick.

Very interesting sj74. When Asos entered into the deal with Reliance not too long ago, it obviously looks to open up wide opportunities for them and Asos in India - a massive market. It was hyped up a bit, as some sort of 'exclusive deal', but of course Reliance is so big, it has all sorts of exclusive deals with other retailers too. What I'm still unclear about are the terms of the deal. From what I remember it is only Asos label products. We are told that Reliance have full control of decision making as to where Asos products are to be sold, either through opening physical retail outlets or selling on selective online sites controlled by Reliance. I have no real problem with that (after all Reliance know their market) , but the financial details (setting up costs, financial arrangements) appear thin on the ground. I appreciate there are commercial sensitivities, but another thing I know is that Reliance are tough negotiators. Hopefully the terms are mutually beneficial, although Reliance may choose to be selective for their own interests. With regard to the potential plans of opening dedicated Asos stores (as mentioned when the deal was originally signed), who pays for it in India, or are Reliance doing it out of the kindness of their own heart. Okay, accuse me of being sceptical, but until I see the rupees rolling in, I will reserve judgement.

PP1 All interested parties on this forum have got your message re your views on Asos. There's no real need to remind them nearly every day. Many await the figures in a month or two's time and will, depending on the progress made (or lack of it), decide if it is worth hanging on. Asos is still an interesting play for those recently invested. It's a gamble, but with the safety feature that the weak SP is low enough for someone (a very big UK player or an overseas coy) to come in with a opportunistic offer. A takeover is unlikely, but with Barker and MA in the equation, it is probably propping up the SP a bit. I think there's a bigger chance of a merger of sorts with a company with similar synergies, but of course the debt will no doubt be a big stumbling block (and I'm fearful of another kind of capital raise / dilution if things have not improved). As I've said before, the sector is overcrowded and some will disappear.

Regarding the Warpaint company mentioned. Fair play, it's an interesting one and looks set for a period of continued growth. I haven't done research on it yet but nice that it's debt free, great cashflows and a progressive div. So what's the catch?! (apart from it being on AIM - an exchange I'm not a fan of). But the shares have really raced away, perhaps too quickly, (High P/E - very high expectations) and there have been a number of senior execs and directors who appear to have been cashing in big time recently as a result. It only gets tougher trying to satisfy the market with such high expectations.