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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