Small Cap Value Report (Thur 11 April 2019) - QUIZ, DEB, TED, CTG, TOOP, INS

Friday, Jun 28 2019 by

Good morning! 

This list is taking shape:


  • Share price: 18.55p (+7%)
  • No. of shares: 124 million
  • Market cap: £23 million

Pre-Close Trading Update

Leo has already written up a nice summary of the situation at QUIZ (LON:QUIZ) - see the comments. We can also refer to Paul's comprehensive analysis in January.

As a reminder: this share price has fallen by 90% since a series of profit warnings (starting last October).

It is now in turnaround mode, "undertaking a thorough review of all aspects of the business". It would have been helpful if that had been done prior to the July 2017 IPO!

EBITDA for FY March 2019 will sneak in at £4.5 million, as anticipated in the most recent trading update.

Note that this is significantly lower than the £8.2 million EBITDA result the company anticipated as recently as January, as sales in its standalone stores through January and February turned out to be very poor. This followed weak trading in late 2018.

Working my way back from the FY result, I see that Quiz has suffered a loss at the EBITDA level in H2 (before taking into account depreciation and other important costs).

I'd also note that the guidance given last month was based on the sales shortfall continuing through March, i.e. meeting EBITDA guidance today simply confirms the continuation of the January/February trend. There was no deterioration, and there was also no improvement.

This is very short-term analysis but maybe it's a reasonable approach for a fashion group where trends can change very rapidly, based on short-term missteps.

Because of these considerations, I think we should forget about P/E ratios based on annual eanings at this stage. It's more important to understand that the company has a very bad Autumn/Winter, and poor trading continued through March. Recovery in FY 2020 now requires a 180-degree turnaround, i.e. the new range of clothing for Spring/Summer needs to be a hit. You can view the…

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All my own views. I am not regulated by the FSA. No advice.

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QUIZ plc is United Kingdom-based global women's wear brand company. The Company is focused on providing occasion wear and dressy casual wear primarily for 16 to 35 year olds and offers clothing, footwear and accessories. The Company’s occasion wear provides maxi and mini dresses, matching tops and bottoms, and footwear, bags and other accessories that are designed to complement a particular outfit. The Company’s dressy casual is designed to provide the latest on-trend clothes, shoes, bags and accessories that have a glamorous edge. In addition, the Company’s products includes denim, playsuits, shirts, tops and skirts. The Company also provides a range of outerwear such as faux fur jackets, parkas and biker jackets. Footwear offers dune River Island, missguided and ASOS. The Company’s brand operates in 19 countries through 65 international franchise stores, concessions and wholesale partners. more »

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Debenhams plc is a United Kingdom-based company, which is engaged in multi-channel business. The Company’s brand trades through approximately 240 stores in 27 countries. The Company's segments are UK and International. The UK segment consists of stores in the United Kingdom and online sales to the United Kingdom addresses. The International segment consists of international franchise stores, the Company-owned stores in Denmark and the Republic of Ireland, and online sales to addresses outside the United Kingdom. The Company's stores trade under the name of Debenhams other than the Danish stores, which operate under the Magasin du Nord banner. Its stores offer customers a range of services, including restaurants and cafes, personal shopping assistance, hairdressing and beauty treatments, nail bars and wedding or celebration gift services. Its Debenhams Direct ( offers a range of products and services for online customers. more »

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Ted Baker Plc is a United Kingdom-based global lifestyle company. The Company offers a range of collections, including menswear, womenswear, global, phormal, endurance, accessories, audio, bedding, childrenswear, crockery, eyewear, footwear, fragrance and skinwear, gifting and stationery, jewelry, lingerie and sleepwear, luggage, neckwear, rugs, suiting, technical accessories, tiles and watches. The Company operates through three segments: retail, wholesale and licensing. It operates stores and concessions across the United Kingdom, Europe, North America and Asia and an e-commerce business based in the United Kingdom, primarily serving the United Kingdom and Europe, with separate the United States and Canadian sites dedicated to North America, and a separate site serving Australia. The Company's wholesale business in the United Kingdom serves countries across the world, particularly in the United Kingdom and Europe. The Company operates both territorial and product licenses. more »

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

26 Comments on this Article show/hide all

hayashi22 11th Apr 7 of 26

In reply to post #468216

Yes agree. Grant Thornton is a national and international disgrace. The main people there should be put on trial for various felonies and misdemeanours.Seems like they cut corners and maybe picked up work by undercutting rivals on price only to do shoddy audit work.

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Carcosa 11th Apr 8 of 26

"felonies and misdemeanours" Reads like someone has been watching too many American soap operas!

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Zipmanpeter 11th Apr 9 of 26


I think the extra £1.9m sales but flat EBITDA vs last March 19 trading update likely reflects that they have chosen to shift via deep discounts a lot of the off-style stock that has plagued them for the last 6 months. Hopefully, this is a one time hit. IMHO, their 'New in' product, and certainly advertising, has returned to its more garish but successful 'glamourwear' roots .

In turn this reflects the Founder/CEO stepping back in after it threatened to implode when it tried to go bigger and corporate. Likely to steady the ship but also shows the upside is limited and succession a challenge

The Debenham exposure is big (23% of total revenue) and the March review will likely suggest closing some old standalone stores. But I also see opportunity for Quiz in further store openings in regionally high profile Shopping Centres of the type where D-list Towie style celebrity events will still work to build the brand online). Their own existing short leases and the widespread retreat by other retail brands will make this feasible.

In 2 years, I'd therefore expect total sales still around £130-140 Mn pa ie net, not higher than now (and for comparison equal to £FCCN). But Quiz will be 40-55% online, mostly from their own website supported by international sales and small network of 'brand experience stores'. If they stay in their niche (women's glamourwear) a nice, relatively small business should emerge.

Risky but still potentially rewarding if one is prepared to be patient - there's a lot of business and EBITDA (in 2 yrs) at 18.5p/share with an EPS of 4-5p forecast, a modest divi likely and effectively no debt/some cash on the balance sheet. 

Disc I hold a small position  

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PJ0077 11th Apr 10 of 26

In reply to post #468276

All fair points Zipman

The valuation of QUIZ (LON:QUIZ) has become interesting. The company today has an Enterprise Value of just £11m, despite having £41million of rapidly growing online Sales hidden within the larger group's £130.9million of Sales.

As you say, there is also sizeable scope to expand on the High Street e.g. the company has only a handful of stores in London & the South East.


Investors inevitably linearly extrapolate whatever has just happened. If the news is bad (QUIZ) the company gets priced at less than 10% of Sales. If the news is good (Sosandar) the company gets priced at 600% of Sales. At least one of these valuations appears to be incorrect.

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mammyoko 11th Apr 11 of 26

Looks from my portfolio as if risk is back on for small caps this morning - plenty of mine up 3%+ including Scapa (LON:SCPA) Gooch & Housego (LON:GHH) Fulcrum Utility Services (LON:FCRM) Flowtech Fluidpower (LON:FLO). Could be a good summer now the cliff-edge has been averted!

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dangersimpson 11th Apr 12 of 26

In reply to post #468181

Good summary Leo,

One minor point, I don't think the revenue decline will be as bad from Debenhams store closures.

I think Debenhams are planning to close 40 stores, although this could change in the future. At the moment QUIZ (LON:QUIZ) are in about 2/3rds of Debenhams stores, so if they are in a similar proportion of the closures, this would be 0.66 x 40 x £162k = £4.3m revenue reduction (3.3% of the total)

The 162k is an estimate but comes from the Quiz admission document. In 2017 QUIZ's 148 concessions generated £24.1m revenue = £162k per concession, on average. There will be some growth and inflation but I would also expect the least profitable debs stores to be the least profitable quiz concessions since debs are, at least partly, blaming low footfall for their woes in these stores.

The difference to the 23% in the RNS is because they are reporting debs concessions and debs website sales together. Based on the £162k per concession estimate then this would be split £19.3m concessions and £10.7m web sales.

The debs web sales will be growing, high margin business compared to the concessions so it is definitely a relief that debs was sold to lenders as a trading business.

Overall, the success or failure of quiz will depend on getting the range and marketing right and hence being able to grow revenue back up to the level they had staffed the business for at the half-year.

Book: Excellent Investing: How to Build a Winning Portfolio
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Snoo 11th Apr 13 of 26

In reply to post #468281

The High Street is more of a problem than a solution for stores such as QUIZ (LON:QUIZ) I feel - even if there may be bargains to be had from landlords. Stuff like Bonmarche, Moss Bros are too store-heavy and vulnerable to make up the large costs so a downturn in trading really hurts.

Only a brief look at some QUIZ stores but I feel they are better suited as a concession rather than a standalone store. They are priced towards the bottom end of the market but I don't really see massive footfall above the likes of anyone else like Topshop, H&M etc. Primark on the other hand seem to have cracked it, their stores are usually incredibly busy and crowded.

At the moment it does seem like Quiz do not really have a niche they can defend. They are broadly budget occasion-wear for women, but their downturn could easily be ascribed to competitors simply improving as opposed to them choosing the wrong clothes this season.

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Trident 11th Apr 14 of 26

I suggest Mike Ashley is becoming more like the average bulletin board investor, investing on instinct, and hope.

I think we have all been there!

Perhaps someone should send him a Stocko subscription link.

£150m loss has got to hurt even a billionaire, and I suspect there are a few more decent losses he has made on other rash purchases as well.

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paraic84 11th Apr 15 of 26

Some excellent comments on QUIZ (LON:QUIZ) today - thanks everyone!

I have been in and out of this share (currently out) and I like to keep a close eye on its marketing. Towards the end of last year (when the recent problems started?) a lot of its marketing was focused on associating the brand with TOWIE: Over the last month I've noticed TOWIE associations seem to have been ditched from its marketing although this might just be a pause (I don't follow TOWIE so not sure when it airs etc). Several younger friends commented to me that TOWIE is a bit passé so this probably tarnished the brand.

I'm sure the TOWIE association probably wasn't its only problem but anyone living in London will have noticed it was a very significant part of its marketing. So it will be interesting to see if this change now improves sales although there are no indications that March was any better in today's update.

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catalogue 11th Apr 16 of 26

Following your very useful review of VP recently have you taken a view on the CMA report? (sorry forgot the KD shortcut to display stock code etc.)

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jdnthomas 11th Apr 17 of 26

Today is the second mention on SCVR in a couple of weeks of "Lord Lee". I feel I should know who he is, but I don't. Could someone please enlighten me, and explain why his presence on the share register is apparently seen as a positive sign?

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seadoc 11th Apr 18 of 26

In reply to post #468326

Lord Lee of Trafford became the first ISA millionaire in 2003. He wrote regularly for the FT but now just about monthly in the Money section of the Saturday edition. If you have a subscription to FT start there. Else:

His biggest holdings is (was) Treatt (LON:TET) Because I read my weekend FT, 15 yrs ago I put in a small amount and Treatt (LON:TET) is now also my biggest holding.

PS My 5th biggest holding is James Fisher and Sons (LON:FSJ) and I think that was also a share he discussed nearly 20 yrs ago.

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jonesj 11th Apr 19 of 26

In reply to post #468326

Additionally, Lord Lee wrote a book called "How to Make a Million -Slowly", which I recommend.
Also, google should bring up several videos on You Tube.

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Zipmanpeter 11th Apr 20 of 26

In reply to post #468306

Based on my 16 yr old son & his friends, the Daily Mail and ITV investor presentations (known in my P&G Marketing days as one-on-one in depth interviews, media and financial reviews, 2018 was a year that for young people on a budget said.......Love Island, yes please!!; TOWIE who?

I note that TOWIE 'stars' are now mostly in their late 20s ie ancient to a teenager and that in March 2019 TOWIE itself tried to relaunch with a new young cast and a culling of the old guard.

From a Marketing point of view in the last 6-12months at Quiz has been a disaster. It has changed/messed with and diversified away from what made it succeed in the first place and backed the wrong endorsers all whilst changing/adding a lot of key personnel internally.

The good news: all major, self inflicted wounds but all relatively quick & straightforward to fix and none of them on the balance sheet directly. !! It's never going to be quality but risk:reward around recovery in its favour I think.

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Zipmanpeter 11th Apr 21 of 26

I meant to add (at risked of being trolled for regionalism) that in my own personal observation is that fashion styles are a bit different "up North" where Quiz was historically concentrated (HQ is Glasgow). Women there tend to wear more make up/traditional glamourwear (think recent Aintree Grand National coverage) than for instance in the more casual South/South West where I live in now.

TOWIE by definition is (South) East so a further relatability mismatch to the traditional Quiz consumer base. Even (also ageing) Geordie Shore stars might have been better.

My point being that these are further evidence of basic Marketing errors that easily fixed

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Graham Neary 11th Apr 22 of 26

In reply to post #468206

Hi Richard,

I've written a quick note on Instem (LON:INS). I don't know anything about the company but I don't mind insiders selling sometimes (depending on their age, importance to the company, etc).


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Zipmanpeter 11th Apr 23 of 26

Re £ Renold, "a leading international supplier of industrial chains and related power transmission
" . 

They seem to be recovering after some internal issues last year within a LT strategic plan to re-organise themselves and act as a steadily acquisitive consolidator in the segment globally (currently have around 15% share I believe) with leadership in some niches.

They issued a trading update today that was basically in line (rev up 5.7% Y-on-Y and new Chinese factory open).  It also issued a circular designed to move it from the Main market to AIM to facilitate acquisitions, reduce costs and create some tax opportunities for shareholders.

All seems to make sense and looks good on a 2 year out basis.  I hold.

Current price 29p SR 72 (Q49, V87, M54)

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clissold345 11th Apr 24 of 26

I want to thank Stockopedia for letting me read the Smallcap Reports for so many years. Paul's analysis (and also more recently Graham's) has made me less ignorant about accounting. Eg Paul has often pointed out red flags in the accounts. Eg if a company supposedly has large amounts of cash why would it also pay quite large amounts of interest? Many thanks to Paul and Graham! Regards, Chris. PS I very rarely invest in smallcaps now so it's not really worth me subscribing to Stockopedia.

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lyndhurst25 12th Apr 25 of 26

If you want to know which shares Lord John Lee is currently holding, see

and click on the "Register of Interests" tab.

Speaking of becoming an ISA millionaire, if I ever manage it: how do you safely hold £1m in share assets in an ISA, given the maximum £85000 limit for FSCS compensation if the broker goes bust? Do you have to split your holdings between 12 different brokers?!!!

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peterg 12th Apr 26 of 26

I've never used more than 3 brokers, and each holds a long way over the FSCS limits. There is always going to be some risk in stock market investments, and the risks of serious losses via a nominee broker is unlikely to be near the top of the list. Losses require not only for the broker to effectively go bust but for there to have been serious fraud that has led to nominee holdings been misused or sold, or not properly ringfenced. There have been some problems with nominees where money has been lost, but none that I'm aware of have involved any of the larger, well backed brokers that don't encourage margin trading. Stick to those and the risks are not the biggest you need to be concerned with.

However, its certainly worth spreading amongst 2-3. If one does get into trouble, even if your investments are protected, you might not be able to access them for some time.

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 Are LON:QUIZ's fundamentals sound as an investment? Find out More »

About Graham Neary

Graham Neary

Full-time investor and independent analyst. Prior to this, I spent seven years in the financial markets as an analyst and institutional fund manager. I'm CFA-qualified, also holding the Investment Management Certificate and the STA Diploma in Technical Analysis.Away from finance, my main interests are recreational poker and everything to do with China, especially Mandarin Chinese. more »


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