ADVFN Logo

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for charts Register for streaming realtime charts, analysis tools, and prices.

CHUK Choicesuk

0.50
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Choicesuk LSE:CHUK London Ordinary Share GB0030842495 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.50 - 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Choicesuk Share Discussion Threads

Showing 376 to 397 of 625 messages
Chat Pages: 25  24  23  22  21  20  19  18  17  16  15  14  Older
DateSubjectAuthorDiscuss
04/4/2007
10:39
"goonertone - 4 Apr'07 - 09:55 - 373 of 374: If you don't like my comments then filter me, point out the errors in my financial assumptions or ignore me but dont lectur me".

Not my style to lecture people on how to conduct themselves - everyone is entitled to do as they wish. However it was you who interjected on the chairmanship dialogue, to comment on the content of other peoples posts and then concluding with the remark of "not caring what others think". Now you are telling me how to conduct myself !

Ends.

masurenguy
04/4/2007
09:48
Totally agree GT. Valid point particularly in this market at this moment in time.
jtcod
04/4/2007
09:28
JTC

Fair and valid point re debt which I hadn't looked at overly closely as I tend to focus on profit/cashflow going forwards. However i think your point re predator would depend on what there reason for buying was IMHO. If they are just private equity trying to turn round the business then yes, but if they are buying a business as a bolt on to their business their valuation criteria would be different.

Someone like game could buy this up and with minimum investment transform the non overlapping stores over to there format far cheaper and quicker than setting up a 100 to 150 of their own branches. They could then spin off the distribution business to woolies, AMU or the like or private equity for £15 to £20 million unencumbered by the stores.

Vice versa someone in the distribution busines could come in and integrate the local and direct to home businesses creating further synergies and cross selling. Close the remaining stores and spin them off to a private equity vehicle for £5 to £10 million.

However I think that before the above happens they need to clear out the last remaining loss making stores as this would appear to have kept potential purchasers of the stores away in the past.

GT

goonertone
04/4/2007
08:55
Masureguy

I have got no particular axe to grind with you so will keep this brief. You have your ideas as to the importance of non execs and chairman I have mine. The introduction of non execs "in my opinion" has done nothing to safeguard shareholders and is just a load of city chums taking up a number of part time positions to line their pockets at the expense of the shareholders.

I have in the past and will continue to post my thoughts and comments on this board. I use it as much for my records as for anybody else to read. I post my comments on the figures and the content of the report, they are my view and if they stimulate a debate then so much the better. I usually end up just chewing things over with JTC on this board anyway.

Any other views expressed I will read and assess and debate if I feel they are valid points. All views are welcome and if somebody has a different viewpoint on the fundamentals or on the continuing developments of the industry then I am happy to listen, though I may not agree.

If you don't like my comments then filter me, point out the errors in my financial assumptions or ignore me but dont lectur me.

GT

goonertone
04/4/2007
08:33
Sorry guys O/T

Edmund
Agree on political risk re MXP. I think the price rise has only just started though. We should have news on ZM developement application, East Alibek Deep completion and Kuzbak CPR all in the next 6-8 weeks hopefully.

I have high hopes for Kuzbak as you know. Still needs to be proved up though. Seismic can be wrong sometimes.

jtcod
04/4/2007
07:55
Agree with your post bar the last para GT.

Think you probably meant 52 week ended 28th July '2007' btw?

I don't think the market cap is quite as absurd at the moment as perhaps you do. I try to work on 'How would a predator value it?' and because it includes £11.5m of debt in the price at the turn, 45.5p per share really values CHUK at £20m (110p per share including debt at the turn). i.e. if someone paid 100p, net of debt we would get about 42p per share.

I would agree that debt should reduce very quickly and is probably down to £10m already but the price will reflect value only as debt reduces. If you're cashflow positive, I look at it as 'buying share price growth'. As long as the company have good funding arrangements in place for the duration, it's an easy way to drive the price.

JT

jtcod
04/4/2007
07:13
gt, I shall be watching for the next news as if things turn out well this could become a decent investment; though I share CR's concerns for now.

I'd very much rather wait for further news, though. If it gets good, I expect there will be room on the bandwagon...

o/t: yes, JT, in MXP, though a bit underweight initially (but now 5% of portfolio after 60% rise). Thanks very much for the timely analysis of it! Your switch from IEC looks like it cost you nothing in the end, and probably more potential in MXP at this point. IEC funding is good if not particularly cheap; and I reckon we need to wait till 2010 or so before the PE drops under 10, so political risk is a worry over a significant time span.

edmundshaw
03/4/2007
23:50
Can't see what all the fuss is about myself. Nothing in these that we didn't already know

The 28/24 split is to keep easter and christmas in seperate periods but also to get the whole of the christmas/new year period and the whole of the easter period into each "half".

I try not to pay attention to non executive directors/chairman as in my opinion most of them are only there to keep the city watchdogs happy and as figureheads. Michael Riding has been at CHUK for three years so its a bit late to be ringing the alarm bells, whatever your motives. Anthony Skitt was and still is the decision maker at CHUK.

negative points

loss in first part of year
writedowns again
drop in turnover at local
lack of increase in net assets
difficult retail enviroment for dvd's & cd's

positive points

have identified all non profit making stores and are working through getting rid of them. This should leave stores contributing to rather the subtracting from profits.

profitable prior to exceptionals for 28 week period

more emphasis on games

drop in local income due to decline in rental to be offset by new Welcome Break and One Stop outlets

increase in sell through % should allow easier stock management and allow for a reduction in stock held v turnover and also reduce the need for future writedowns

fulfilment business increased by 129% due in large part to Andromeda that they brought for peanuts

sector is ripe for consolidation. Mgmt have shown that if need be they can act fast to secure acquisitions at good priices which are both groth and earnings enhancing

they didn't even bother pointing out that the 6.5% share of playstation 3 launch will add nearly £5 million pounds to turnover for one weeks sales, a one off but a big one off.

full savings from centralisation will not be felt until Aug 07

company now cashflow positive

margings stable

major cap ex complete


I don't expect anyone to jump up and down in celebration and go and put all their money into CHUK. However in comparison to woolies and HMV they have a mgmt who have ssen the decline in their original business model and changed it. 40% of tunover is now games as rental continues to decline 21.7%.
Whilst woolies and HMV stand like blinded rabbits in a cars headlamps watching their sales decline Choices set out to change their sales and product mix and find new channels to exploit. The change has taken a while but is now coming to fruition.

I fully expect them to make over £2.5 million before tax for the 52 weeks ended 28th July 2006. With the fast growing direct to home accounting for a larger part of the business going forward a valuation of £8.4 million appears positively absurd.

Not caring what others think just my opinion.

GT

goonertone
03/4/2007
21:09
Just closed our Choices in our town. Profitable but I understand that the rent was going to be increased and the branch would not be profiable.
rogerbridge
03/4/2007
18:42
"Like CR, I'm not impressed by the 28/36 week comparisons either - it just muddies the water too much for my liking."

The change in accounting period was reported by the company back in June 2006.

IMO it was pleasing to see that in the most recent period trading is much improved from the same period last year:-

"Sales for the 28 weeks ended 10 February 2007, which will become the
comparable period for next year's interim results following the change of
accounting date, were up 10.4per cent to £86.1m (2006 : £78m) on which profit,
before exceptional items and interest, was £1.2 m (2006 : £0.8 m)."

The beauty of investing is that we all have our own opinions and should take full responsibility for our own investment decisions. In my experience though I have found it far more profitable to research companies I am interested in rather than waste valuable time commenting on companies that I'm not.

Personally I am happy to hold and may even add on any further weakness in the share price Results pretty much as expected IMO (if not a little better).

Cheers
Michael.

michaelmouse
03/4/2007
18:19
Thanks Mas.

Lads, the change of end of year was flagged up some time ago by the management. They haven't just made it up. I agree it does look odd but I believe they wished to balance the trading year, rather than having both Easter and Christmas coming in one half.

Edmund
Yes still holding MXP. Did you buy in the end?

As I said earlier, I don't blame any investor for not investing in CHUK right now. 85 % gearing is too much for an entry point imo and as you say, right now on paper this is not £1 notes for 50p. I think it is worth 63p and I'm already in, so I am not going to sell out cheap when I believe the debt is managable on a x serviceability assessment. Can't say it's one I'll be particularly proud of though, even if it does come good.

Regards
JT

jtcod
03/4/2007
18:09
Sporticus
If you don't think that line is not offensive, try using it with a complete stranger next time you are down the pub.;-

However, if you would like to justify your point, I am happy to discuss it further.

jtcod
03/4/2007
17:15
Hmmmmm. I wonder if JT Cod is having a blonde moment? I suspect so!
No offence intended ;-)

sporticus
03/4/2007
16:42
JTC - have modified part of the prior post with a link to reduce the clutter.

Like CR, I'm not impressed by the 28/36 week comparisons either - it just muddies the water too much for my liking.

Fortunately I was lucky enough not to be caught out on Homebuy. I had previously been invested, had taken profits earlier in the year and had subsequently kicked myself for exiting too early. I was on the brink of buying back in when the suspension was announced - a very fortuitous escape !

This is not just a cross directorship link - its a cross Chairmanship link !
Too close for comfort as far as I am concerned.

masurenguy
03/4/2007
16:38
and that chart screams hidden nasties too imo.

CR

cockneyrebel
03/4/2007
16:37
Looked these over today but not for me thanks. Got caught by Homebuy and still have the scars.

Has anyone here got an explanation for this 28 weeks and 36 weeks stuff in the results and no 26 weeks/52weeks ?

I've never seen a set of results like this. Not like they have just started as a co and are having an 18 month period or whatever. It makes me suspicious when companies invent their own periods - it usually means it puts a gloss on the numbers imo. If we'd had these alongside 26 week results I'd have been a bit happier.

I'm grateful to Masurenguy for highlighting Riding being involved here - that's a big no, no to me. He was the former Lloyds guy that couldn't see Homebuy going bust and bought a wadge of shares just a week or two before. In that case a sceptic might say he is incompetent or the buy was a crooked ploy to dupe the banks into lending them more money or fool shareholders.

All in all a big red flag here imo.

CR

cockneyrebel
03/4/2007
16:23
Mas, JT,

Also on my watchlist, where it remains. Thanks for the commens from both.

However, not a 50p that looks worth a quid at the moment. I shall wait for news on cashflow, debt and earnings progress before I look closer...

Let's hope AMU more than makes up for it! :-)

BTW, you still in MXP JT?

edmundshaw
03/4/2007
15:41
Found the link.

Mas
The gearing for Homebuy at the time was 137 % times assets and that was 'with' Intangibles. Without intangibles it was 238%!!!!

You sound like an intelligent investor, so you must have known the risks.

Please respect that this is the CHUK thread and whilst Homebuy had a cross directorship link, I would at least appreciate it if you could post 'links' where possible when making your point, rather than plastering another companies details over our thread.

Cheers
JT

jtcod
03/4/2007
15:03
JTCod - 3 Apr'07 - 14:15 - 354 of 354: Masurenguy: Michael Riding is on board because of his background, high level contacts and reputation with LloydsTSB Plc. This (hopefully) should give us added protection. In times of high debt levels, the business plan may be sound but it is only as sound as the relationship with their bankers. Right now that's very important imo. I believe that Homebuy had triple digit gearing and an awful balance sheet (Significant intangibles I think). CHUK has a better balance sheet I believe, though it's not great. I share your bewilderment as to why Mr Riding would have bought shares at such a time though.
...............................................................................

JT - well just review the following !

...............................................................................

Chairmans summary on 13/7/06 on the Homebuy year end. Note the finance comments

...............................................................................

Four days later, on 17/7/06 he and his Deputy invest £289K in Homebuy shares.


Whilst everyone is responsible for their own investment decisions, these year end comments, followed by further share purchases, created an impression that everything was progressing well.
...............................................................................

Just 24 days later, out of the blue, the Board requested a share suspension. This was The Times comment at that stage:

The Times August 11, 2006
Homebuy mystifies shareholders by requesting a halt in trading
By Nick Hasell

CONFUSION reigned at Homebuy Group, as the AIM-listed consumer finance group asked for its shares to be suspended amid refinancing talks only weeks after directors bought stock for £289,000. The prelims last month from the profitable Walsall-based company - which hires out electrical equipment to sub-prime customers on a rent-to-buy basis - were regarded as upbeat, a view underpinned by the accompanying purchase of 125,000 shares at 231½p by non-executives. So investors were perplexed yesterday when trading in the shares was halted at 207½p pending the outcome of discussions concerning further funding arrangements.
...............................................................................

Just 5 weeks later they filed for administration

...............................................................................

JT - this company has been on my Watchlist for a while. Part of the evaluation is not only trading performance & forward prospects but also gearing, cashflow & management.

You say the new Chairman is on board because of his connections and reputation. Well those factors did not stop Homebuy from going into liquidation. He had been Chairman for at least 10 months before the receivers were called in, The fact of the matter is that despite "his background, high level contacts and reputation with LloydsTSB Plc" the incumbent banks would not provide any further funds and no alternative banks would either, resulting in suspension, administration and liquidation.

Since this all happened within a few weeks of a very positive year end statement and further personal share purchases, it should perhaps raise questions either about judgement or perhaps the understanding of the financial predicament that the company was facing. I find it hard to believe that its financial position could have changed so dramatically in the 24 days between 13/7 and 10/8. This wasn't a manufacturing company that suddenly and unexpectedly lost a big order or large customer !

This creates a 'credibility gap' for me and I'm not inclined to just airily dismiss with 'bewilderment' what happened there. Credibility is always a key factor and now that the founder is also stepping down from the daily running of the business, this becomes even more important. If we add the increased debt and the current gearing that has just been reported, then the sum total of all of these factors inclines me to back away from this altogether.

I know that you are heavily invested here so I wish you good luck.

masurenguy
03/4/2007
13:15
Interims Comment:

Debt:
I had expected a drop of maybe £1-2m but debt has increased again and whilst at the same time the balance sheet assets have fallen further. I make it about £11.5m debt at the turn, though I would expect debt levels of nearer £10m now, (following the PS3 launch late March.) If I am right we would have gearing of around 75 % about now. Which I consider risky and in need of reduction below 50 % as soon as can be achieved.

Masurenguy: Michael Riding is on board because of his background, high level contacts and reputation with LloydsTSB Plc. This (hopefully) should give us added protection. In times of high debt levels, the business plan may be sound but it is only as sound as the relationship with their bankers. Right now that's very important imo.

I believe that Homebuy had triple digit gearing and an awful balance sheet (Significant intangibles I think). If I am wrong I apologize but it was a couple of years ago when I last looked at them. If I am right, it wouldn't have allowed their bankers very much leeway. CHUK has a better balance sheet I believe, though it's not great. I share your bewilderment as to why Mr Riding would have bought shares at such a time though.

Cash Flow:
Negative for H1 but pleased to hear it is now positive. Given the right scenario, cashflow can be very good in this type of business. For instance, positive cashflow from operating activities averaged £9.4m pa over the 4 year period 2002-2005. I think it is not beyond the bounds of possibility that debt could be reduced to sub £6m by this time next year.

Reduction of Overheads:
This was good news also. Improved from £3m pa to £6.9m pa in just 7 months. Teather & Greewood the in house broker had £3m profit net of interest forecast for next year, prior to this interim announcement. That equated to EPS of 11.7p. I would assume they had some knowledge of additional overhead reductions but I doubt this incorporated the full £6.9m savings. I do not have their calculations but I would expect interest costs of £750,000 next year would have been allowed for.

Margins:
Good news again. "Stabilised margins"

Sales Mix:
40 % games. In a games market that has just seen 2 of the 3 major players launch next-gen machines, this is good progress and an important move imo. The PS3 launch has now been heralded as a success in the worlds 3 main consumer continents, which bodes well for their 'BlueRay' format and it's future sales curve. I am impressed also by the 6.5 % market share of the PS3 launch. Not bad for a new player. Well done Choices.

Value:
Right now, until the debt starts falling back below £7m I'd say that CHUK is worth about 63p. Until we know what the extra £3.4m overhead reduction can deliver, I am discounting it completely and going with the T&G £3m+ £0.75m interest add back. Calculation: 7/2008 Forward earnings assumption of £3.75m profit before interest, less 28 % tax x 8.5 –£11.5m Debt = £11.45m divided by 18.1m shares = 63p

Feb 2008 alternative assumption: Based upon increased profit forecast of £4.75m before interest for July 2008, reflecting increased overhead savings and debt reduction (assuming £7m debt as of Feb 2008) = 122p

Obviously, tax levels will be pretty much zero for a while but I prefer to allow for full taxation in the valuation calcs.

Final Thoughts:
I think the management is doing all the right things in what continues to be a tough market. I also think 'cashflow from operating activities' should really kick in over the next 12 months due to the significant cost overhead reduction and low capex levels going forward. Offloading the other 29 marginal and unprofitable sites should accelerate cashflow further.

The debt ratio has deteriorated due to the double wammy of higher debt and lower assets. Frankly, I do not blame anyone not prepared to invest in shares with an 85 % gearing and the prudent investor would not enter this stock prior seeing positive news on debt reduction imo.

I'm already in and with a sizeable chunk of shares, so I don't have a lot of choice anyway unless I wished to trash the price. Debt servicing on the 'lower earnings assumption' (above) should be approx. 5x imo. I think that is manageable and so I'm happy to hold anyway.

As ever all IMHO and DYOR
JT

jtcod
03/4/2007
07:57
It looks like the same Michael Riding to me although there is no reference to his prior Chairmanship of Homebuy in his potted CV on the Choices website !

...............................................................................
Homebuy Directorate Change
RNS Number:5752F
Homebuy Group PLC
24 November 2004

Appointment of Non-Executive Chairman
Michael Riding has been appointed as non-executive Chairman of the Homebuy Group PLC ("Homebuy", the "Company"). Michael comes with over 25 years of experience in senior management in commercial banking and financial services in Britain, the USA and Asia. In particular, since 1984 he has held a succession of senior management posts at Lloyds Bank (Lloyds TSB from 1996), most recently as Managing Director of the Corporate and Commercial Banking division of the bank. In this capacity, he was responsible for assets of over #45 billion, and in excess of 10% of Lloyds TSB's profits. In accordance with the AIM rules, we provide the following background information on Michael Riding

Full Name:Frederick Michael Peter Riding
Age: 61
Current directorships:
* Home Entertainment Corporation Plc
* North Bristol NHS Trust
* CGE Power Ltd

...............................................................................
From Choices UK website

Michael Riding, Non-Executive Deputy Chairman
Michael is a graduate of Leeds University, a Fellow of the Chartered Institute of Bankers and a Fellow of the Royal Society of Arts. He retired as Managing Director, Corporate Banking, Lloyds TSB plc in September 2004, which included the Bank's middle market commercial, major corporate and institutional banking businesses. He was Chairman of the Bank's venture capital company, Lloyds TSB Development Capital Limited, until December 2003. Michael joined Lloyds Bank in 1983 from Chemical Bank, New York, after 10 years in International Commercial Banking; his appointment as General Manager of the Bank's Asian operations swiftly followed. Senior roles within the retail bank preceded his appointment as Head of UK Commercial Banking in 1991. He became Managing Director, Corporate and Commercial Banking for Lloyds TSB in January 2000.

masurenguy
03/4/2007
07:22
Is Michael Riding, the new NX Chairman, the same Michael Riding who was NX Chairman of Homebuy, whose shares were suddenly and unexpectantly suspended at 207p last September prior to their subsequent administration and liquidation ?
masurenguy
Chat Pages: 25  24  23  22  21  20  19  18  17  16  15  14  Older

Your Recent History

Delayed Upgrade Clock