4less recovering but has anyone noticed?

WARNING Please note I have not verified the information contained in this thread so PLEASE DO YOUR OWN RESEARCH to VERIFY






4Less Group.


Mkt Cap circa £1.9m

Cash as at 30 Sep £1.2m

Lost £476,000 first half.

Cash flow positive, sometimes have circa £7m in cash

Second half will NOT lose money trading

other than a one off £190,000 re-organization cost.


But.....they have gone back to the core activities they know so well & have been previously profitable.


Basically they are saying they tried something new, it didn't work & they have gone back to core activities which always have worked, except, they have had a successful review of costs.


This is the important bit:

"Despite this, the core activities have continued to generate
significant gross profits.



So guys you can buy these for 25p, you are paying a market cap of pro-rata £1.9m, they have net cash & they are not going to lose money in the second half & indeed they should be profitable as from here onwards, so lets assume they only have £600,000 cash now, you are paying £1.3m for a business that will turnover about £330m & indeed could easily make £1m, £2m in the coming year or two...& has excellent cash flow.


Reminds me of Cobra at 22p in terms of getting oversold & yes I did post on that on www.finfoex.com at the time (now circa 60p)


The trading statement has been seen as a profit warning when in fact if you take the time to check the interim statement, it confirms they won't lose money in the second half (trading wise)......a clear opportunity especially with the last few days on Wall St & little interest, these will be 40p-50p perhaps in 6 months time.






The trading statement issued today-

Quote:

4Less Group plc (The)
19 April 2005

The 4Less Group Plc ('The Company')

Trading statement

19 April 2005


As advised in the trading statement and interim results issued by the Company in
December 2004, the Company has undertaken successfully a full review of its
activities, future strategy and ongoing cost structure.


The Company has focussed on its core competencies of Retail and Corporate
foreign currency exchange, and arranging overseas mortgages, to ensure a solid
foundation from which the Company can develop its profitability.


Management changes


Charles McLeod has assumed the role of non-executive director.


Activity changes


The activities of FLG Corporate Services and the corporate element of FLG
Insurance Brokers have failed to generate expected levels of revenue and
profitability and these divisions have been suspended. The Company continues to
provide insurance products to overseas home owners.



www.Car-Finance4Less.com

Limited, the subsidiary providing car finance broking
services has failed to make any returns for the company and has been sold to
Charles McLeod for a nominal sum.


The Company has also streamlined its UK trading floor operations and its Spanish
based activities in Marbella.


These actions and the cessation of non-core activities have resulted in
significant cost reductions for the Company. After a difficult period
management is now in a position to give its full attention to the continuing
profitability of the core currencies and overseas property mortgage businesses.


Current trading


Trading during the first three months of 2005 was difficult throughout the
Company's markets. Despite this, the core activities have continued to generate
significant gross profits. The effect of the reorganisation and reduction in
cost base is that the Company is now able to trade profitably at lower levels of
activity.


As part of the review, the Company has introduced new accounting and internal
controls including back office and compliance systems, and this will remain a
key area of focus for management.


The Company has also substantially completed three major marketing initiatives
with the assistance of external consultants to re-examine its methods of
developing its profile in the marketplace.


Outlook


The directors still anticipate that the Company will make a trading loss for the
full year in line with its interim statement, before the costs associated with
the reorganisation. The directors estimate that the reorganisation costs which
include the exceptional costs of redundancies are approximately £190,000.
Following this reorganisation, the Company is a simpler and more focussed
financial services business.


Results


It is anticipated that the results for the year ended 31 March 2005 will be
released in July.



In the interim statement they refer too, it says:

Quote:

Outlook



On the basis of these actions and a continued focus on the core strengths of the
business, it is expected that the Group will be cash flow positive and
profitable from January 2005. Whilst the directors anticipate the Group making
a loss before tax for the full year to 31 March 2005, they do not anticipate it
exceeding the loss before tax for the first six months to 30 September 2004.

Eric Peacock