Member Info for Skindle

Morning Ejackson. I have not been able to work out how the most recent pre tax profit forecast of £18.59m has been calculated. Last year Express and Education collectively produced a pre tax profit of £37.6m pre exceptional items. If you remove say £4m from that figure as we were warned on the 1st February and you deduct say another £1m for Educations diminishing profit, you are still left with over £30m of pre tax profit. These are very crude calculations as I say but where has £12m of pre tax profit gone ? Unless of course that forecast is a post exceptional items figure. Can anyone throw any light on this ?

Looking ahead three weeks we have the dreaded Sugden pre close trading statement. That is sure to affect the share price. As we know Mr Sugden can make a triple rollover lottery win sound like a bad thing so I am not expecting a positive end of term report, despite the fact that the company is probably in the best state of health since the placing in 2011.

I have copied and pasted a post below made by someone on the iii discussion board that was written nearly a year ago. While the bones of it are fairly accurate in its predictions, it set me thinking about Education and whether it might be the next piece of the company to be sold as the broker report suggests. I look forward to reading what Cantor Fitzgerald's view is this year. LONDON (Alliance News) - There is a strong likelihood that home shopping and education supplies company Findel will be left with only one business over the next year, Cantor Fitzgerald says, leaving it vulnerable to potential suitors and likely leading to a significant re-rating of the stock. Cantor analyst Freddie George says that after the disposal of its Kleeneze networking marketing business, the proposed sale of its Kitbag online sports equipment store is behind schedule, but it thinks there is active outside interest in the division and that a sale will be completed in the second quarter. That would leave the company under pressure from shareholders to dispose of its education business, which would then leave it with just its core Express Gifts personal shopping unit. A change in structure like this would highlight the significant undervaluation of the business, particularly within a low interest rate environment, George says. Findel has traded in a 200-250 pence range in the past year and looks cheap at 8.7 times 2015 earnings and 7.5 times 2016 earnings. George also sees it as undervalued on a sum-of-the-parts view, based on its forecasts that Express Gifts is worth more than 350 pence per share, assuming it is valued at a similar rating to peer N Brown. Express Gifts, however, has a stronger record over the past five years, meaning a sum-of-the-parts view would value Findel at up to 400 pence. Cantor retains a Buy rating and 335 pence price target on the stock.

Apologies Ejackson for my moment of madness earlier, I'll stick to relevent comment in future. On a slightly more interesting subject is the news today that Old Mutual is likely to be broken up. Old Mutual Global Investors currently own 2.44% of Findel so let's hope that they retain their interest in the company.

On a silly random note I was trying to think of the opposite term for Brexit. I came up with Brin or Brem(ain). I then applied this to Findel. To sell the share would be to Findex or Finsel or to invest would be Findin. I don't need to tell you that this price movement freeze is slowly turning me into a lunatic !

Thank you Ejackson, I aim to serve. Your optimism is keeping me invested. We have been stuck in this trading range now for over three months, extremely frustrating, particularly when we are seeing companies such as N Brown increasing with the recovering FTSE.

We appear to be trapped in a virtual state of suspension. I can see the headline now - Findel announces £5 a share approach from Japanese consortium, share price remains stable at £1.88 and £1.92 !!! One begins to question where the reason for investment is, and what/if will prompt the rise in value that we all crave.

What do Messrs Kowalski and Maudesley have to achieve in order to be able to excrcise these options ? Given the very disappointing share price performance since the summer of 2014, does anyone deserve any recognition at all ? In conclusion, I am with you Ejackson, bring back Mr Siddle, all is forgiven !

What do you read into that Ejackson ? My first impression is that this is not the actions of a board who, as we allege are busying themselves in seeking a new owner. It is a coincidence that we should be discussing our board holdings at the same time as this RNS is released. This latest incentive would further reduce the break even point for Messrs Maudesley and Kowalski. Given Mr Maudesleys length of service to the company, I think his reward were he able to exercise it would be fully deserved.

That would be a very interesting scenario Ejackson, I wonder whether Mr Siddle has sold any of his holding since he departed? A quick calculation of our board holdings has Mr Sugdens break even point at £1.16 and Mr Maudesley at £1.43. Mr Kowalski has proved more difficult to calculate because the record shows that he sold some in 2014 and then bought some back as well as exercising options. His total nett cost therefore to acquire his 183,645 shares is unclear. What is clear however is that despite today's low share price, all our board members are well in profit with their holdings.

A very positive straight talking article, thank you Ejackson for posting the link. I wonder whether the 'opaque bidding process' was a badly managed situation or a shrewd sale tactic. The article left me feeling slightly frustrated that we owned the brand but couldn't source the relevent expertise or capital to drive it forward and make it a success as Fanatics clearly intend to do.

This group are definitely on the list of suitors but given the recent animosity between FDL and SPD I can't see our board going out of its way to encourage or facilitate an offer. On the other hand you may be right in suggesting that discussions have been ongoing in the background and that SPD has been told in no uncertain terms of the figure it will have to pay to secure a deal. If I were in charge at Findel I would not be keen to drive a sale to SPD for fear of the effect it would have on the employees at Express and to a lesser extent at Education. We appear to be governed by a decent group of human beings who are genuinely interested in the welfare of its staff as well as the value of the company. There is clearly no expectation of an imminent sale (other than you and I) if you look at the share price movement in isolation. My belief is that the price has been held against its will (if that is possible) since SPD sold one million shares at the beginning of December. The day after that sale the price fell inexplicably by fifteen per cent on trade volume of 53,000. Ever since then the price has stubbornly remained below two hundred pence despite a significant purchase at the beginning of January by FIL and of course the sale of Kitbag. I don't understand why sheer expectation alone of a sale of the business has not driven the price up. Are we both barking up the wrong tree ?

Well Ejackson, a thought provoking last paragraph to your post. Are you suggesting that the major shareholders could move to replace Mr Sugden in the short term for his under performance ? There is no doubt that a twenty three per cent diminution in value in a year regardless of the wider market performance is totally unacceptable to all shareholders. On another note I have found some forecasts for the next two years as follows - Forecasts Year Ending Profit (£m) EPS P/E PEG EPS Grth. Div Yield 31-Mar-16 18.59 21.51p 8.7 n/a -11% n/a 0.0% 31-Mar-17 20.52 23.74p 7.9 0.8 +10% 1.25p 0.7% 31-Mar-18 25.19 29.14p 6.4 0.3 +23% 1.75p 0.9% What is the value of this business based on revenue of £409m and pre tax profit of £18.59m for the current financial year ? Uner the stewardship of Mr Siddle we achieved his margin target of 7-9%. This financial year is shaping up to a figure of 4.54%. If I were Mr Sugden I would not be planning on raising a mortgage based upon my income in the foreseeable future.

I think this latest appointment will only further fuel my paranoid (and hopefully not misguided) speculation that the company is positioning itself for a sale. I find this daily diminution in value extremely depressing prompted by very low share volume. Is there nothing that will arrest this gradual slide ? I agree with your thoughts on Mr Siddle Ejackson. Value as a whole does seem to have deteriorated since Mr Siddle left. After all, how else are we to judge our leaders other than look at how our own investments have increased or declined. Now is a good moment to reflect on our first year under Mr Sugdens control. On the 1st March last year, when he took over, the share price was £2.40 and there was real optimism following the sale of Kleeneze. Since then however matters have deteriorated starting with the pre close trading statement at the end of March 2015. Since then optimism and confidence have been in very short supply, featuring only briefly at the announcement of the sale of Kitbag. So Mr Sugden, will you disappear into retirement leaving the share price some 23% lower than when you took full charge or will you finally pull off the sale of the century and return shareholders the profit we have all been waiting so long for.

Hello Ejackson, welcome to the board, interesting to read a new opinion. Something slightly out of the ordinary is happening as I write this post. The last trade was yesterday at 13.14, there was no end of day UT trade and today so far my CFD account is only providing me with an indicative price and no allowance to trade. Might be something and nothing but it is unusual. As regards our Mr Sugden, my guess is he will continue in his position until the next AGM in July at which point I think he will step down. Prior to Mr Siddles departure total board compensation amounted to approximately £1.6m as opposed to today's reduced outlay of £868,000. It is curious that Mr Sugden has not asked for any increase in the compensation he receives. My research has found that he has been paid £166,000 annually for his work as a non executive chairman. Mr Siddle commanded annual compensation of at least £600,000. My research also made me realise that American companies regularly feature as potential buyers. Most recently both Kleeneze and Kitbag have been sold to US companies. Going further back in time I have discovered that Messrs Sugden and Siddle ran a PLC called BPP. Between them they successfully sold this business to a large American fund. It does feel like something is going on in the background. Unfortunately, as small shareholders we are always the last to know. I always felt that the sale of Kitbag would be a trigger point so let's hope that it is good news.

What a change in just one year. Both Kleeneze and Kitbag have been sold, the chief executive has gone, one of the non executive directors has left and now the chairman is preparing to step aside. So, two brands left, both profitable and no long term board of directors to speak of, this must surely now be a takeover target for a myriad of different companies. Three possibilities spring to mind, Sports Direct of course but also Sainsburys maybe as they have been courting Home Retail Group recently and Findel Education run the Active Kids scheme for them and N Brown. But there are plenty of other potential suitors in the form of large funds here in the UK and abroad. In disposing of Kitbag Mr Sugden may well have pulled off a career move above all others in protecting the jobs of those working in Kitbag and potentially enhancing shareholder value. I would be surprised and a little disappointed if we do not receive some form of approach before the financial year end.

Collectively posted pre tax profit before exceptional items of £37,651,000 in the 2014/15 financial year. I can't find any information about the forecast for 2015/16, I recently incorrectly stated a forecast of £26,500,000 for this year. Does anyone know what the forecast pre tax profits for this year and next year are ?

This is excellent news indeed and simplifies matters significantly. Kitbag has been a massive anchor around the neck of the company for years so the disposal news today is a great relief to me. The conclusion to the Kitbag saga has clearly heralded in the "retirement" of Mr Sugden. I use that term loosely because these old "businessmen" never seem to retire officially. I am sure that within a few months of stepping away from Findel, you will see this chap re appearing in some shape or form with another troubled business. Good luck to the old fella, you've done a good recovery job here. Hold on to your shares, you never know, your new recruit may triple your investment. We are now left with two profitable brands, reduced debt and a huge opportunity for someone to come in and really drive this business forward. Do we know anyone who might be interested ????

I have read the trading update now a couple of times and what I find most interesting is what it doesn't say as much as what it does say. This leads me to the above conclusion 1GW_, you are right, the business is up for sale. Looking at the bigger picture I think this whole sale plan started a year ago with the departure of Roger Siddle as CEO. Roger was reported to have "retired" but currently he is non executive chairman of the Cordium Group. Not exactly retired then. My view is that Tosca and Schroders decided to sell and that Roger was under performing. David Dugden was placed in charge as chairman and CEO. for such a demanding role it is curious that Mr Sugdens remuneration has not changed. I believe that the board, such as they are have been put in charge merely as caretakers while that all important buyer is sourced. The next part of the sale plan was to retain Kitbag to see if that widened the market for a buyer. The next move at the end of September was for Tosca and Schroders to each sell Sports Direct nine per cent of their holding, returning a lump of their investment while potentially snaring Sports Direct as a buyer. Finding an alternative buyer for kitbag gives Sports Direct the option to buy Findel with or without Kitbag. What the trading update didn't say was current level of core debt which they were very keen to point out to us this time last year and there was no mention of finding a replacement CEO. Both of these points coupled with the complete lack of inspiration told me that the board are just going through the motions now until a firm bid is received. You only need to compare the N Brown trading update with the Findel one to understand the difference between a committed and inspired board with a firm future plan and one that has neither. Our board are caretaking for a new owner who will install its own CEO and take the business forward. Indeed you wouldn't believe N Brown and Findel operated in the same country let alone the same online retail sector so contrasting were their reports. I therefore reiterate my buy opinion in anticipation of a bid for the business which I think will finally realise it's true market value.

From memory profit forecast for 2016 was £26.5m I think. The update this morning would reduce that figure to £23.5-£24.5m. Currently the market cap is around £156m. Provided we achieve that reduced figure and there are not any more exceptional items to reduce it further this is still extremely cheap. There is no doubt in my mind that our board of directors in its current form needs some serious help. They cannot continue to trot out negative updates. We need fresh blood. These people have run out of ideas. I would hope for the sake of all investors that this is being dealt with as a matter of priority. If I were in charge of acquisitions at Sports Direct, I would be filling my boots with Findel shares. The more they can pick up under £2 makes the acquisition even cheaper.