Beale Share Discussion Threads

[hvs1] 01/3/2014 21:54

Not a business to invest in, a dead and dying retailer reminiscent of -'are you being served'- era, but some large shareholder property developer must be very pleased with a less than 2m price for the whole she-bang, not a business but an asset play me-thinks. Interesting times ahead.

[knitcraft] 01/3/2014 21:33

Assuming stock valued realistically net assets still over 10 million.
Might be of interest to someone wanting sizeable retail space or developing in other ways.
One to watch for any signs of buying and then might be worth joining in.

Interesting?

[simon templar qc] 01/3/2014 21:26

Loss as expected and net assets still declining. Like for like sales 4% behind last year. Market cap of £1.8 million says it all very high risk.

[coolen] 21/1/2014 19:26

Somewhat odd announcement, eh ?

I would have thought that UBS (the apparent buyer)was duty bound to complete a TR1 Declaration which details the purchase date(s).

All Beale tell us is "further to the announcement dated 5 August 2013".

[knitcraft] 21/1/2014 12:56

Institution raises shareholding. Action here one day. Worth tucking a few away for a rainy day.

[knitcraft] 21/1/2014 12:56

Institution raises shareholding. Action here one day. Worth tucking a few away for a rainy day.

[knitcraft] 21/1/2014 12:55

Institution raises shareholding. Action here one day. Worth tucking a few away for a rainy day.

[jojo_jo] 09/1/2014 18:54

Wasting time 'researching' (poorly) and then posting on a bulletin board is totally in(s)ane! I prefer to tilt with a short-seller who admits his position. At least that's honest. Shorters almost never admit to being short.
I have encountered short-sellers who have shorted far more illiquid stocks than this. It was much more liquid 9 months ago.
Nobody with more than two brain cells would waste all this time on a stock they had no financial interest in.

You talk nonsense yet again. Your attempts at scaremongering and de-ramping are as obvious as they are erroneous.
All businesses have to re-value their freehold/leasehold assets in their annual accounts. For years, while values were falling, this has worked against them. Recently, as property values increase, it is beginning to work for them. They have to revalue their property. Property values are just a part of the asset side of the balance sheet, which by definition, 'balance' the liabilities. Beale by no means have any particular leverage against their bricks&mortar. Banks don't allow such leverage after the lessons learned in 2008/9.

The groups debt is perfectly acceptable, and positive cashflows are now being achieved. They are well within the huge £12m available to them under the new'ish re-financing through Wells Fargo. That gives them massive covenant headroom over and above the previous £8.5m HSBC facility. That near-50% increase in available funds is a huge show of confidence by the American banking giants! It gives them the freedom and flexibility they need to reverse the last couple of years' decline - which they are doing.

Remember, low expectations and performance are well and truly priced in at this share price. In any event, the break-up value would likely give over £10m back to shareholders, so there's no risk whatsoever at the current £2.2m m/cap.

And what about this (not so) little bonus...

" The Company has recently entered into a transaction re the Tonbridge store where the Company had a lease up to June 2031. The Company has entered into a transaction with Sainsburys on 24 April 2013 whereby the Company received GBP1million on 25 April 2013 and, subject to successful planning and certain other pre-conditions being satisfied, the Company will receive a furtherGBP3 million on the lease surrender. The GBP1 million will be taken to profit over the period between the date of receipt and the anticipated date of lease surrender. "
So, as consent for the Sainsbury's takeover is very likely, they look like they'll be getting a £3m cash windfall this year! That's almost 50% more than Beale's current m/cap.

IMPO/DYOR/NAI
Jo

PS. I'm very happy there is a short position or two here. Pro traders regard short positions as bullish... they create the huge spikes, as the shorts get squeezed.

[oldtown] 09/1/2014 11:50

If i have made an errors in the figures then it's a genuine mistake, yet again as soon as anyone dares debate a share they are a shorter or a deramper.
It looks like i did indeed undervalue the propery due to the Revaluation reserve in the 2012 final results..
btw/ Would anyone even short such an illiquid stock?
Like i said, i will be happy to be proved wrong by the figures and if they are good, i will be the first to posts i was wrong on this thread.
I do note that the property Revaluation reserve i talk about was £9 million added into the 2012 final acoounts on the asset side,it's basically a reinstated property valuation , how many more times can they do this to cover the rest of groups trading debt if it keeps growing year on year?
Does anyone know the covenants on the new 3 year bank deal
aimho

[knitcraft] 09/1/2014 10:22

oldtown seems to be rather economical with the truth as well as extremely devious.

[jojo_jo] 09/1/2014 10:00

Try again...

that article is dated January 29, 2013 - it's nearly A YEAR OLD. More intentionally misleading garbage!

The May results are more up to date than that, and indicate a net asset SURPLUS nearer the £10m mark. Much higher property prices and the distinct likelihood of a good season should see this increased by at least 15%. So we have a company with a very positive NAV of £10m - £15m, yet a market cap of just £2.2m. This imbalance will be corrected. A fair share price is nearer 40p impo.

'Desperate' to get out short sellers should jump now, or risk being pushed out at a much higher price. Not many holders will be selling at this price. 20p perhaps - most would want at least 18p. Even at 20p this is less than half the NAV!

IMPO/DYOR/NAI
Jo

[oldtown] 09/1/2014 08:23

Department store group Beales is in talks to renegotiate its debt as it battles difficult high street trading conditions.

Auditor PwC is advising the 32-store retailer and it is understood the company may move its banking business away from HSBC, Sky News reported.

Beales has net debt of £5.2m and reported a loss of nearly £1m in the half-year to April 28, 2012.

[jojo_jo] 08/1/2014 19:15

What tripe! (Typical shortseller de-ramp - intentionally misleading.)

A buyer/bidder would only need to bid 15p (circa £3m) to prompt a defence (or acceptance). The loan security is IN the company, so does not need to be settled in the event it is acquired. They would need to have the general support of the preference shareholders, of course.

The book value of the property & plant in May 2013 was £24.7m. Off-setting the actual 'borrowings' of £8.6m, gives a surplus of £16.1m. Taking out the (derivative linked) preference shares valued at £6.5m, gives a figure of £9.6m. That's before adding back in the net current asset surplus of £6.1m!

So the break-up value, without even considering current assets (£6.1m - which is a rough indicator of the value of the trading element of the business) is certainly over £9m. Add in the value of the stock, etc and the break-up value is nearer £15m.

All this talk of break-up is academic, as it's not going to happen and not wanted by the preference shareholders. The business looks like it has had a good Christmas, which should continue through the year.

Everything, of course, is fully underpinned by the Freeholds which have jumped in value by over 15% in the last 3 - 4 months alone. On that basis the current NAV is nearer £11m.

The preference shareholders/landlords (of the properties not already owned outright by Beale) have a vested interest in the continuing success of the business and will continue to support it, as they have. Everything is well and truly underwritten, in any event, as indicated in paragraph 4 above.

IMPO/DYOR/NAI
Jo

PS. Any short-seller not jumping when he had the chance recently at 8.5p deserves what he gets!

[oldtown] 08/1/2014 15:35

Without wasting too much time on the in and outs of the company, it has a market cap of £2.2 m but had an estimated debt of £15.2m so you would have to actually have £17.4 million to take over this loss making company.
The market value of property is said to be about £10 million net, so the companay has a basic break up value of minus £5 million plus any value from the loss making business.
It's hard to see who would buy this business side, otherwise surley they already would have made a move with the shares trading so low.
How much on a break up valuation would store closing, staff costs and lease ending cost be?
To me it looks overvalued and i personally would suggest that the shares have no value whatsoever and the margins and sales figures look choppy to say the least.

aimho debt figure used from final results 2013 figures RNS

[jojo_jo] 08/1/2014 12:59

People who short stocks and don't get out when the m/cap is sub £2m need their head looking impo... especially when the net break-up value is around 5x this (£10m+), and based predominantly on freehold property, which is rising very quickly at the moment, and will continue to rise through 2014.

People who waste their time posting de-ramps in stocks they don't have a position in are even more ridiculous!

The High Street will always be around, and there will always be a niche for them. They have 'snob value'. Rackhams, Selfridges, Liberty's, Beatties, Beale, etc will always attract those who wouldn't be seen dead in TJHughes or TKMaxx. You can't try clothes on or smell a perfume online either.

They have suffered, admittedly, but come through the other end. They are slimming down - disposing of leases as soon as possible. This policy can only enhance their r.o.a.

I see a bright, improving future, and the jump today implies in-the-know buying before a positive update.

IMPO/DYOR/NAI
Jo

PS. Ask yourself this: if you had £2.2m would you not buy a business with such a relatively gigantic turnover and the safety net of an asset surplus c.£10m, based on Freehold property.
I tell you, if I had £3m I would be very happy to buy this company with the turnover and assets it has!

[oldtown] 08/1/2014 09:34

It's hard to imagine how the Christmas trading has been anything else than awful when looking at other retailers trading updates.Indeed some would say outdated 1980's style offering at Beales and lack of web sales depth would leave any reasoned investor wondering how they can grow sales and margins in this climate? I can't really see any escape for this company (save the three year banking deal ) and looking at the almost desperate recent sale adverts on probably one the weakest retail website you will ever know, I'm betting all is not well.
Still as always i would be happy to be proved wrong by the figures.

aimho

[jojo_jo] 08/1/2014 09:10

This is still very cheap with a nav over 4x the current m/cap. Even asset stripped it'd be worth over £10m.

Can't lose at this price!


IMPO/DYOR/NAI
Jo

Today's price move implies they had a good Christmas season too. It looks like we're heading back to 20p - for starters.

[simon templar qc] 02/1/2014 20:31

Agree with topvest, Beale hasn't the buying power anything like John Lewis, Debenhams, House of Frazer or even Marks Spencer, its not even got a good website.

I think its moved a little more upmarket in quality of its menswear based on my local Beale however its not got anything like the range of goods like the others mentioned.

Its simply too small an outfit and got quite a lot of debt.

Results are out in February unless they warn but they may updated on trading if trading been poor.

[topvest] 02/1/2014 20:22

Yes, but it has very poor management. I can't remember Beal ever out-performing. If you want an example of how poor a company this is and out of touch with the real digital world, then simply try and navigate their web-site! Play against the structural decline / technological obsolescence trend at your peril in my view. I think this is just a company waiting to be asset stripped.

[jojo_jo] 02/1/2014 13:02

Yes, it looks like Debenhams may have been an exception, with broader product based department stores faring much better.

Beale is nearer to HOF and John Lewis in this respect.

IMPO/DYOR/NAI
Jo

[knitcraft] 02/1/2014 08:50

John Lewis to open 25 new stores after excellent Christmas trading.
Some of the Beales stores could be targets.

House of Fraser reports excellent trading as well.

Lets hope Beales now follow in the same vein.

[simon templar qc] 31/12/2013 11:23

Be careful as Debenhams warned this morning they had a bad Christmas.

[jojo_jo] 31/12/2013 00:39

Yes, every man and his dog has been bleeting about 'structural decline' of the High Street. The High Street has been in decline for seven or eight years, but it seems to have now turned the corner in large population areas. I agree that online retail has killed off rural and semi-rural shops (other than food/essentials.) We'll just have to wait on retailer reports on how Christmas actually panned out. I have been surprised at how busy city shopping centres have stayed right up until today - and there is more to come as more sales kick in on New Year's Day.

Another point worth noting is the recent jump in Freehold values should improve the NAV here further still. I keep a close eye on some sectors of the commercial property market, including retail and leisure, and noticed a pretty sharp mark-up by agents a couple of months ago. Most Landlords would be happy to hold on to the tenant of a large high street property. In Beale's case there is the added benefit that in some cases the Landlord is a major shareholder who is therefore unlikely to shoot himself in the foot imposing punitive rents. Accordingly I believe that Beale will continue to pay sub-market rents and dispose of underperforming leased properties as and when they can.

At a current m/cap of £1.9m vs c.£9m nav the case for a share price recovery looks very compelling.

IMPO/DYOR/NAI
Jo

[topvest] 29/12/2013 20:51

Yes same old story. High street retail is a tough place to be and is in a slow structural decline.