Small Cap Value Report (Thu 20 Apr 2017) - BON, TRI

Thursday, Apr 20 2017 by

Good afternoon!

Apologies for running late today. I'll be updating this page between 1pm and around 3:30pm today.

I've been nominated for small cap journalist of the year again. However, thinking about it, I've found the previous years' judging to be so haphazard, bizarre even, that for me the whole thing lacks credibility. Therefore it doesn't interest me at all.

Readers here constantly tell me that they value my work, and it's helped them make money (and avoid losses), which is all that matters to me.

Let's start with an update from yesterday;

Bonmarche Holdings (LON:BON)

Share price: 81.5p
No. shares: 50.0m
Market cap: £40.8m

Trading update - 53 weeks ended 1 Apr 2017. Note the elongated period, which will flatter results versus the previous year.

The following table is presented for Q4, and the full year's sales;


This shows a clearly improving trend in Q4, with LFL+online sales up 0.7% in Q4, against a total for the whole year of minus 3.8%.

However, there's a problem with this table - it's not actually Like-For-Like (LFL) sales at all! As they admit below the table, this is comparing 53 weeks this year, with 52 weeks last year. Clearly that is not a LFL comparison. So why on earth was this published, when it's clearly misleading?

As noted previously, FY17 includes a 53rd week to align our reporting year-end more closely with our accounting reference date of 31 March. To aid comparisons with FY16's 52 week reporting period, we also include below the corresponding FY17 figures for the 13 and 52 week periods ended Saturday 25 March 2017:

So here are the proper figures, which are on a LFL basis (i.e. comparing periods which are the same duration);


As you can see, there's a significant deterioration when the correct prior year comparison periods are used. Instead of +0.7%, the Q4 sales are now -1.1%.

Note how there was strong growth in online sales in Q4, at +14.8%, which is encouraging. Although this doesn't move the dial much overall, because online sales are still a fairly small part of the total. An older, value-orientated customer base, is not likely to be as receptive to shopping online (especially on smartphones) as younger demographics. So I'm not sure how much opportunity BON…

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Bonmarche Holdings plc is a multi-channel retailer of womenswear and accessories. The Company offers clothing and accessories in a range of sizes for women through its own store portfolio, Website, mail order catalogues and through the Ideal World TV shopping channel. The Company's subsidiaries include Bluebird UK Topco, Bluebird UK Holdco and Bonmarch Limited. The Company has approximately 310 stores across the United Kingdom. more »

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Trifast plc is a manufacturer and distributor of industrial fastenings and category C components to a range of industries and customers. The Company designs, manufactures and distributes mechanical fasteners on a global basis to both distributors and to original equipment manufacturer (OEM) assemblers. Its geographical segments include the United Kingdom, Europe, the United States and Asia. It owns a range of fastener solutions for specific industries and applications, including fasteners for sheet metal, fasteners for plastic, security fasteners, thread-locking nuts and micro-diameter fasteners. Its brands include Pozidriv, Polymate, Binx and Hank. Its products are used in various markets, such as automotive, electronics/telecoms and domestic appliances. It operates in Norway, Sweden, Hungary, Ireland, Holland, Italy, Germany, Poland, Malaysia, China, Singapore, Taiwan, Thailand and India. Its subsidiaries include Trifast Overseas Holdings Ltd and TR Formac Fastenings Private Ltd. more »

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  Is Bonmarche Holdings fundamentally strong or weak? Find out More »

33 Comments on this Article show/hide all

runthejoules 20th Apr 14 of 33

Crap compliment: I've only been a subscriber since New Year's and if I'd actually listened to Paul's tips and got in on them when he gave them I'd be a lot better off now. These days, I pay attention. Though I should have sold out of G4M when he warned us he was a bit in love with it! ;0)

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Deeping 20th Apr 15 of 33

In reply to runthejoules, post #14

Be very clear on this point, Paul doesn't tip.

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runthejoules 20th Apr 16 of 33

In reply to Deeping, post #15

Of course, I stand corrected!

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ganthorpe 20th Apr 17 of 33

I advise a small local ladies fashion retailer catering for a similar age group as BON , and I keep an eye on BON..
The 53rd week would be a big selling week which might have made even more difference to the figures. With staffing costs etc it would be hard for BON to get their net margin up to 5% I think , and even 4% would be tough in the short term?.
It is a tough sector with aging clientele and new entants coming on board older and limited opportunity to widen customer base via the website. Positives are a loyal customer base with reducing competition as many small "madam shops" are closing as their owners retire and are not replaced.
I would back NEXT every time.

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samanddee 20th Apr 18 of 33

Thanks Paul - good insights as ever. One query though your portfolio on here beammeupscotty is that a reflection of your own holdings as I see some of your long positions e.g. boohoo but then some others you report as having a long position I've not seen in the beammeup folio.
I'm a previous Avesco holder so thanks for highlighting that share again I'm hoping Revolution Bars and Somero also ends up a happy story - like the look of these ones.

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Smudge 20th Apr 19 of 33

Best financial analysis around. Compulsory everyday reading. And you have my heartfelt thanks and appreciation.

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JohnEustace 20th Apr 20 of 33

In reply to Michael Mortphew, post #9

I was one of those who took Simon Thompson to task over the Chinese AIM fiascos and then Globo - happily I smelt a rat there before I discovered this column. The response I got was that he felt he was entitled to rely on what managements told him.
So what you are getting there is largely a rehash of the company management line which is why it is overly positive and uncritical.

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press232 20th Apr 21 of 33

Hi Paul i am new to the Stockopedia, believe it or not your report makes my decision of buying and selling shares, and it is a must read column,we need your reports many years to come

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jonesj 20th Apr 22 of 33

Hi Paul,
Your articles are way more informative than those in certain printed magazines.
Please keep up the good work.

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peterthegreat 21st Apr 23 of 33

In reply to JohnEustace, post #20

Yes I would tend to agree, I would guess that Simon Thompson may not have the time to dig deep enough so his analyses are usually based on public information plus some spin from the companies plus, in some cases, a sum of parts analysis. Having said that he does identify some interesting special situations so I do read his section more carefully than the rest of the IC. I'm afraid I skim through most of the IC and just check out the results at the back as my personal opinion is that there seems little in the way of original thought within the magazine and some of the opinions expressed by regular contributors certainly conflict with my ideas on how to invest for the long term (which I base on fund managers such as Terry Smith, Nick Train & Keith Ashworth-Lloyd.).

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kbkb 21st Apr 24 of 33

I also had a spat with Simon Thompson as he was more than happy to take the credit when things went well....but when he rather foolishly not only tipped Chinese AIM stocks...but then blamed everyone and everything for the failure.....too much.
My IC subscription recently came up for renewal and I wanted to just subscribe to the digital service and no longer have the magazine was just £4 cheaper a now I do not subscribe to IC at all

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herbie47 21st Apr 25 of 33

In reply to kbkb, post #24

Oh yes, all that trumpet blowing really got on my nerves but what about all the duffers, quietly forgotten about. No performance figures either for ST apart from his "bargains of the year" ones. IC overall have poor performance figures hardly above the FTSE All Share index.

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kbkb 21st Apr 26 of 33

In reply to herbie47, post #25

Quite....and I have not missed it!

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Paul Scott 22nd Apr 27 of 33

In reply to samanddee, post #18

Hi sam,

I've got about 50 personal holdings, and use gearing personally.

BMUS is a distilled version of that, and doesn't use gearing.

I don't want people to focus too much on it. If they do, I'll stop doing it. The only reason BMUS exists, is because the boss (Ed) challenged me to prove that I could beat the market, in early 2015. I didn't want to do it. Obviously now its doing pretty well, then I'm taking a more relaxed view about things lol

Cheese, Paul.

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Paul Scott 22nd Apr 28 of 33

In reply to Deeping, post #15

Be very clear on this point, Paul doesn't tip.

Thanks. I have to cover 500+ shares, and can't possibly give that justice in these reports.

So it's just a quick review of each day's RNSs on trading updates & results.

Hopefully it throws up some interesting ideas for readers to follow up.

Remember that our source material is the RNS - so I just try to give an interesting review of the trading updates & results each day. Graham kindly covers Fridays & other times that I'm struggling to get out of bed LOL!

In a way we're undoing all the BS that the PR and brokers put out. So we're trying to save PIs money, and stop you being hoodwinked.

And it costs you nothing to read these reports!

Regards, Paul.

P.S. And it doesn't matter to me if anyone reads them or not. Remember we don't paid a penny by companies or PR people to say anything here, What you read here is truth, honesty. If anyone offered to pay me money, to give a nice view, I would walk out in total disgust. Two spivs have tried that with me - both in the junior resource sector - I turned on my heel and walked out without a word. 

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underscored 22nd Apr 29 of 33

In reply to Paul Scott, post #28

I have to thank you for the strong warnings on Globo and certain Chinese listed AIM shares, that definitely stopped learning a hard lesson early!

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jonthetourist 22nd Apr 30 of 33

Paul, I have been reading your musings for over a decade now, at a total cost of one pint of lager in Derby. Great value, and I have never doubted your honesty once. Sobriety many times, especially on Twitter, but that is absolutely not a problem. :)

May most of your investments prosper (all is too much to hope for), and I hope you are enjoying the current bull run in Proactis.


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Bushranger 23rd Apr 31 of 33

In reply to Paul Scott, post #27

Paul, since you mentioned it, or anyone who can help, what is a good company regards the use of gearing? Would that need to be done through a spread bet firm such as IG?

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samanddee 23rd Apr 32 of 33

Paul -

Thanks for the clarification and sharing what you do it is much appreciated.

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00mrmark00 24th Apr 33 of 33

Paul, thank you for your valued assessment of the BON results. Much appreciated. Thanks, Mark

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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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