Small Cap Value Report (Wed 4 May 2022) - WYN, JOUL, MPAC
Good morning, it's Paul & Jack with you today.
Agenda -
Paul's section:
Joules (LON:JOUL) (I hold) - yet another profit warning, from this very disappointing share. The CEO is leaving, probably a good thing - I think it needs a more hard-nosed rag trader to sort out the basics here, and strip out bloated overheads. Net debt is under control. I'm obviously frustrated with poor performance at Joules, from self-inflicted wounds. But with a tiny market cap, this could multibag on a recovery, or bidding interest.
Jack's section:
Wynnstay (LON:WYN) - I hold - ongoing conflict in Ukraine and the disruption of supplies from Russia means Glasson Grains continues to experience substantial one-off gains. As a result, FY22 profit should be ahead of expectations. These conditions won’t persist forever though, and the stock is close to all time highs, so valuation is a consideration.
Mpac (LON:MPAC) - increasing operational challenges due to macro conditions, but trading is in line and the prospects pipeline is ‘significantly above the previous year’. Longer term prospects remain positive. The shares spiked down recently before recovering, so perhaps one to watch in case something similar happens again.
Explanatory notes -
A quick reminder that we don’t recommend any stocks. We aim to review trading updates & results of the day and offer our opinions on them as possible candidates for further research if they interest you. Our opinions will sometimes turn out to be right, and sometimes wrong, because it's anybody's guess what direction market sentiment will take & nobody can predict the future with certainty. We are analysing the company fundamentals, not trying to predict market sentiment.
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Paul’s Section:
Joules (LON:JOUL) (I hold)
36p (down 33% at 08:20)
Market cap £41m
Board, Strategic & Trading Update (profit warning)
This must be the third profit warning in the last 6 months, so unsurprisingly the CEO Nick Jones has fallen on his sword, in what sounds an amicable way - staying on for an orderly handover, and receiving unusually warm comments in today’s update, for an outgoing CEO. I think it’s a good idea to have a change of leadership, because too many basic things have gone wrong in the last 6 months.
Profit warning - after 2 downgrades previously, which have led to a collapse in the share price, we’ve got another one today. I don’t know how much more the share price is likely to drop, because a bit like Superdry (LON:SDRY) (I also hold) the bad news is already factored in so much, that I can’t see why anyone holding would want to sell now. Both are excellent brands, and both could attract bidding interest (like Ted Baker (LON:TED) ), with both trading around breakeven it seems. As long as they don’t need to raise fresh cash, then long-term investors should be fine. My main worry is an emergency fundraise, but that doesn’t seem necessary as liquidity looks OK at both.
What’s gone wrong this time?
Discounting - I’ve noticed that my almost daily emails from JOUL seem to have permanent discount offers, typically 30% off. In my opinion, this moves the (very nice) product from way too expensive, to reasonably priced. So I’ve bought loads of stuff from JOUL website in the last 6 months, and am very happy with all of it - the product really is lovely, and I also like the brand image. Hence I see this as a brand with considerable appeal, but the business really needs a good sort out, by a more commercial new CEO. Give it 2 years, and I think this share could be a multibagger. The downside, is that if things don’t improve, then it might be forced to dilute shareholders with an equity raise. No sign of that today though, but we can’t ignore the risk.
Why are they discounting so much?
- A mixture of over-stocking, which was mentioned last time, so clearing excess stock.
- Also customers are becoming more price-conscious due to the cost of living squeeze, so they say, but in my view the main reason is -
- The product isn’t good enough to justify the excessive full prices. I think a complete re-think is needed, with prices permanently lowered, generating higher volumes at lower margins, and keener prices extracted from suppliers.
- Too much old stock, so customers are seeing "a lack of newness"
Clearly a lot needs to be done to streamline the business. I also feel the central overhead is insanely high. If you google Joules’ Head Office, it’s enormous, was a new build in recent years, and looks a vanity project to me. That's not even a warehouse, which is outsourced to Clipper.
Recently I compared the staffing levels at Joules HQ with Superdry (from the notes in their Annual Reports). They were similar, despite Superdry generating more than double the revenues of Joules - confirming my view that Joules needs a root & branch restructuring, to slash its excessive central overhead. That’s a big profit opportunity. The army of designers, etc, just aren’t earning their keep at the moment.
On the plus side, Joules owns the freehold, in the books at cost of £21.7m, and mentioned on page 30 of the last Annual Report that a sale & leaseback is one option for alternative funding, if the bank gets difficult -
Alternative sources of financing, including sale & leaseback of freehold property and asset financing that might reasonably be assumed to be available to the Group – noting that any financing from these sources has not been included within the forecasts that support the going concern assessment
Net debt - probably more important than profit at the moment, is cash/debt headroom, which looks OK -
The Group continues to focus on accelerating its plans to improve profitability and cash generation through cost restraint and clearance of aged stock. As at 1st May 2022, net debt was approximately £22m with liquidity headroom of £11m, in line with expectations.
As you can see, that net debt of £22m could potentially be eliminated with a sale & leaseback at book value for the HQ. So it doesn’t look anywhere near a crisis to me, although it depends on how trading goes in future. Banks don’t like funding losses, so a fundraise of say 10-20% dilution, combined with a sale & leaseback of the HQ looks possible to me, which would be unwelcome but not a disaster.
Revised forecasts - many thanks to Liberum’s analyst Wayne Brown for providing an update on numbers this morning.
He’s reduced forecast for FY 5/2022 from £5.0m profit, to £(1.5)m loss. Clearly a rubbish performance in H2. It made a £2.6m profit in H1.
He’s moved FY 5/2023 down to just above breakeven, which looks sensible - we need to see evidence of a turnaround being undertaken, before hopefully starting the positive cycle of upgrades. Or things could get worse, who knows?
Strategic Update - I won’t repeat this section, there’s nothing earth-shattering in it, just common sense basics to improve the business, such as shortening lead times, turning away uneconomically small wholesale orders, cost savings, etc. Basic things, which makes me wonder why they haven’t already been done?
My opinion - another profit warning doesn’t surprise me, given that we knew it was over-stocked, and has been in permanent sale for months now - hence lower margins.
The market cap is now so low, that the upside from a turnaround is very appealing, in my opinion. It’s likely to attract bidding interest too, at this level, in my opinion. So this is best seen as a special situation, not a regular investment.
There’s no getting away from the reality that management has made a right hash of things. The 3 profit warnings are not really due to macro factors, they’re mainly down to self-inflicted wounds from not properly managing supply chain, product, and logistics - all clearly weak points at Joules.
I very much question the performance of the army of people at JOUL HQ, and think deep cuts should be a priority for the new CEO, to restore profitability. This is meant to be a premium brand, so the product has to be spot-on to command high prices, which is just not happening.
We all know that inflation is a problem, supply chains remain problematic, and that some consumers are feeling the squeeze. So people want value for money.
The question is, with JOUL now down about 90% from its all-time high, has valuation overshot on the downside? It depends if the new CEO can deliver a convincing turnaround or not. Consumer stocks are being savagely priced down, but the way I look at it, is I’m not buying just this year’s earnings, I’m buying all future earnings, and consumers always recover from downturns. Whether the market is ready to look beyond the current squeeze on incomes seems currently doubtful, but it’s going to happen at some stage.
I’m staggered that JOUL is now only 38p per share, but being brutal, poor performance probably justifies a harsh market reaction in the short term. Very disappointing. Setting aside the emotional reaction, I do think this could now be a value opportunity at just £41m market cap. Time will tell.
.
Jack's section
Wynnstay (LON:WYN)
Share price: 620p (+2.31%)
Shares in issue: 20,311,177
Market cap: £125.9m
(I hold)
Trading update for the four months to end of February 2022
Wynnstay is a UK-based manufacturer and supplier of agricultural products reporting across two segments: Agriculture and Specialist Agricultural Merchanting. It provides feed for farmers at its depots, as well as other related products across its shops.
This is a slightly neglected company, probably dismissed as too boring, low margin, or tied to external factors such as the weather.
Look a little more closely though and I think you find a steadily growing, cash generative enterprise with solid expansion prospects and a relatively resilient (‘balanced’ as the management says) business model. Its track record of dividend payments is excellent, which goes some way to showing its priorities for shareholders and confidence in the future.
Events in Ukraine have been impacting Wynnstay’s business (positively), with fertiliser operations at Glasson continuing to experience substantial one-off gains.
This was as a result of sharply rising fertiliser commodities prices, caused by significant increases in the world price of natural gas, which is used to produce ammonium nitrate fertiliser. Since then, fertiliser commodities prices have remained abnormally high, reflecting the consequences of military conflict in Ukraine, including the disruption of supplies from Russia.
Glasson is a trusted supplier to the agricultural supply trade based at Glasson Dock on the Lancashire coast. Its activities include feed ingredient supply, fertiliser manufacture, grain trading, provender supplies, agronomy and shipping services.
Trading across the group’s core activities is in line with management expectations.
The Board therefore now expects the Group's pre-tax profits for the year to October 2022 to exceed current market expectations. Group revenue will also be significantly increased by commodity price inflation across all activities, including feed, however it should also be noted that the Group's absolute unit margin model means that Group operating profit will not benefit proportionately.
The last bit is understandable - Wynnstay’s absolute unit margin model also provides it with a degree of stability in less positive environments so it’s an acceptable tradeoff as it results in a more secure long term enterprise.
Diary date - Interim results will be reported at the end of June or in early July.
Conclusion
Weather, commodity prices, and farmer confidence all vary over time. At the moment things are good but there are cyclical elements here and the conditions will change at some point as they always do. Obviously, Wynnstay is benefitting right now but that can’t be expected to last indefinitely (indeed, let’s hope some of the current dynamics end sooner rather than later).
The shares certainly aren’t expensive versus the wider market, but they do trade at the top of their range and so the stock is not as obviously cheap as it has been in the past.
It’s a tricky one. If I wasn’t already holding for the longer term, I would be hesitant about buying a stock benefitting from one-off gains which trades at close to all-time highs, given the current wider market mood. A reversion in short term trading outlook and a derating in share price is certainly within the realms of possibility over the next year or two. That could present a compelling opportunity.
Longer term, Wynnstay has a sensible growth strategy, supported by low-risk bolt-on acquisitions, and is investing in its existing operations. That leaves it well placed in its industries to take share and expand beyond shorter term cyclical fluctuations.
It might not shoot the lights out, but this is a proven operator that has been around for more than a century, paying dividends to shareholders, with a clear vision of where it is going. The business is well balanced across arable, feed, and retail and its absolute unit margin model should be a plus in a volatile and inflationary environment.
Mpac (LON:MPAC)
Share price: 480p (+0.52%)
Shares in issue: 19,929,396
Market cap: £95.7m
This is a packager focusing on high-speed and automated solutions for customers.
A very short AGM update now that I look at it, so I’ll just paste the important section and move on.
The Company is pleased to report that trading in the current financial year has been in line with the Board's expectations. In addition, the prospects pipeline remains strong, and the current orderbook is significantly above the previous year, providing extensive coverage over forecast revenue. Supply chain uncertainties and operational challenges have increased, amplified by transportation delays at global ports and increased macro-economic uncertainty following the Russian invasion of the Ukraine. However, mitigation measures have been implemented and the Group's prospects remain positive due to the strength of the orderbook, the prospect pipeline and the end markets we serve.
Conclusion
Mpac continues to impress, in my view, although I have yet to take a closer look at the company. Its Switchback acquisition a couple of years ago in the US looks to be a canny bit of business, and the group’s wider ‘One Mpac’ strategy is creating a more integrated and efficient enterprise.
There’s also an intriguing clean energy battery manufacturing angle here (FREYR), although this remains in its early days and is not mentioned in the update.
The share price is treading water after a strong rerating a couple of years ago.
Who knows with these markets, we may be presented with an attractive entry at some point if the shares spike down to the £4 level again. For that reason it’s on my watchlist awaiting further research.
It’s worth noting that there has been no equity dilution, and the valuation looks undemanding on the face of it.
Operating cash flow took a hit in FY21 due to a swing in working capital - presumably to manage inbound supply chain pressures.
The clear risk for now is the ‘increasing’ operational challenges in the short term, possibly alongside expectations management as it transitions from turnaround to growth. And Mpac does have some interesting growth opportunities, so I think it’s worth monitoring in the event of further share price volatility. That’s just my take, so DYOR and do share any views/insights in the comments.
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97 comments
Good to see the volume of comments is up. I hope it’s a sign that things might turn around.
My broker AJ Bell pulled a binder today. Ive been out all day so I put in a limit buy order on Somero Enterprises Inc (LON:SOM) at 416p and they secured the transaction at 408.8p
Looking back on the day’s trading, that price was the lowest of the day and has since recovered to 420p (The bottom of the rising channel).
Thought I’d just praise a good deal from my broker as we are all quick to comment when we think they have dove a bad job.
PS There are quite a few quality shares trading at the bottom of rising channels with the RSI also at rock bottom so it would take serious bad news to take them lower. I’m buying those shares. Somero Enterprises Inc (LON:SOM) Redrow (LON:RDW) Barclays (LON:BARC)
Right now the problem in Small Caps is retail nervousness. As people have commented it is a case of sell the rumour and sell the news, irrespective of whether the news is good or not. Any selling leads to other nervous holders selling, triggering 5%+ declines on nothing. Rumours cause share prices to move and if refuted/false will rebound initially only to quickly get sold back down to similar levels as if the rumour was true. In-line or good news is met with indifference. Volumes moving the shares are generally light. Lots of small to medium cap UK shares are now priced on 3 or 4 times earnings even those with net cash. Clearly mis-priced as a real business but that just doesn't matter.
Investors are not really valuing business profits into the future at the moment. They are just assuming inflation and any income squeeze is permanent. We are in the opposite investing climate of "climbing the wall of worry".
Fundamentally commodity stocks are the only gainers. It's where any hot money has gone.
What turns this around I don't know. If the Fed tightens the market worries they've overdone it and recession is round the corner. If they don't the market worries about inflation. So there is no obvious catalyst there either.
And yet, it is when all hope is lost and there seems no way out, that the bottom is reached.
Im not sure we are there yet but I do know we’ll only realise the bottom long after it has passed.
Joules.
I bought a shirt from Joules just to test the product. It was expensive and had a very "agricultural" feel to it. A luxury price for a very ordinary product. Needless to say I did not proceed to buy the shares.
Lennart
Maybe, but not necessarily. We're seeing PE compression across markets where shares are being derated on the basis that future growth won't be worth as much
And, as an out and out growth investor, don't I know it.
But Luceco had already fallen 60% before today's 30% slump, following decent TUs. Of course the price had got toppy at ATHs but this is still a profitable company, with industry leading ROICs and margins, whose PER did not exceed 20x at the peak, as I recall. It's hardly comparable to Halma because it was still less than half the multiple at its ATH. Inflation/Fed is of course a contributing factor but I put the greater part of the moves down to extreme nervousness on the part of investors and I'll just stay patient with my very small, now smaller, position. I only take this view because management assures us that "all input cost inflation will be fully offset by selling price increases" - a sign of a decent moat and quality company which offers some hope of a reversal when inventories are run down. Normally I would sell on a warning this severe.
Re Andrews Sykes (LON:ASY) - fair point but we could do with more 102 year olds planning for the future like him
Andrews Sykes (LON:ASY) reported today - figures appear good and no sign of share dilution. Spread is 'challenging'. SVCR last talked about in 2018 - time for a refresher?
Year ended Year ended 31 December 31 December 2021 2020 GBP000 GBP000 Revenue from continuing operations 75,219 67,259 Adjusted EBITDA* from continuing operations 28,946 26,089 Operating profit 20,074 16,386 Profit after tax for the financial period 15,540 13,020 Net cash inflow from operating activities 23,589 22,255 Net funds 16,509 7,672 Total interim and final dividends paid 9,869 19,442 (pence) (pence) Basic earnings per share 36.85 30.87 Interim and final dividends paid per share 23.40 46.10 Proposed final dividend per share 12.50 11.50Andrews Sykes (LON:ASY) reported today - figures appear good and no sign of share dilution. Spread is 'challenging'. SVCR last talked about in 2018 - time for a refresher?
Less than 10% free float, held by a family trust controlled by Andrew Murray who is, I believe, 102 years old. Quite why it's listed is a mystery but the family could take it private whenever they wanted at no premium so probably not worth spending time on.
timarr
Any chance of a comment on the collapse in share price of Luceco?
Luceco (LON:LUCE) is now down more than Joules (LON:JOUL) which I find a bit strange - of the 2 udpates I thought LUCE was the least worst!
Luceco (LON:LUCE) is now down more than Joules (LON:JOUL) which I find a bit strange - of the 2 udpates I thought LUCE was the least worst
Well, looks like a £10 million adjusted profit warning, about a 30% hit to adjusted EPS, so the fall seems about right. It's a bit hard to disentangle what the trading update is saying but it looks like most of that is due to suppliers overstocking, and a bit to a general slowdown in sales.
So as it stands the fall looks roughly about right, but perhaps a bit overdone if the main cause is overstocking, which will unwind. But markets are nervous ...
timarr
Yes but the downgrade only relates to this year's profit - when you buy a share you have a stake in all of the company's future earnings stretching into eternity. Unless you think profits are going to be permanently 30% lower then the fall looks overdone. However, markets clearly very nervous so not surprised at reaction.
RE: Luceco (LON:LUCE)
Yes but the downgrade only relates to this year's profit - when you buy a share you have a stake in all of the company's future earnings stretching into eternity. Unless you think profits are going to be permanently 30% lower then the fall looks overdone.
Well I've been doing this investing lark for forty years now, so I do recognise that. I'm merely pointing out why it's fallen as much as it has, not agreeing with the rationale, or lack of, behind it.
But on that reasoning a profit warning would never result in a share price fall unless it was somehow a permanent thing. As we know people don't think like that, they tend to extrapolate recent events indefinitely into the future, rather than assessing whether these are one-offs or not.
Human nature, and all that jazz.
timarr
about a 30% hit to adjusted EPS, so the fall seems about right
Except it already fell 30% in anticipation of the problem - a characteristic that we are seeing all over the market this year - sell the rumour and sell the news!
RE: Luceco (LON:LUCE)
Except it already fell 30% in anticipation of the problem - a characteristic that we are seeing all over the market this year - sell the rumour and sell the news!
Maybe, but not necessarily. We're seeing PE compression across markets where shares are being derated on the basis that future growth won't be worth as much as investors thought it would be previously, due to a combination of inflation, interest rate and recession concerns. So it's possible the previous fall was simply in line with the market and this is an additional hit on top.
We're seeing this across the board with previously highly rated stocks seeing their prices compressed due to reduced expectations about the value of future growth, even though they haven't warned at all.
I know these aren't comparable to Luceco but things like Dechra Pharmaceuticals (LON:DPH) (down 36%, current forecast PE 28), Genus (LON:GNS) (down 60%, current forecast PE 26) and Halma (LON:HLMA) (down 24%, current forecast PE 34) have suffered despite their perceived quality and are arguably still not cheap. Plenty of others out there. When larger cap quality companies like these get derated we can expect the fallout further down to be quite nasty.
I do think Luceco (LON:LUCE) looks interesting at this level, but I wouldn't be surprised if there was another warning as DIY growth slows dramatically this year.
timarr
I agree Bouden.
Having held and got to know both over the last couple of years its strikes me that one is a fundementally good, pretty well managed business having some short term issues which I believe they are capable of dealing with. Where patience over the next year should pay off if buying at current prices.
Whereas the other is not and does not have the capability in house to deal with the problems they face, if they even recognise what those problems are. The best hope here, in my view, by whatever vehicle, is that the full board of directors is thrown out , replaced by properly qualified and experienced operators and the business is turned around over the next 3 or 4 years and sold on.
£AMZN talked about having too much warehouse space in it's earnings report yesterday. I think explains the weakness in Somero Enterprises Inc (LON:SOM) share price recently.
Yes, until the last few days, my investments in warehouses have done very well e.g. Tritax Big Box Reit (LON:BBOX) . Perhaps the market is remembering that these are cyclical assets too.
Hi Paul
As Boohoo (LON:BOO) market cap now sub £900m any chance that you feel like writing this up here or on the general discussion page (https://www.stockopedia.com/co...)? I haven't read the RNS (was out on my daily cycle to Antibes and could do without crying over my breakfast) but obviously awful from price reaction and comments here.
I hold and will continue to hold but I may reduce my already decimated holding, but yes this has been a huge error on my part and I am surprised at the carnage. Cuddlesticks comments below (above) is telling:
" To me, management always came across as capable, confident and positive, today I think they look, nervous, exhausted, shell shocked even."
Regards
An exhausted and shell shocked shareholder.
Michael
Michael sorry to add to your woes, but I like to track Trustpilot scores of various companies now as a proxy for their sales behaviour:
The number of BooHoo reviews has collapsed over the past year, which could mean fewer sales or fewer new customers (people who have already reviewed won't review twice for example), suggesting a reduction in market share?
The other worrying thing is they seem to be getting just as many negative as posivite reviews now, wheras before it was overwhelmingly positive.
Not looking good I'm afraid...
Link: https://uk.trustpilot.com/revi...
Whats the breakdown between proactively asked reviews vs organically provided reviews?
They don't do any pro-active - entirely organic:
No worries Harry. Damage has been done. I am just trying to decide whether to halve my exposure now. It is a difficult one but at now just 3.4% of portfolio (from about 12%) it hardly seems worth it but I was saying this when they were double where they are now.
Funny old world. Their revenue is 10x what it was when I first invested in November 2015, cost of sales 10x, operating profit 9x, post tax profit 7.5x.
Share price back in February 2016 I bought some at 44.35p. Today I could buy them at 70p.
Sometimes I do wander whether I really know what I am doing or if I am the patsy at the table.
And before people chime in - yes I am pivoting away from small caps; come two years half the portfolio will be in Berkshire and teh S&P.
Regards
Michael.
I too would expect the budget end of consumer facing markets to suffer less, but the outlook for the consumer is so terrible that even a large slice of trading down will not cancel out the problems. I read the trading update from J D Wetherspoon (LON:JDW) today and you don't get much more bottom end than Spoons. In between their normal load of b******s you get a sense of conditions. They hope to maybe break even this year and cite the same "considerable pressure on costs, especially in respect of labour, food and energy" that is affecting everyone else.
The problem is, the outlook for food and energy costs is getting worse not better (e.g. EU oil embargo and food blocked in the Black Sea). Meanwhile, the labour market is showing no signs of improvement. A club that I am associated with recently advertised 2 positions: 1 in the office and 1 in hospitality. We had over 80 applications for the office job and zero, yes ZERO applications for the hospitality role. The people that would have been filling those roles have all disappeared.
There can only be more pressure on business margins and household budgets to come. Valuations on some consumer stocks may be more reasonable now, but while the opportunity set has increased, so has the risk.
Discussion on Joules this morning (I have never held) made me look at the chart and I see there were also profit warnings on Dec. 14th and Feb 1st.
This made me think of Stocko's excellent Profit Warning Survival Guide . This was a while ago so if you are relatively new and have not heard of it you really should have a look:
Every time I edit the link shows but will not appear so try HERE
Selling when you are carrying a loss can be difficult but this made me be much more reactive to PWs and in the majority of cases where I have sold they have not recovered to that point
Exactly what I did with Luceco (LON:LUCE) this morning. I held as I try to trade on news not noise, the news was good so far but the SP continued down and I ignored (to my peril). Today the news was bad so got out. Obviously a stop loss would have been better than the 50% hit I took in the end. Hindsight.....
As a holder of Smiths News (LON:SNWS) I have just listened to the Investor Meet Webinar with the CEO and CFO which I found reassuring.
A few points worth mentioning. Tuffnells paid £7.5m instead of £8.5m being the Final Instalment on the Sale Price agreed a year early after reaching agreement to do so with Smiths News.
Smiths are forecasting an annual decline in the market for papers and magazines of 0.5%.
Annual Cap Ex budgeted at £4m.
They have 36 Warehouses which only work between midnight and 6am so they have reached agreements to rent out a number of these Warehouses during the day time hours thus generating a new income stream.
Strong Free Cash Flow should see continued falls in Net Debt which fell from £70m in H1 2021 to £38.8m in H1 2022.
I think the shares are undervalued but then again as a holder you might think I am biased!
Yeah, I thought the Smiths News webinar was good. Nothing flashy, detail focused, and answered the questions clearly and concisely. It feels like the management (well, the CEO and CFO at least) are well matched to the company and the job which is being done.
91p in the pound (the CFO's phrase) on the Tufnell's payment felt fine, in return for receiving the payment a year early and giving them a little more financial security. They confirmed there are now no more big ticket payments coming in, so debt will reduce at a slower rate from here, but should still go in the right direction.
It also seems they do have decent, realistic ideas for new revenues/profits, but aren't going to do anything hastily, unless and until they know it will deliver profit and sales. It seems they won't grow the top line for the sake of it, unless profits are delivered as well.
They also confirmed they are looking at acquisitions, but only small to medium ones, and ones that won't negatively affect the debt or dividends position they are now in. All good news in my eyes.
We might not get the rerating we're hoping for in the next 12 months or more, but we will get paid to wait, and it should come if mgt keeps doing what they say they will.
I'm also hoping the World Cup this winter delivers a boost to cashflow and profits - the Euros 2020/2021 helped deliver GBP1m in EBITDA . Fingers crossed.
Happy investing.
Chris
I listened to the webinar too, albeit alongside trying to get some work done on my other screen!
I felt that they presented very well and was particularly pleased to hear of their tactical approach to letting out some of their warehouses in the daytime to generate additional revenue. I'd be interested to know if they will disclose how much revenue this is actually generating.
Perhaps I was scribbling down my notes too frantically, but I though J Bunting said that they were working on a model of Newspapers and Magazine sales declining by 5% per annum, not 0.5%?
Closing statement of being "very pleased" at half year and expecting to be in a good place at full year is encouraging. I can't help but feel at the moment that there needs to be some form of catalyst for change. The market seemingly doesn't seem to care that this presents itself as undervalued, and I wonder what needs to happen to get the SP moving North. Without any detail of potential future revenue streams to bring significant value to the business, I can see this poodling along for quite some time to come.
Hopefully the remaining £6m of the £10m cap that can be given back to shareholders will be granted in the form of a dividend at full year. (I hold).
Yes 5% pa is correct - I seem to recall 6% annual structural decline in their business as standard. Business seems fairly valued considering this. Now if that structural decline somehow flatlined then the share price could take off!
Hi Paul, if you have some time, your thoughts on the Luceco warning would be very much appreciated by a number of readers,
Many thanks and kind regards
Ucemarn
Arguably if an owner tends towards selfishness, as opposed to shared risk with their shareholders you would ordinarily expect to see a delist/buy back just as it looks internally on stats clear to the owner that there is an upturn in sight but the market has not caught on. So with Boohoo (LON:BOO) I doubt if anything of this sort of thing will happen until we have travelled a few more market miles yet.
It's a fascinating market at the moment. Some of the market and sector movements make obvious sense, others are less easy to explain or understand. Clearly inflation and rising interest rates are hugely influential, and the potential of a recession if the interest rate balancing act doesn't go well for central banks. However, in an environment of families tightening their belts, less discretionary income, an increase of brand 'downtrading' etc. one would normally expect budget retailers and those operating at the bottom end of the market to do relatively well. However the market has hammered them along with everything else - B&M and Associated British Foods have been slammed despite the conventional thinking that Primark et al should be doing OK for the next phase of the cycle. I am on the fence as to whether there might be an opportunity to benefit here or not. I can only assume the market is bracing for a truly awful period and that although these budget retailers may do relatively well, they are still going to suffer as people focus on heating and feeding themselves with even low budget expenditure on clothing etc. expected to be hit and not expected to be saved by the more affluent trading down.
Overall I worry for the UK as the pound is also taking a pasting which is also inflationary - unlike the US where the current imposing Dollar strength will help bring inflation under control perhaps faster than many imagine. It's not beyond the realms of imagination to see a world where US rate rises end up not being as big as anyone expects in 12 months time, but Bank of England rates end up higher than anyone currently thinks and we hurtle into a deeper recession than anticipated. Europe is in a similar bind and is also tarnished with the gas supply crisis brought on by the war too. I have always been very UK focused (largely due to familiarity as I like to know what I invest in) and I was convinced last year the US was hugely overvalued, but I am increasingly starting to think the market had this priced far better than I did - as usual! - and that we might once again see the US faring better than the rest despite the valuations (especially now the heat has come out of the FANG stocks).
Sorry not very small cap focused, but food for thought.
BIACS
I hold ABF and a bunch of consumer defensives - basically if you guys eat, I should make a return. Think the fall is large part that energy is a large part of the cost. Food is basically seeds, sunlight, water and carbon and feel like I may have underestimated the impact in the sector.
In general with the portfolio holdings & general observation if company reports I am finding myself surprised by the financial/operational impact and the quote impact (ie underestimating).
This thing people refer to as "inflation" is a new one in my investing career (and probably my living memory too). Things are certainly looking cheap relative to history (US & Elsewhere) but my history is very rose tinted!
More succinctly, I think I should be greedy but I am very fearful of being greedy (which is quite different to how I felt in March 2020) and all other dips.
Maybe that's your contrarian indicator!
Some great observations I was thinking the same as you re the US and dollar strength.
However another school of thought is starting to circulate with the Fed looking to tighten I think after three months into the start they are aiming to get rid of 100 billion of bonds per month.
Some informed commentators are saying all this money leaving the fed balance sheet and re-entering the monetary system will push up US bond yields and be inflationary.
Also who the hell is going to buy all these bonds given they need to shift two trillions worth to get back to pre-covid balance sheet levels.
If anyone with a clearer handle than me wishes to comment I would be most interested in how the above may/may not play out.
- Saying that this will "push up US bond yields and be inflationary" is contradictory. Outside of crank circles it is understood that a central bank reduces inflation by raising interest rates. This is done by selling government bonds, either in the traditional way at the short end of the yield curve, or now at the long end (reversing QE).
- They don't "need to shift two trillions worth". If they wanted to they could keep all these bonds and use other ways of reducing inflation.
- As to who buys the bonds, the primary dealers are forced to buy them under the terms of their agreement with the Fed. They will then sell some of these in the open market, so driving up yields. If yields rose to a level that the Fed was uncomfortable with, the Fed would stop selling.
- People who need clicks make all this out to be a bigger deal than it is. Over history QE on its own has made very little difference to inflation (not including asset inflation). The same will be true in reverse. The balance of aggregate supply and demand is what matters and QE makes little difference to this. Output capacity, short term interest rates and the fiscal deficit/surplus make much more difference.
- As to the stock market's reaction, that is a different issue. The more attractive bond yields are, the less attractive the stock market will be.
Thanks for the reply I'm just thinking though who is going to buy them on the open market ? I would have thought the Chinese will be reluctant given how Russian external assets were frozen at the start of the war in Ukraine and Europe is struggling with its own issues.
I'm also thinking that inflation started with all the covid bail outs ultimately paid for by central banks buying most of the bonds to fund it all and then all the excess money rather than ending up in assets as in 08/09 hit main street which when you add in supply chain problems and the war led to where we are now.
Inflation didn't start from covid bailouts at all. Inflation started as a supply side problem driven by the chaos caused by covid and lockdowns on freight and subsequent lower supply of components and goods. It was then exacerbated by the Russian invasion as this drove commodities significantly higher, pushing electricity & gas prices up significantly. It was then further compounded by a lack of workers who were either off with covid, left the jobs market or in the UKs case no longer here (post Brexit).
Couldn’t disagree anymore. The above sounds like the rhetoric provided by the FED, governments and media. QE especially in the US and it’s method of dispersion has created this inflationary bubble. Inflation runs hand in hand with a loose economic policy.
Boohoo (LON:BOO) (no position)
Due to cherry-picked updates over the last 12 months, alongside today's results, we're now able to see:
I have no real insight on the above, but as we're never usually able to calculate these periods ourselves, I thought that I would share.
2 more observations:
1 - Returns indeed look very high:
Note that my gross sales estimates consistently assume a 20% Sales Tax and are calculated by #orders * AOV/1.2.
2 - Changing KPI Figures
The estimates for Gross Sales above are not helped by the company retrospectively changing published KPI metrics.
This from FY21:
This published today. Note the change in 2021 numbers.
Very painful last few days..I half my stake at 10% down and pull the plug at 15% via stop loss.
Am heading more into cash whether I like it or not....which is a good thing of course, but does not feel very good ATM.
'Wake me up when September ends'' springs to mind.
I know the feeling. I've had (manual) stops triggering all over the place for months, though thank God the 'generated cash' has produced a strong return in the energy sector, so a stunning return on energy has offset a total disaster on everything else. On the positive, there are some interesting bargains appearing.
Paul.S
Which company?
Michael - Howdon will half stake today for me I think..will let the day playout so as not to react mid day.
After that Volex is close to half along with Somero..so all in all not the best....perhaps will get a bounce later in the week..but seems like further brutal sell off, which is not shown by any FTSE measure against my portfolio. Even my watch list is largely getting hammered last two days.
I have a few good shares which seem to be holding up , and would normally be averaging up, but my gut says sit on my hands for now.
Hi
Share price of Gresham House Energy Storage Fund (LON:GRID) up +2.52% (as I type) this morning on increased NAV (and possibly, the verification of its quarterly dividend payment).
Two highlight points from the RNS ....
Financial highlights
- NAV has increased to £577m, or 131.89p per share, up 15.03p per share or 12.9% in the quarter
- From the IPO in November 2018 to the end of March 2022, the Fund has delivered a share price total return of 64.1% compared with 22.0% for the FTSE All Share and an NAV total return of 58.8%
The quarterly dividend point is here ......
Q1 2022 dividend
The Board is pleased to announce a dividend of 1.75p per ordinary share for the period from 1 January 2022 to 31 March 2022. For further details, please refer to dividend RNS released this morning.
Full RNS is here ...
https://www.investegate.co.uk/...
Dividend declaration RNS is here ....
https://www.investegate.co.uk/...
For those not familiar with Gresham House Energy Storage Fund (LON:GRID) in brief, it builds battery storage facilities and trades electricity releases into the grid (it does a bit more than this).
Some vids describing it can be found here (see the CEO one from 3 yrs ago, and the PiWorld more detailed one, from 2 yrs ago).
https://www.youtube.com/result...
Gresham House Energy Storage Fund (LON:GRID) might offer some diversification in these volatile times, or attract people looking for dividends (with some share price growth, possibly).
I bought small amount a little while ago.
Regards
Howard
There is also Gore Street Energy Storage Fund (LON:GSF) in the energy storage sector. I'm not too sure how these differ and which to go for, so need to do a bit of research here (it's a pretty complex sector to say the least!). However I think it is clearly an interesting area to be invested in.
As far as I see some of the Solar Funds are also getting involved if people want a wider range than just battery storage. E.g. Nextenergy Solar Fund (LON:NESF)
https://www.investegate.co.uk/...
Phil
The bull case for energy storage is pretty clear - increased use of solar/wind will lead to ever greater variability in the electricity supply, meaning the energy storage providers will be able to charge a higher price for their electricity. The big NAV uplift in GRID appears to be driven by new capacity market (CM) contracts, whereby they agree to meet future demand at a set price (presumably at a much higher price than before, hence the uplift in NAV). At the very least these companies provide an uncorrelated income stream with a good deal of inflation protection - has to be a good thing in this environment.
Hi Bouden54 (& Edward John Canham)
Further to my post earlier covering Gresham House Energy Storage Fund (LON:GRID) then building on your two posts on Gore Street Energy Storage Fund (LON:GSF) then Nextenergy Solar Fund (LON:NESF) I took a look into some vids which explained where some revenues for battery storage emanate from.
This vid from Flexitricity is very technical but informative about the details of how the market works (most went over my head, but its possible to capture the gist of the messages).
It seems Flexitricity are people who trade the electricity stored in Gore Street Energy Storage Fund (LON:GSF) s battery assets, and I think some of Gresham House Energy Storage Fund (LON:GRID) s battery assets.
It might be of interest to some .....
A second vid I encountered was from a firm called Anesco, this is not at all technical but does focus on co-location of batteries with solar farms (as Edward's post about Nextenergy Solar Fund (LON:NESF) mentions).
The vid is here ...
I have no background in this area at all but I think it offers possibilities of both dividends, diversification and possibly growth. I have noted however that the different Investment Trusts mentioned so far do have quite varying fees and dividends so it requires the DYO approach.
These are but two vids, there are many other examples for those interested to dig deeper. Also I believe Gore Street Energy Storage Fund (LON:GSF) was presented in the most recent PiWorld Stock Slam. I have not watched that yet but will do soon.
Regards
Howard
Many thanks Howard. I wouldn't bother with the Gore Street Energy Storage Fund (LON:GSF) Stock Slam presentation to be honest - the presenter didn't seem to have the faintest clue what the fund actually did (to put it mildly!)
Hi Bouden54
Thanks for the heads up.
Regards
Howard
Just to add to recent posts about sustainable energy related funds, I recently noted some interesting comments from (perhaps) an unexpected source as Peter Spiller of Capital Gearing Trust fame explained on Citywire why he had invested in a large number of such funds. His reasons include many of the funds benefitting from rising inflation. Admittedly too late, but yesterday Ripple Energy closed their innovative share offer enabling the public to finance the building of a wind farm expected to start operating in 2023, qualifying them for discounts on electricity bills. The value of the discount depends on the value of the electricity produced by the wind farm over its expected 25 year life.
Beyond Gore Street Energy Storage Fund (LON:GSF) and Gresham House Energy Storage Fund (LON:GRID) , are there any companies in the energy storage space you find of interest please? With much of the renewable space generating energy intermittently, and therefore being pointless from a network management point of view, storage seems far more interesting. Whether there's a profit in investing in it is obviously worth of research. TIA.
What a mess at Joules (LON:JOUL) !
Not much to add to Paul’s analysis except to say that I personally found the tone and content of the company update today reminded me of an ostrich with its head in the ground. Very fundemental errors have been made over the last two years at least which have shown a basic lack of understanding of how to run and manage a retailer dependant on a global supply chain.
In my opinion this will be a very long path back indeed whilst this sort of complacency is demonstrated by the board. Without significant changes to the Board structure, not just the CEO, its hard to expect them to see the wood for the trees anytime soon.
I don't know about the global supply chain RutlandRam but the customer supply chain is worrying. Boohoo (LON:BOO) similarly, I hold both.
Silver
I'd planned to get back into some retailers, but I'm now staying out, expecting another, potentially more serious wave of issues coming from the recent China lockdowns. That, combined with inflation could literally be a killer blow to some companies.
Anything to say on Luceco (LON:LUCE) today Paul Scott as you have commented on most of their other updates?
A little manners go a long way. Asking politely would be a start, its only 9:40am.
Excuse me? I simply asked a question and it wasn’t directed at you so why butt in
Joules (LON:JOUL) I reluctantly sold out a few weeks ago at a loss. I like the product and think the stores are nice places to go, but I believe people have less disposable income than previously and I can't see people paying the premium at the moment.
Among my friends (early 40s, young families, middle incomes) I've noticed a lot more comments asking how much something is going to cost on days out, and our annual boys golf trip had a lot more debate over the affordable price of course and hotels. Yes some friends are doing well, but others are starting to feel the bite of inflation.
Joules (LON:JOUL) I reluctantly sold out a few weeks ago at a loss. I like the product and think the stores are nice places to go, but I believe people have less disposable income than previously and I can't see people paying the premium at the moment.
Among my friends (early 40s, young families, middle incomes) I've noticed a lot more comments asking how much something is going to cost on days out, and our annual boys golf trip had a lot more debate over the affordable price of course and hotels. Yes some friends are doing well, but others are starting to feel the bite of inflation.
interesting to see how much better £VlX is faring than Luceco (LON:LUCE) despite the obvious similarities between the two.
£VIX ? Do you mean Volex (LON:VLX) ?
Yes, Volex (LON:VLX) released a very positive update recently, but still the share price is being dragged down. Similar to most stocks!
Certainly a lot of fear out there at the moment, heightened by warnings from £JOU and Luceco (LON:LUCE) this morning.
Yes, typo, £VLX.
main difference seems to be Volex's diversified product & customer base. It also operates in more secular growth markets (EV, Data Centers, Medical etc)
Brokers have taken a chainsaw to Luceco (LON:LUCE) Boohoo (LON:BOO) and Joules (LON:JOUL) 2022/2023 numbers.
Boohoo (LON:BOO) 2023 eps -7.49p reduced to 2.48p(2024- 3.96p)
Luceco (LON:LUCE) 2023 eps - 20.9p reduced to 16.6p
Joules (LON:JOUL) 2023 eps - 7.4p reduced to 1.4p (2024 3.6p)
Of these Joules (LON:JOUL) looks the worst. In fact it looks a mess now in my opinion. CEO left, lots of debt. Garden trading significantly below expectations. Chance of a discounted placing is growing here I reckon. I suppose with a market cap of £40 million, and a pre pandemic profit of £7-13m you could make a case for it being cheap. Its not making it easy to like it tho, being on a PE of 25x 2023 forecasts
Hi gringo,
I challenge your assertion that Joules (LON:JOUL) has "lots of debt". As explained in the main article, net debt of £22m is the same as the book value of its freehold property, and hence could be eliminated with a sale & leaseback.
Also JOUL has a wholesale receivables book, which could be tapped as security for invoice discounting.
I do agree that there is a chance of a placing, but it wouldn't need to be large (if at all), if the alternative funding options were pursued. So not panic stations in my opinion. They should have time to turnaround performance, but that could take a year. In the meantime, I suspect someone's likely to bid for it - taking a longer term view as a turnaround, strip out a ton of costs, and then sell it back to the market in 3-4 years' time for 10 times what they paid!
Regards, Paul.
Paul, thats a very fair point.
Lots of debt is a sweeping statement and not correct.
how big is your position here Paul?
Sale & Leaseback would be cash in return for debt. Net debt would be neutral.
It's an alternate source of funds (vs dilution) but in my humble opinion a sale & leaseback or a fund raise are likely only to be considered if Net Debt is in fact a problem.
No position
Thanks for the info on Joules (LON:JOUL) Paul. I don't hold but having read that and looked at the history of Directors share dealing I might have a Recovery punt.
5-year contract extension for Totally (LON:TLY) for providing the Royal Mail with gyms, valued at
a total of £2.5 million.
Royal Mail (LON:RMG) has gyms? I'd have thought posties get enough exercise jumping in and out of their vans but pardon me, I will guess the gyms are for the elites.
the gyms are in the Processing Centres, less posties jumping in and out and more stood at a machine all day.
Pretty well equipped and very cheap from what I recall.
Positive results from Smiths News (LON:SNWS) . Some turnaround over the previous 18 months to 2 years. Given the difficult market conditions much credit must go to Jonathon Bunting, his management team and the workforce for producing such a good outcome. As has already been commented the shares do look absurdly inexpensive. I hold and would second the request for the view of Paul or Jack.
Hi jonno,
Sure, Smiths News (LON:SNWS) is a stock we follow closely here, so I'll take a look at it later. Just need to take a breather to compose myself first. Today has not started well.
Regards, Paul.
Good to go and get some fresh air away from the markets- it’s only money and more important is physical and mental health and being able to cover the basic costs in life. Making loads of money isn’t a necessity for happiness, and is often detrimental to the way a person sees the world and their relationships. Paul you’re a great person, true to yourself a character with bags to offer us, but you need to look after yourself first and foremost. I think we are all suffering a bit of being glued to these markets let’s all take a break and get back to some clear thinking
Sale of 2100+ plots announced by Henry Boot (LON:BOOT) near Didcot, that is 2/3 of their annual sales target... Any thoughts on whether they might be outperforming this year?
(I hold)
Interim numbers out from SNWS this morning. These shares do look ludicrously cheap on any metric. Borrowing is now down to just 0.9x EBITDA. Dividend increased from 0.5p to 1.8p with a forward yield approaching 10%. Interim earnings of 5p against a share price of 35p. Stocko likes them as well with a stock rank of 90.
Perhaps Paul would like to take another look?
Interim div for Smiths News (LON:SNWS) is 1.4p. I personally do not see why SNWS will not pay out the maximum £10m in full year dividends allowed by the renegotiated bank deal in December 2021, which would imply a dividend yield north of 10%, with net debt continuing to decline.
I agree the stock looks cheap on almost any measure - except that the Book value continues to be negative. But with the banks being supportive I think this can largely be ignored
The resilient H1 performance despite all the cost pressures and driver shortages is impressive.
Yes, interim divi 1.4p. Fat finger coupled with a failure to check before hitting the ‘post’ button.
I think you are a brave investor to rely on "supportive banks" at this point in the macro cycle. Personally I am backing strong balance sheets.
Smiths News (LON:SNWS)
Actually borrowing is down much more than 0.9* EBITDA now. They received £8.5m post y/e which is also being used to repay debt so it should be sub £30m and maybe 0.7* full year EBITDA
For divi I expect a 1/3 to 2/3rd split so maybe 4.2p or around 12%
So trading on a PE of 3 with a dividend likely to exceed 10% and net debt falling rapidly. Managing inflationary pressures and not really exposed to any consumer tightening (papers are habitual purchases). It does seem ludicrously cheap as discussed here before. FCF looks like £35m for the year less £10m of divis so net debt could be eliminated by end of next FY (18 months).
Interesting given the volume of papers are only down 2.9% which I'd say has positive read across (no pun intended) to the likes of Reach (LON:RCH) and £NWO
Wynnstay (LON:WYN) Trading update. A note from Shore Capital, upgrading forecasts by 18%.
Update from £LUCE (I hold). “Do you want the bad news or the bad news” reporting that panic buying from its customers last year is resulting in reduced orders this year. One of its major factories is in China and a few employees have had covid, however, they are not reporting material impact on supplies. I suspect a further painful drop today but fundamentally I think this is a sound business.
I suspect you are correct, in that there will be a fall on the update this morning. Seems harsh as the price has already fallen to allow for expected supply chain and cost pressure issues. I did some brief calculations in a dcf model. Allowing for £20m FCF and growth of 3% at a discount rate of 10% the value was 20% below current MV before market opens. If they can generate £25m FCF then on conservative assumptions it is valued about right. If price gets marked down significantly more than 20% I may consider a small top up.
The modelling is an approximation, but helps to give me a logical approach in what can be scary moments when price swings wildly.
Good luck G
Another predictable profit warning from Luceco (LON:LUCE):
Last year's unusually buoyant markets disrupted the normal function of global supply chains, leading to some customers ordering more product than it now appears they needed to meet demand. We expect that the reversal of this position this year will lead to a £15m shortfall in 2022 revenue compared to our previous expectations.
https://www.investegate.co.uk/...
I wonder if this will be the bottom though. Supplier overstocking isn't the worst problem in the world, even if it does suggest they don't have great visibility of where their stock is. They also seem confident they can pass through cost inflation.
Logically you'd think they'd be beneficiaries of a greater focus on energy conservation. Although logically you'd have expected that to be part of the government's energy plan.
timarr
Morning Paul. Elephant in the room question. What is your opinion of the BOOHOO results?
On Boohoo (LON:BOO) this says it all really: '...the group currently expects revenue growth to be broadly flat in the first half of FY2023' with performance expected to improve later in year (that old chestnut!). It's gone ex-growth basically. That is despite their acquisitions and presumably some of the revenue reflects inflationary-induced price rises too so in price-adjusted terms might mean the company is now shrinking. And to top it off tax charge will be higher in FY23 (among other pressures on post-tax profits) and the US-based distribution won't be available until FY24!* Zeus now has the company down earning just 2.5p for FY23 but that is predicated on revenue increasing and I reckon that is optimism from the company to suggest H2 will be better than H1 (for sales anyway).
I feel sorry for current holders and no doubt the current inflationary environment is a big factor (see Joules (LON:JOUL) today) but I do think major warning signs were there when international went ex-growth some time ago.
*Re-reading the sections about US-based distribution plans it's a bit confusing as to whether it will be ready in FY23 or FY24. It reads like it will be built in this year but not operational until FY24 maybe?
FY24 starts March next year. They said previously it will come online in 2023, so nothing's changed.
We saw Amazon struggling last week. Basically the retailers can't get the stock at a decent price from the far East at the moment and with China lockdowns getting more ridiculous by the day, the problem is going to persist.
I sold at long last today, which might well mean there will be an immediate and sustained good run for the share! Should have sold ages ago instead of adding more.
Shein didn’t even get a mention. What else has been conveniently omitted?
This might well be the bottom but a share sold can always be bought back again. There are so many quality small company shares that have seen big share price falls even after excellent updates, that perhaps offer more upside and less risk of yet more disappointments as is the risk still with BOO.
As its now my smallest holding (before today) I sold up and took the 70% hit. I am trying to focus on growing companies and ones that can drive profitability and I see both of those things lacking at the moment. They can turn it around for sure but it's a cut throat sector and the headwinds look very strong. Good luck to all those remaining
Watching the BOO investor presentation. To me, management always came across as capable, confident and positive, today I think they look, nervous, exhausted, shell shocked even. The auto que even seems to be stalling. I'm convinced they're a competent team but the world seems to have moved from underneath them just as they embarked on a huge capital investment programme. I'm curious to see how they come back from this, but its clear most investment thesis have been blown out the water.
Trading update from Joules (LON:JOUL) today (I hold). Not good news. Customers are clearly tightening their belts and reigning in spending. The home and garden business not performing very well at its peak peak and to cap it all, the CEO is leaving. I still think this is a long term hold but short term I expect the SP to drop. Sorry for the doom and gloom but I remain positive for the LT. Paul and Jack I don’t think there is much positive to say at this moment in time but would appreciate your thoughts on todays announcement. Thanks. Bristolian.
Good morning, Paul
Joules (LON:JOUL) have released a trading update, including strategic review and board change this morning.
Quite clearly a profit warning, with sales down in pretty much all segments. Assuming the price will fall again today, what are your thoughts on the revised business plans?
It seems they‘ve decided to overhaul their manufacturing processes, with the aim of getting the clothing collections more quickly into the shops. This will be crucial, if they are to compete successfully against other online competitors. (I hold.)
All the best.
Morning mcav, apologies as it appears I duplicated your post issued a few mins before mine, although when I posted there were no other comments.