Scs Share Discussion Threads

[karmastuartra] 07/3/2017 23:21

Oh I do apologise, scs are the best!

[karmastuartra] 07/3/2017 08:06

Apologies to all.

[simso] 07/3/2017 07:12

Karmasutra, i am asking you politely, please don't write your posts on this board.

[karmastuartra] 06/3/2017 18:18

Excuse me young man but I believe my talents are appreciated here.

[davidosh] 06/3/2017 15:48

Karma....I am sure your imagination and talents are wasted on this board. Have you tried any others to see if you are appreciated more as I think you are wasting your time here ??

[karmastuartra] 06/3/2017 15:06

I would like to give her one!

[karmastuartra] 03/3/2017 08:19

Gimme five!

[karmastuartra] 02/3/2017 15:05

I am selling my scs sofa if anyone is interested? Comes with a few stains and a couple of pairs of knickers stuffed down the back. £50 ono

[karmastuartra] 27/2/2017 21:47

On a more serious note,my scs sofa is very comfortable and great to make out on.

[karmastuartra] 27/2/2017 16:17

I think they belong to miss riley.

[karmastuartra] 27/2/2017 11:56

I will just add i did find a pair of knickers down the side of my scs sofa this morning.

[karmastuartra] 27/2/2017 11:54

My apologies to all on this thread.

[cwa1] 27/2/2017 08:33

Morning karmastuartra

Any chance we could focus on the business aspects of SCS please and keep such comments for other venues? Thanks.

[karmastuartra] 27/2/2017 08:26

Would love to jiggy jiggy rachel riley on that scs sofas and leave stains on it!

[woozle1] 26/2/2017 11:36

Buy backs are the best option: it confirms that management thinks the shares are cheap (what better use of excess cash than buying their own business at semi-distressed valuation) and it provides an exit for Sun Capital, though they may prefer a higher price, and help reduce the fears around the over hang. As pointed out above, the current dividend is already special.

[karmastuartra] 21/2/2017 17:46

Who's the hot chicken in the adverts,
Would love to bang her on one of the scs sofas!

[simso] 20/2/2017 12:43

Good points Salpara. They should have £28-£30m on the balance sheet by year end, and that date is a low point in the monthly cash flow cycle, following the 53rd week last year. They may feel that an amount of (say) £10m should be ring fenced as its customer deposits for furniture not yet received. They do not legally have to ring fence it though. I think they also like to show a good cash balance to the credit insurers, after the 2008 problems.
What to do with the excess cash? I like your idea of buy backs, with a P/e of 7 and a prospective EV/Ebitda of 2 it makes sense financially. However, given the illiquidity - exacerbated by Sun holding such a big stake - would it make liquidity even worse, once the trasaction were complete. I think on balance your right though, buy back makes good financial sense. It is unusual to talk about A special div when the normal yield is aleady 9%!

[salpara111] 19/2/2017 12:34

Given the cash requirements of the business and the balance sheet position I would support a share buyback.
The stock is pretty illiquid so I would imagine that even buying back £1M would have a dramatic effect on the share price
The only reason I continue to hold is as mentioned above, the share price is priced for a dramatic reduction in profits and while it is clear that conditions will be more difficult for the next year or two, I don't see anything that would suggest a major economic crash is on its way.

[woozle1] 15/2/2017 13:01

My number came from the cashflow statement. By the way, I've started buying and this looks like a stunning investment opportunity. I know that DFS is bigger but by positioning themselves nearer DFS they piggy back DFS's ad spend. The current margin does look low but I'd see this as an opportunity. It looks its priced to go bust and I don't that will happen.

[aim11] 15/2/2017 12:06

I think if you're comparing Scs to dfs you really have to account for the much lower margin and profitability at Scs, and the much lower market share. Scs might be net cash but it's overall a riskier business compared to dfs

[simso] 15/2/2017 09:51

Hi Woozie, interesting questions about ScS, and I always appreciate being made to think about my Investment.
In response to your point about whether net cash is really net cash, I checked the Prelims Statement and it headlines with:
"Strong balance sheet with cash of £22.4m (2015: £21.1m) and no debt". Also, an unusual thing happened to them regarding the 53rd week, and in that final week 53 they paid the monthly payroll and suppliers runs. Had it been a normal 52 week year (as most are!), the cash would have been £9m higher. Look at another way, it does mean that the £22.4m cash was at a low point in the monthly cycle.

Further down the P&L is says Finance Costs were £217k and £86k of Finance Income. I cant see where your £0.7m comes from? I suspect that they will earn Jack S on the cash balances, but paying non utilisation fees etc on the Facility.

[woozle1] 14/2/2017 17:47

Are you sure that net cash is really net? I see they have 0.7m interest charge, which would imply that they have borrowings between £10-15m (i.e interest rate of 5%). And they also mentioned that the £12m RFC was renegotiated last year. Woolworth's used to report net cash at the reporting period but the interest charge told you there was a big working capital facility, which is what eventually sunk. That and the high cost leases.

At y/e, I netted off the current liabilities from the current assets and came to a figure nearer £5m. That's better than DFS which has debt on 1x EBITDA and proposing to pay a special dividend, which I think is a mistake.

I'm thinking that the answer maybe more prosaic: nearly listed sofas have gone bust!!

All that said, it makes no sense for the listed carpet businesses like Headlam, Carpetright and Victoria Carpets to be doing so well and the sofa companies not. Don't people generally buy sofas and carpets at the same time. I know that I have!

Any thoughts?

[simso] 14/2/2017 17:05

I think to be fair it was only a tiny percentage of the Director's holdings, so I largely ignored it. Scs have only just updated us on trading, so it's nothing sinister about him knowing more about trade than we do.
The low P/e is only part of the valuation story. Usually such low P/E ratios are associated with weak Balance Sheets, or massive Pension Deficits like Trinity Mirror and Norcross. However, I would expect ScS to finish this year with c£28m net cash...around 40% of the entire market cap! The EV/ebitda ratio is close to 2!!