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Ted only have 77 stores compare that to SDRY who have 250+. TED have a lot of concessions with turnover based rent and their model is not so highly operationally leveraged. Their average lease length is also 7 years.
This should be 200p. The shorters took it down too far.
Doubt we will hear from that clown again.
Easy 200p
The landlords I bet can't believe their luck when Hill and his missus showed up. The usual retail lease is only 5 years, and these clowns signed up for 25 years and the cherry on the cake is they developed the landlord's property to the tune of £5m. On the earnings call one of the analysts were deriding them for capitalising costs at £2,700 psf and were asking questions about writing them down. Though Dan did refute them well in relation to the branches being opened in locations post the demographic changes of recent years.
Jinny122. The first floor lease costs are a fraction of what the ground floors cost (about 20%).
I don't agree they should write it all off. Since those stores bring in deposit fee income which is £15m pa which over a 25 year period is worth £375m. Secondly they act a marketing for the business and save them £20-25m pa in marketing costs.
Then you need to consider the value of their customer book which is worth 2.1m*£100= £210m
Jinny122 their actual total lease commitments are £700m over the next 20 years. But those leases have a future value so writing off 50% is prudent. Since if they tried to sub-lease those premises they could easily be able to do so at 50% discount.
Jinny122 I agree with all your points apart from item 3 which I would replace with £250m for the future "fix the bank" costs. This is mainly because they already have a general ECL provision of £97m for Covid-19.