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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Choicesuk | CHUK | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 0.00 | 0.00% | 0.50 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 0.50 | 0.50 |
| Top Posts |
|---|
Posted at 21/8/2007 09:27 by cyberpost Richard Ratner, retail analyst at Seymour Pierce, said he wasn't totallysurprised by ChoicesUK's demise although he had thought the dismal summer weather would have assisted the business. "We wrote on one occasion that ChoicesUK's mnemonic (CHUK) gave a good indication of what we would do with the shares, we had rated it as a 'sell' but now alas it is too late," he said. |
Posted at 03/5/2007 15:45 by bletherer Just to confirm how tough the sector is at the moment, Blockbuster posted a loss yesterday and is down about 15% since then (BBI on the NYSE). CHUK is now in the sort of position where it's a pure gambling stock IMO. You could double your money or you could lose the lot. I think I'll just watch from the sidelines, but best of luck to those who want to try their luck... |
Posted at 07/4/2007 12:15 by masurenguy "rajauk - 5 Apr'07 - 21:12 - 385 of 395: I don't hold these JTCod ....... I just thought it may be of interest as the it concerned CHUK" Interesting to note that Peter Gyllenhammar has been building a stake in CHUK too and now holds around 20% of the shares. |
Posted at 06/4/2007 09:39 by masurenguy michaelmouse - 5 Apr'07 - 22:11 - 388 of 390: If anybody would like a CHUKle (get it?) go to the CPL thread where Masurenguy has removed my post. His reply was "Michaelmouse-irrele.................... This is not the forum for posts about CPL. Your posts are also irrelevant to credibility issues relating to company chairmen since even according to you, the new chairman of CPL has not previously been chairman of an insolvent company. I have addressed your posts on the CPL thread - this is the CHUK thread ! |
Posted at 04/4/2007 00:50 by goonertone 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 |
Posted at 03/4/2007 14:15 by jtcod 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 |
Posted at 31/3/2007 16:24 by jtcod No one is claiming that the figures for CHUK will be blinding Stegrego. They won't be. The difference here is that Woolies are valued on a forward P/E of 24 and HMV are on a forward PE of 12.Teather & Greenwood the house broker is forecasting 11.7p for next year, a forward PE of 4. CHUK is a pure 'Value investment' imo. On top of that, the company hinted that they were considering offloading the Retail division (in the trading update earlier this year.) If so, that would leave the 2 'non-retail' divisions 'Choices Local' (The distribution business servicing 10,000 outlets) & Choices Direct' (The internet business). Both are growing strongly. CHUK would effectively become a distribution business overnight and I believe the market would have to re-rate the share. Obviously the sale may not happen but even if it doesn't, I feel they are still significantly undervalued by the market. Unlike Woolies and HMV, CHUK have already completed their rationalisation, saving overheads of £3.5m pa. All IMHO and DYOR JT |
Posted at 29/3/2007 22:11 by jtcod steveSola, GNG and CHNS yes but I worry far more about my oil stocks than CHUK. There is zero pricing power for oil companies. Oil could drop 20 % in a week. Now that is a real concern to me. I'm pretty comfortable with CHUK at the moment. |
Posted at 02/3/2007 14:36 by jtcod Well, here's my take on things:On 23/1/2007 we received a trading statement covering 36 weeks that said ............................................................ Overall the Company had a record breaking Christmas, with total sales during the eight weeks ended 13 January 2007 increasing by 15 per cent year on year. The Company made a pre-tax profit over this period compared with a loss for the same period last year, reflecting a strong performance by its Direct to Home and Local businesses. However, trading for the ChoicesUK stores remained difficult, particularly during the first 8 weeks of the interim period which was adversely affected by the audience lost during the World Cup. Despite this and the disappointing retail trading environment, the Company expects to report a materially reduced pre-tax loss for the interim period. Management is considering a strategic plan to ensure the Retail division, ChoicesUK stores, will not detract from the value and success of other Company activities. ChoicesUK Local, remains profitable and continues to expand its customer base. For example, it recently won a fulfilment contract with Welcome Break for over 60 motorway service stations, and is actively developing other opportunities. Following the successful integration of its games fulfilment business ChoicesUK Direct the mail order and internet division returned to profitability and continues to show substantial growth and opportunity. Cost reductions continue to be a top priority for management and, as a result of further restructuring, management plans to save approximately #500,000 per annum, in addition to the #3 million per annum savings achieved to date. Cash generation continues to be a key focus. Full interim results will be announced on Tuesday, 20 March 2007. ............................................................ What interests me is the 'strategic plan'. It certainly sounded to me like they had an option on the table. 3 weeks later, we saw a post: Sporticus - 15 Feb'07 - 19:29 - 309 of 318 Sad day for chuk employees. Polish friend in the packing area has told me of more than 50 job losses tonight. End 3 days later still Sporticus said it was 70 job losses and I have no reason to doubt his information. This would certainly make sense if we were offloading 200 retail outlets. That could well be the undesired staffing requirement that would be covered by the new owners. I think the saving of minus 70 employees in wages and employers Tax & NI contributions could well be enough to put the retail unit back in profit for the new owners, (if indeed that is the plan.) 70 staff must have been costing approx. £1.5m pa when you add in employers tax and NI contributions as well. If we could offload the freehold property shown on the balance sheet on a 'sale and lease back' arrangement, that could reduce borrowings by a further £1.5m and then sell the retail for perhaps £1 (and this months launch of the PS3 must at least help garner interest. We have already closed the bad shops also), I think that would leave the group with low borrowings by July 2007 (£8.74m net debt 3/6/2006) and a solid group going forward. 6/2006 Results: ChoicesUK Local £1.8m profit ChoicesUK Direct £1.7m profit despite many delays. Finance costs: (£0.524m) Net profit before tax: £2.976m Tax at 30 %: (£0.89m) Net Profit: £2.08m EPS: 11.5p Now, given the comments within the trading update, it is clear that these 2 divisions continue to grow profitably. In fact they sound almost vibrant.;-) But I notice the house broker Teather & Greenwood are forecasting EPS 11.7p for next year, which seems pretty cautious to me given the above. I think this would allow them to upgrade forecasts as next year progresses. To their credit (imo) they have at least issued a 'buy' rating. Let's face it, if the management eschew the retail division and it's looking quite possible the remaining divisions could achieve normalized EPS of 13-14p for this year alone and both divisions are growing and have manageable debt going into next year, how long will it stay on a foreward P/E of 3.5? I know there are many people who just do not like this sector, for obvious reasons but I say, every profitable company is worth something, and a profitable company that is growing will be worth more than one that isn't. I remain convinced that I am right on this one and this remains a classic Ben Graham investment. I had to raise a bit of cash a few months back and sold 45k @ average 62.5p (lucky) however, yesterday and today, I bought back 60k at 47p. We will see if I have read it right when the Interims arrive in 18 days time. As ever all IMHO and DYOR JT |
Posted at 06/2/2007 18:50 by jtcod WoodcutterThis subject has been debated at length and yes I agree that music in particular is going through a sea change. However, CHUK are driving Games and DVD's mainly these days and should be entering the Blueray/HD-DVD market also I believe (which is better protected from rippers at the moment). The shops are a problem because of the sheer cost of running them. HMV are finding this out also, as you have pointed out. In the last RNS the management said: "Management is considering a strategic plan to ensure the Retail division, ChoicesUK stores, will not detract from the value and success of other Company activities." That sounds to me like they intend to offload the shops and concentrate on the primary business of ChoicesLocal. If they do, I estimate that the rest of the business is delivering normalised EPS of 13p 'and growing'. With debt levels dropping fairly rapidly (imo), the management will soon have the option to either: a) pay a 10 % dividend to drive the share price b) use cashflow to buy receivership opportunities as they did with andromeda or c) Buy the company off the market at a premium. The overall market will shrink and the capitalist system has a way of righting imbalances but profit is profit and the remaining core business will have a future. Those who are still standing in the end, will share the cake (however the future designs it). What is more, when the competition is reduced you will see margins harden, which will have a profound affect on CHUK's and others profit. You could say that those that are making a profit are squeezing the competition out of the market. CHUK will definately be one of those left standing imo and eventually a beneficiary of all this misery. All we are seeing is progress and the culling of the weak. Todays share price is a gift imo. As ever all IMHO and DYOR JT |
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