The end is nigh!

You know this right? Particularly if you sell soft furnishings to beleaguered lower income Brits. No think otherwise makes you fo shiz a few tablespoons short of a teaspoon. Well baton down and button up...

SCS (LON:SCS) is a great stock and company. Yes, I mean Tony the Tiger grrrrrreat! Its not in the most glam sector and it ain't going to blow the bleeding doors off like a hot cakes online retailer (though many of those will burn up or fade away burning your capital for the journey). But is priced like it can't deliver anything whereas the reality is it will deliver more than enough. Whereas how many moonbeams are there for the online girls and boys to collect? And even moonbeams have a terminal growth rate....which cold dished reality could feel like a bit let down.

So, come on down and get your bargain SCS (LON:SCS) now. Okay, there is a the trading update for Christmas and key new year sales period to come at the end of the month. I don't have any good foresight on this however my guessestimate is further deterioration in the HoF based franchised outlets as HoF had a tough time whilst holding the LFL previously reported in SCS stores steady-ish at 3.6% as reported in AGM statement in Nov (that figure included 6.4% LFL decline in HoF stores which represents 6.2% of total order intake).

Worst case scenario is that there is a private equity take out or management lead LBO (that won't happen whilst current long standing CEO is there but could happen with the replacement).

Stockopedia does a good job on the financials as a summary as this is real straightforward crisp and clean stock from an accounting perspective. Net cash for FY 2017 is about £10m over stated as a result of timing differences in working capital so EV/EBITDA is more like 3.4x rather than 2.9x.

I've held the stock for about 18-24 mths now, read the historic reports and had a call with the CFO last Friday to improve my understanding of some things. It reassured me that this is a well run business by guys that know their customer and how to run the business.

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