Price moving down on the back of a bit of buying action today....do I have this right? |
EW I sold out after contact with CFO caused me to doubt management. Won't look to re-enter until I feel comfortable they tick the honesty & competence boxes. |
Very quite here, folksAnyone have any thoughts at present? |
I asked if they would consider including expectations within their communications and gave examples of other companies doing this. No specific answer was given but the CFO said she would "certainly pass on the feedback to the Board as part of our half year results review and ensure that they are aware of your concerns". Let's see what happens going forward reporting/communication wise. |
I'll write tooThere's value to be unlocked here surely, even if just via enhanced communication practices/ transparency/ earnings forecast expectation ranges |
Tudes. That is a point point I raised when contacting company. Bizarre choice and not one I've seen before. Would encourage anyone here with concerns to contact company as the more feedback they get the more likely they are to make the necessary changes. |
I'm a little puzzled about the video of the results presentation. It was clearly done by the team at Investor Meets Company as its the same individual doing the intro & the summary at the end but it hasn't appeared on the IMC website and was not communicated prior to investors who follow the company. I really don't understand why the TUNE management team made the decision to just put it on their own website and not share with the wider private investor audience. Given the company needs a higher profile in the market it seems like a really odd decision. |
RP19. Yes definitely worth going back to her on this as that's rubbish. Minimum they should offer is to inform what the range of expectations is and if they are line, or not. Good practice would be to put Broker forecasts on their Corp website. |
Jolomo - I also wrote with similar concerns and got a similar reply. Said they will review future communications and are updating their corporate website. We'll see!
The CFO said that they do not include specific expectations in their communications as this is market practice. I think this is inaccurate as there's are plenty of companies that do provide guidance within their comms and I will get back to her on this. |
Just for info I wrote to company this morning to voice concerns re lack of clarity & also pressed for better retail investor engagement. CFO just replied stating will take my suggestions to Board & hopefully we should at least get an Investor Company Meet for retail shareholders. |
Morning EW, re page 8...they obviously don't get EPOS sales from their retailers so registrations is the best way for them to gauge what consumers are actually buying vs the product that they are selling in to these retailers & other re-sellers.
If they were seeing a 7% decline in this bi-month it might suggest they've actually gained share as their market data (which is largely US centric) suggests that in calendar H2 the music market is down 8.6%. It's a bit of a loose comparison as they are comparing a bi-month (Nov/Dec) with a six month period but it's probably the best they can do to assess market share.
TUNE has always been illiquid as the founder has held such a significant stake. Dudderidge has reduced this over time but it can still mean that share movements can be accentuated in both directions. The last short position reflected on shorttracker went under 0.5% in Sept 22 so there is no further data available after this point. |
Thanks for posting the presentationThought this was a bit more positive and descriptive than the results communication actually Not sure I fully follow p8. charts & data, but if it means holding market share in a sluggish market, while clearing inventory build-up, then can't really complain when it comes to the sustainability of this company. Although if it's in a slow growing market, then we can never really expect stellar organic growth &/ growth-stock PE multiples.I'm positive about the diversity of the portfolio now and the various fairly recent acquisitions look really positive.It's obviously difficult to swallow the losses this week and it feels a bit overdone perhaps. I plan to hold these for the long term all the same.I must be missing something and would love to hear thoughts.Perhaps someone has visibility on the order book/ any overhang/ any shorting etc in case any of.thoae dynamics may be amplifying the recent movementsGLA |
Thanks for flagging presentation. I'll have a look later.
Your 34.4p chimes with my guess of 30p-36p, so we are in a similar ballpark. Hoping we are both being too pessimistic. Management have a credibility problem here if we are correct as were guiding on track in March. |
The results presentation has just dropped on the corporate website along with the analyst presentation which has some brief Q&A. Slide 7 of the presentation deck is worth reviewing for a more detailed understanding of the inventory issues.
Re EPS - its a tough call but given the commentary about increased costs due to promotional activity I'd say that a comparable decline in adjusted diluted EPS would put H2 at around 16.4p. FY EPS would then come in at 34.4p which would be my worst case scenario given the significant product launch slate scheduled for H2. Based on current share price the Co would then be trading on 13.4x which given the historic ROCE / cash conversion seems extremely good value to me. Prior to the covid bounce the Co was trading on 20-25x earnings. |
RP19. Will be interested on any response received. Lack of retail presentations, use of 2 expensive & unfriendly brokers, poorly communicated results etc all need to be addressed. I do think Board need reminding that retail investors provide the daily liquidity.
My adjusted EBIT came in at £13.81m adding back acqusition costs & amortisaton of intangibles, but not the £0.4m restructuring charge. Prior to interims I had broker forecasts of fully adjusted EBIT of £34m & eps of 44.8p. Would expect at least 10% knocked off these after yesterday, & I still think risk will be on downside. |
 Jolomo, I agree on the communication front - there is so little information available. I've emailed the company for the views on this, let's see if I hear anything back.
I was disappointed by the numbers. Although there are no forecasts out there, on March 14 2023 they said that HY 2023 profits "are in line with Board expectations and remain unchanged for the full-year supported by stronger gross margins". Then yesterday, operating profit was announced at £11.5m which is someway below the 2022 figure of £16.3m. I'm not suggesting that they ever said that this year's figure would match last year's (I accept wider challenging consumer environment)but was the Board's expectation really to fall significantly short of the 2022 figure? If so, this was not evident in any previous communications to me.
Given the above, hard to know what EPS we are going to get in H2. Is it realistic to double the adjusted H1 figure (18p) to get 36p for the FY? If so, the current share price is not on a demanding rating. |
The quixotic but successful Beddard has just added to his virtual portfolio |
I agree I don't think business is broken but maybe they could get you to write their updates. Issues re inventory, weak sell through were hardly unique to TUNE in the period so I don't understand why they were so shy in explaining this in greater clarity.
Would be interested if anyone has latest broker update. I think chance that could be as bad as 30p-36p this year on back of higher tax rate, although success of new products key. Not end of world considering share price decline. |
Fair point I think, more clarity needed. I've seen the CEO present plenty of times over the last 3-4 yrs on webinars, results presentations, etc. He's a little slick for me and I'd say his communication style is unsurprisingly American in style - I don't think it helps much.
The inventory issues seem transient to me - they took the decision to sell (Focusrite, Novation) into their trade customers earlier for the Christmas season (some of this revenue fell into H222) to ensure retailers had enough stock given all the supply chain issues. Consumer sell through was weaker than they hoped during Xmas (softer macro) and they've then had to promote harder to clear this stock through as well as discount older stock that is being superseded by new products being launched in H223. It's not ideal and has clearly impacted performance YTD but it doesn't suggest to me that there is any fundamental issue with their brands or product range. They quoted external product registrations over Nov/Dec being +21% vs the same period in 2019 which doesn't suggest to me that this is a company going backwards.
Worth remembering that the share price at the end of Feb 2020 pre-covid (end of H120) was 550p & the market cap was approx 330m vs current share price 485p, market cap 290m. In H120 the Co made 50m rev's & 9.3p adj diluted EPS vs 86m, 18p EPS in yesterday's results. |
Biggest issue I had with results was the wording of the release. Trading was always going to be tough in H1 but the failure to put numbers to an outlook & general vagueness raises concerns. Are the management deliberately trying to obscure poor performance or are they just poor communicators? Are they such poor communicators with their own staff? Neither option is great. Lack of retail friendly broker doesn't aid matters either. |
Market share is referenced in the results, they believe they maintained share in a tougher market. They mention North America market being down approx 8% vs prior yr which puts their performance into context.
Have seen some commentary about the results that seems to confuse sell in with sell through. |
Whichever way you choose to look at it, this is a good business run down by poor liquidity and short-term investor sentiment. It will rise again. |
It would be helpful to understand their market share and whether that has deteriorated in key segments. |
Register for real-time alerts, custom portfolio, and market movers
Hot Features
Premium
