Small Cap Value Report (Thu 11 Jan 2018) - TSCO, MKS, John Lewis, BOO, GMD, CARD, AO., GMD, LRM

Thursday, Jan 11 2018 by

Good morning, it's Paul here.

I got up early today, to finish off yesterday's article (was too tired last night to do any more work). So I've added new sections on ShoeZone results, and Focusrite's trading update. So to get you started today, here is the link for yesterday's expanded report.

It's an absolute avalanche of trading updates today, here are some quick bullet points on mid to large cap retailers, which might be of interest, for read-across to smaller companies, and the economy generally (we need to keep our eye on the macro picture);

Tesco (LON:TSCO)

  • Seems to be trading well.
  • Positive Q3 LFL sales of +2.3% on a LFL basis.
  • Positive Xmas trading, +3.4% LFL in food
  • Problems at Palmer & Harvey, and "ongoing drag" from general merchandise - "took the shine off an otherwise outstanding performance"
  • We are confident in the outlook for the full year and are firmly on track to deliver our medium-term ambitions."

Marks and Spencer (LON:MKS)

Q3 update, for 13 weeks to 30 Dec 2017

  • Full year guidance remains unchanged
  • Total UK LFL sales down -1.4%
  • Food better (-0.4% LFL) than clothing & home (-2.8% LFL)
  • eCommerce growth only +3.0%
  •  "M&S had a mixed quarter with better Christmas trading in both businesses going some way to offset a weak clothing market in October and ongoing underperformance in our Food like-for-like sales...

John Lewis

Update for 6 weeks ending 30 Dec 2017

  • Waitrose LFL sales up 2.2% (adjusted for New Year's Eve mismatch)
  • John Lewis LFL sales up 3.1%
  • Black Friday went well, so looks like a permanent fixture in the retail calendar now.
  • "The pressure on margin seen in the first half of the year has intensified because of our choice to maintain competitive prices, despite higher costs mainly due to the weaker exchange rate. This will negatively affect full-year financial results as indicated previously."
  • "Looking ahead to 2018/19 we expect trading to be volatile due to the economic environment and anticipate that competitive intensity will continue, driven by the structural changes taking place in the retail industry. "

So, sounds like many retailers will continue to struggle in 2018. Good news for consumers though.

Boohoo.Com (LON:BOO)

(at the time of writing, I hold a long position in this…

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Tesco PLC (Tesco) is a retail company. The Company is engaged in the business of Retailing and associated activities (Retail) and Retail banking and insurance services. The Company's segments include UK & ROI, which includes the United Kingdom and Republic of Ireland; International, which includes Czech Republic, Hungary, Poland, Slovakia, Malaysia and Thailand, and Tesco Bank, which includes retail banking and insurance services through Tesco Bank in the United Kingdom. The Company's businesses include Tesco UK, Tesco in India, Tesco Malaysia, Tesco Lotus, Tesco Czech Republic, Tesco Hungary, Tesco Ireland, Tesco Poland, Tesco Slovakia, Tesco in China, Tesco Bank and dunnhumby. The Company's brands include Finest, Everyday Value, Chokablok and Technika. Finest and Everyday Value are the two food brands in the United Kingdom. The Company offers a range of personal banking products, principally mortgages, credit cards, personal loans and savings. more »

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Marks and Spencer Group plc (M&S) is a retailer in the United Kingdom, with over 1,380 stores around the world. The Company is the holding company of the Marks & Spencer Group of companies. The Company operates through two segments: UK and International. The UK segment consists of the United Kingdom retail business and the United Kingdom franchise operations. The International segment consists of Marks & Spencer owned businesses in the Republic of Ireland, Europe and Asia, together with international franchise operations. The Company is engaged in delivering own brand food, clothing and home products in its stores and online both in the United Kingdom and internationally. The Company sells womenswear, lingerie, menswear, kidswear, beauty and home products, serving customers through approximately 300 full-line stores and Website, M& It has approximately 910 United Kingdom stores, including over 220 owned and approximately 350 franchise Simply Food stores. more »

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Boohoo Group PLC, formerly plc, is an online fashion retail group. The Company is based in the United Kingdom and has a strong presence in the United Kingdom, the United States, Europe and Australia, selling products to almost every country in the world. The Company owns the boohoo, boohooMAN, PrettyLittleThing and Nasty Gal brands. These brands design, source, market and sell clothing, shoes, accessories and beauty products targeted at 16-30 year old consumers in the United Kingdom and internationally. more »

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  Is LON:TSCO fundamentally strong or weak? Find out More »

64 Comments on this Article show/hide all

DGW 11th Jan '18 1 of 64

Can we look at Footasylum results [please Paul

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garbetklb 11th Jan '18 2 of 64

Hi Paul
No longer remotely small cap, but I hope (and imagine) you'll want to comment on boohoo's trading update.

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lemonjar 11th Jan '18 3 of 64

GAME Digital (LON:GMD) 's trading update is out and it reads pretty positively I think!

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nicobos 11th Jan '18 4 of 64

Hi Paul, would be great to hear your views on Boohoo.Com (LON:BOO) and GAME Digital (LON:GMD) results ! Thanks !

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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »


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