Good morning. Paul & Graham are here today.

Agenda - 

Paul's Section:

Hotel Chocolat (LON:HOTC) 134p (unch.) (£184m) - confirms today that its Japanese JV has entered court protection to restructure. Hence a c.£30m hit to HOTC - as indicated 9 days ago in a bombshell announcement, so today is really just confirmation. I question how management allocated capital so badly - spending about £1m per shop in Japan, for just 20% ownership of the JV? Despite crashing by about 80% this year, HOTC shares still don't look cheap yet, given it's now really just a UK business, and faces plunging profits in 2023 from cost headwinds. 

Headlam (LON:HEAD) 307p (down 1%) (£257m) - a surprisingly good trading update, with self-help measures absorbing costs & reduced volumes, to still report increased profit in H1, and in line with expectations for FY 12/2022. Very good balance sheet, although cash is down a lot, partly due to generous shareholder distributions. A very nice value share, thumbs up from me.

Ince (LON:INCE) 5.6p (down 53%) (£5m) [No section below] - this one continues to be a disaster, we’ve been warning against it here for years, due to a diabolical balance sheet, with all sorts of nasties in it - e.g. large deferred consideration, excessive debtors, bank debt, and deeply negative NTAV.

INCE did a deeply discounted fundraise once before, and it’s now announced another one! 5p placing, a 58% discount. I wouldn’t pay anything for INCE equity personally. Although occasionally things like this can be speculative multibaggers, but a more likely outcome seems to me that it gets taken private for tuppence, or goes bust. It’s amazing to think these are lawyers & financial experts, yet are utterly incompetent at managing their own finances (although to be fair, the same accusation could be levelled at me! LOL!). INCE equity is therefore uninvestable at any price, in my view. For gamblers only - you never know, occasionally these things do pay out, although not often in bear markets. At least the risk of insolvency might have reduced somewhat, given this latest emergency fundraising.

Epwin (LON:EPWN) 76p (down 1%) (£110m)  [No section below] - A solid H1 trading update. Trading has “moderated slightly” in June & July, but it “remains confident of achieving expectations in 2022”. H1 revenues up 13%, mainly due to price…

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