Good morning! 

Many executives and financial types are lying on a beach somewhere as I type, leaving us to soldier on without quite as many game-changing RNS announcements as we normally do.

Still, we have a couple of things worth looking at:

  • Mulberry (LON:MUL) is down significantly after 'fessing up to its House of Fraser exposure (£3 million), so let's take a look at that stock.
  • Countrywide (LON:CWD) has been rebuffed by shareholders after trying to introduce a new remuneration policy along with its refinancing.
  • Keywords Studios (LON:KWS) has made another acquisition, so it's a good day to catch up on developments there.

Resource Stocks

There are requests in the comments for me to look at some resource stocks. Long-time readers will know that my policy is to avoid the sector. Sorry about that.

Mulberry (LON:MUL)

  • Share price: 462p (-19%)
  • No. of shares: 60 million
  • Market cap: £277 million

House of Fraser and UK Trading Update

Another retailer comes clean on its House of Fraser exposure.

Earlier this month, Paul contributed a comment on French Connection (LON:FCCN), suggesting that its bad debt exposure to HoF was up to around £2 million (£50k at each of c. 40 stores).

Mulberry now says that it anticipates £3 million of exceptional costs, or about £140k per concession. This is a mix of bad debt, loss of value in fixed assets and potential restructuring costs. Perhaps this is a bad sign for French Connection - whose shares are down by about 3% today.

Mulberry's £3 million hit is, however, much smaller than its total decline in market cap today.

We also have a nasty trading update: the UK market remains "challenging", and if these trends continue in H2 then profit for the full year will be "materially reduced". No numbers are given, so investors are left to guess at how bad the situation might be.

My view

I've been interested in this share for a while. The problem is that it has always had such a high rating, it's been beyond the levels where I could justify a purchase.

But the share price is now at the cheapest level…

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