French Connection Share Discussion Threads

[cyan] 28/4/2015 09:44

Where is this ramping multi-avatars warning? (CHRISOIL TWITTER & Undervalued Companies)

Another gloating tweet this morning.

" Chris Oil ‏@chrisoil · 46 mins46 minutes ago
Chris Oil holds all stocks mentioned on my blog if sell i give notice for example fogl & fccn both called correctly"

Chris; If you use a BB thread to pump your holdings , you should have the decency to post there that you're selling out.

If you had any decency you would not use more than one avatar anyway.

[thorne1] 27/4/2015 12:34

Some fairly tough action is now required from the Board to sort this mess out.Confidence levels must be low and approaches from interested corporates must now be more acceptable and therefore likely to succeed. I should imagine that lines of communication have been buzzing all weekend.Let's hope that SM's obstinacy does not cause him to hang on for too long.

[the millipede] 26/4/2015 21:12

Well I think the investment case is around them closing down their stores (perhaps all of them, perhaps there are some that are consistently profitable and worth keeping) and leaving a profitable wholesale and licensing business. It still seems as though they have enough cash to achieve this as store leases expire but Paul Scott is right I think in his article to say this needs an eye keeping on it.

Where I think he is perhaps a little overly bullish is when he says that the news on poor profits had effectively already been released and the market is somehow emotionally punishing FCCN twice for the same bad news. At the end of the day the news this week is what led to the house broker downgrade so it was clearly a surprise to them..... and commentators here were expecting break-even this year very recently.

So disappointing news sure IMO. But the company still appears to have enough cash and the disappointment lies in part of the business that is on the way out. This is all about wholesale and licensing IMO (not about poorly performing stores that will soon be gone) and without those there would be no investment case at all.

[amchugh] 26/4/2015 20:15

hxxp://maynardpaton.com/2015/04/24/french-connection-profit-warning-means-radical-action-is-now-required/

[essentialinvestor] 25/4/2015 12:42

Very nearly bought in here last year as thought there was some traction
in the recovery of the brand, it's a challenge to see the upside atm IMV.

[diku] 25/4/2015 09:07

Looking at the header chart all too often when you get a spike up like that from Feb 2014 to May 2014 it is followed by a downward spiral...best to sell out on the way up....No Advice Intended...

[the millipede] 25/4/2015 01:28

Hutch - I think you are right. This news will presumably result in more store closures and, AFAICT, the game plan is still on. But obviously it would have made sense, in hindsight, to sell out at 90p or whatever this got to.

[hutch_pod] 24/4/2015 15:11

Not to appear overly naive, but don't the old arguments still stand - ie once they shut down enough loss making retail stores, there remains a solid (and mainly wholesale) business? Admittedly it could take a long time to shut them down, and the RNS is hardly written with a 'ChrisOil' infused glamour.

[she-ra] 24/4/2015 14:48

Just hoping for some ramping in the press so I can get out at the right price. Might attract a takeover rumour. True or not i'll take one.

[stud-muffin] 24/4/2015 12:11

Where is the pompous know it all Pauly-I worked for a few years at a clothes shop- Pilot?

You know the cherubic pie eater who pontificates about all and sundry - often playing tag with a few other salad dodging windbags?

Come out now Mr Pilot and talk your way out of this one.

[pugugly] 24/4/2015 11:22

The old epic FUC*-ed says it all. Cannot see a recovery play here -

[ashbox] 24/4/2015 10:19

In November he stood by his tip of 120p on Shareprophets even though it had dropped from his previous buy price of 65p! To change your stance to sell without seemingly telling anybody and then claim a success beggars belief!!

[jak1] 24/4/2015 08:30

Been saying that so for long, I never see anyone but sales staff in the Solihull one...

[large_ones] 24/4/2015 08:21

Why am I not surprised by this. Every time I walk pass one of their stores they are always empty. Marks needs to sell up and move on

[ashbox] 24/4/2015 07:26

very downbeat update....looks like it's going to be a difficult time here.

[tmfmayn] 03/4/2015 07:39

Hi glen,

Thanks for the reply. I guess we have to hope for option 2 with FCCN. I cannot see 1 or 3 happening anytime soon!

Mayn

[she-ra] 02/4/2015 17:37

Quite a bit of activity today. Someone been promised a weekend tip or something?

[profdoc] 01/4/2015 12:02

I see your point TMFMayn,
In many cases of NCAV shares the best way of releasing value is liquidation (usually by stealth, over a period of time). But in others that does not make sense (definitely the case for FCCN while it has all those legal obligations. average lease length now 4.4 years)
In other cases the excess of NCAV over MCap gives hope of alternative ways of generating shareholder value.
(1) the industry economics improve due to exit by competitors, rising prices. The high NCAV allows resilence in the interim, and managerial action in the event.
(2) Managers pull their socks up, making proper use of the assets under their command to generate acceptable ROCE - it happens!
(3) A takeover bid by another firm. A company trading at less than NCAV (ie. ignoring non-current asset value) may well be vulnerable.
Which of the four alternatives provides the greatest hope depend on individual circumstances. I have bought into all four types. Some are cigar-butt liquidation types others have Pheonix potential.
Glen

[tmfmayn] 01/4/2015 08:21

"So, non-current assets do not save the day here. What about a significant trading turn-around?"

Non-current assets nor current assets actually save the day here.

The theory with using price to book as a valuation guide is that the business could be closed down, the assets sold off and the proceeds exceed the market cap to deliver a suitable return.

But with FCCN, closing the business down would still leave the business on the hook for non-cancellable shop-lease payments extending for another 5-plus years.

Note 24 of the 2014 accounts shows an aggregate lease liability of £160.3m. Subtract that from the accounting book value and we arrive at a negative value.

What is required for FCCN shares to do well is an uplift in profitability -- I just don't think the wider market buys the book-value story.

Still, FCCN's aggregate lease liability has been declining in recent years and hopefully the forthcoming 2015 report will reveal a further reduction.

Mayn