Good morning! It's Paul & Graham here, with our usual daily review of small cap trading updates & results statements.
Agenda
Paul's Section:
Made.Com (LON:MADE) - as expected, its shares have been suspended this morning, and Price Waterhouse Coopers are being lined up to become administrators of MDL (the operating subsidiary company). Proposals were received during the formal sale process to buy trade, assets, and brand out of administration. So the next step is that the administrator will sell off whatever they can, which usually happens quickly, and the proceeds are then used to pay creditors in the order stipulated by the law. Since it will owe customers, and trade creditors, then I would say the likelihood of any return for shareholders from the administration of MDL is probably zero, because shareholders rank behind all creditors in an insolvency. It says that, "in due course" the listing of MADE shares will be cancelled, and "any residual value will be distributed to the Company's shareholders". I've mentioned this before, that it looks as if the topco is not going into administration, and may have a little remaining cash possibly? Although there is a bank guarantee over leased properties that might consume that cash, and other costs, who knows? Anyway, it's a sorry tale from listing in June 2021, to insolvency in November 2022. What went wrong? Supply chain problems, and incompetent management I would say. Also, the arrogance of a "disruptor", thinking people would buy furniture online, when in reality most people like to see, and sit on furniture. Plus extrapolating out the pandemic boom in sales, and thinking it was structural growth. Then losing money hand over fist, and burning rapidly through a large cash pile. It was very clear earlier this year that MADE was heading for disaster, so nobody should have been holding this share who reads this column. I wonder who will buy it? The brand, and operations could be snapped up by DFS or SCS, possibly? Although maybe both would be happy to see it disappear without trace, leaving them more market share? Who knows.
Fulham Shore (LON:FUL) - an H1 trading update, with robust trading continuing, and in line with expectations. Rapid expansion of new sites is underway, and the company remains in a net cash position. Valuation would look attractive (forward PER of 13.2) in normal conditions, but the…
