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FCCN French Connection Group Plc

29.55
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
French Connection Group Plc LSE:FCCN London Ordinary Share GB0033764746 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 29.55 29.40 29.70 - 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

French Connection Share Discussion Threads

Showing 4826 to 4844 of 6175 messages
Chat Pages: Latest  199  198  197  196  195  194  193  192  191  190  189  188  Older
DateSubjectAuthorDiscuss
13/10/2015
11:03
Private Punter article:
cockerhoop
10/10/2015
15:17
Interesting comments from Phil Oakley and I guess one logical outcome of his analysis is that no traditional British retailer could ever be worth buying - they all have long lease liabilities!

Which, although it is probably true I am unlikely ever to invest in that kind of stock, and the best thing about FCCN is that it is getting out of traditional retailing, does not seem quite right.

the millipede
09/10/2015
10:00
Lots of buying this morning.
mreasygoing
08/10/2015
15:52
Oh yeah, 35p first stop. Multi bagger in the making. The ladies in my local FCCN are loving the autumn/winter look. No colour blind designers this season :)
mreasygoing
08/10/2015
12:29
A mention in today's results from DFS, screenshot:

We have continued to develop our range of exclusive branded products, including new luxury leather ranges under the Iconica brand, and have started the sale of selected collections of sofas and sofabeds from Sofa Workshop and Dwell through our DFS stores and website. This is an exciting development alongside the growth of our Country Living, House Beautiful and French Connection brands. We have also continued to evolve our marketing approach, complementing our significant investment in advertising with an increased use of PR, direct marketing and sponsored advertising

paulypilot
07/10/2015
11:24
lovely BIG BOWL to 100p and 200p
onjohn
07/10/2015
11:23
come and get it cocokers
onjohn
07/10/2015
11:23
come and get it cocokers
onjohn
07/10/2015
11:23
very nice to see
onjohn
07/10/2015
11:16
Oh yeah, rainmaker, I hope you had a nibble.
mreasygoing
07/10/2015
09:13
jack be nimble
jack be quick

onjohn
07/10/2015
08:24
French Connection (FCCN.L): IMS
Market Cap: £49m; Current Price: 51p

Warmer weather strikes retail; wholesale robust
n Trading the period 1 August to 25 November was impacted by milder weather as L-f-L UK and Europe retail sales were down 5.7% YoY. However gross margin improved +240bps through focussing on full price sales. In the UK, three non-contributing stores were closed.

n Wholesale revenue was +9% YoY and the company reports that the order book for spring 2015 looks strong. On the back of a robust wholesale performance and tight cost control, the management expects to be in line with market expectations.


NORTHLAND CAPITAL PARTNERS VIEW: Despite UK retail impacted by milder weather, the improved wholesale and prudent cost control have helped offset the negative impact and this should be well received.

onjohn
07/10/2015
08:22
I waited a long time to chomp on these
onjohn
07/10/2015
08:14
35p is earliest resistance.
mreasygoing
07/10/2015
07:18
Breaking out of downtrend.
mreasygoing
05/10/2015
20:20
Hi webpax & TMFMayn,

Interesting points, thanks. I think the analysis about totally up lease liabilities is erroneous. The only thing that matters is whether you trade at a profit or loss from a shop. The rent doesn't matter, it's the profit/(loss) that matters.

A shops which makes a good profit might have millions of pounds of rental payments due in future years, but it's meaningless to look at those liabilities in isolation, and ignore all the revenue that you will generate from that shop in future too.

FCCN is on track to make an overall loss of between £4-5m this year, due to the poor H1 (outlook for H2 is better). H2 is profitable historically, and H1 loss-making, a lot of investors miss that point, and sell after the interims, thinking that things are going downhill, then the full year figures end up looking alright.

The shop leases are gradually expiring (they are usually 15 years at inception), and I don't think FCCN has opened any significant new shops since about 2007. So they should be coming near to the end of the leases on loss-making shops. When the lease expires, you just hand it back to the landlord, and walk away, therefore the trading losses disappear.

Over the next 5 years, the retail division losses from FCCN should melt away, as problem shop leases expire. That is the opportunity here. Taking off all rental liabilities from the net current assets is a nonsensical way to analyse the figures. What we should be doing, is to calculate what the trading losses will be over the next 5 years, and deduct that from the big profits made by wholesale & licensing.

What we should then see is a highly profitable business gradually emerge over the next few years, providing they also cut overheads as the retailing side of things shrinks.

I annnotated this chart from the last full year results.
Screenshot:

So 2015/16 figures are likely to be very similar to the 2014 column. If you eliminate the retail losses, which will happen automatically as the leases expire, then you are left with a wholesale business making £11.7m profit, licensing making £6.1m profit, less overheads of £11.3 - which could perhaps be cut by say half, if the retail division is eliminated altogether, so reduced to £5.8m overheads. That would give a potential future overall level of profits of £12m p.a.

I think the market would value that at say £100-200m. That's a share price of 104-208p, and remember this assumes no improvement in trading - it simply assumes that the retailing division is closed down.

The upside case from there, is that the retailing side improves somewhat, and only some shops have to be closed, leaving a smaller, but profitable retail side.

Hence we could be looking at a share which has the potential to 5-10 bag over the next few years from the current level, based purely on problem shop leases expiring.

I reckon the problem leases could actually be concentrated into just a few shops - especially the Oxford Street store, which has a rent of over £3m p.a. That shop alone must be absolutely haemorraging cash. Yet it's a prime unit, opposite Selfridges. So who knows, we could get an RNS any time saying they've done a deal to exit the lease, maybe even for a premium, who knows? Sites in Oxford Street are highly prized.

When Bond Street crossrail opens, the FCCN site on Oxford Street will be absolutely prime location, so that's another reason to believe it could end up being an asset, not a liability.

Bottom line is this - FCCN is absolutely not going bust - there is enough balance sheet strength for it to survive whilst the problem leases gradually expire, and hence losses reduce.
It can weather this storm, and has a big tailwind of leases expiring - the average is only about 5 years remember, so this is a ring-fenced problem, and the brand is still very powerful - evidenced by the continued good licensing revenues, and strong wholesale profits. DFS furniture now has a range of FCCN sofas on its website:

This is evidence that the brand is not at all washed up, it's still an aspirational brand in consumer eyes & minds. Just because they can't make standalone stores work, doesn't mean the brand itself is tarnished. It's just that the product is too expensive to retail profitably from standalone sites, as is the case for many medium to upper brands. The High Street rents + rates are too high now for this type of product, it can't be sold in enough quantity on the High Street. But it works well in independent stores, and Dept Stores - hence why the wholesale division is decently profitable.

It's a pity they can't just do a pre-pack Administration with the retailing division.

I've been buying more today, as the market doesn't really understand this stock, and it's wildly under-priced in my view.

Regards, Paul.

paulypilot
02/10/2015
06:34
PP - you say there is a very strong overall net current assets position. However there is an interesting article from Phil Oakley of Sharescope which says Net current asset value is probably meaningless as there is £100m+ of hidden debt in the form of the outstanding leases.

He says: "Take £100m away from the current NCAV of £36.4m and you are left with a big negative number. It seems that French Connection is unlikely to be a Benjamin Graham type bargain share".



p.s. I am long here and have topped up at these levels but I think Marks needs to go before we see any real progress.

webpax
01/10/2015
08:42
Wonder what's going through Marks' mind? If it was me then take it private using cash then flog on to highest bidder. But I'm not Marks
zoolook
01/10/2015
03:05
Yeah, I'll nibble and won't be sweating when the share price goes into the teens.
mreasygoing
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