French Connection Share Discussion Threads

[cyberbub] 25/4/2017 07:12

I suppose the EV is lower, with all that cash...

[cyberbub] 23/4/2017 18:59

If that's the case then surely on market cap of £35M-odd then it's not likely to go much higher?

[simso] 16/4/2017 09:25

The Licensing and Wholesale parts of this business are clearly profitable, and the massive problem is the ££9.7m loss made by Retail. The Retail part comprises four elements: High St Stores, Outlets, Concessions and Internet. I am pretty certain that Internet, Outlets and Concessions will make a positive contribution, and that more than all the £9.7m losses are in the 45 High Street stores. They could easily be losing £12m-£15m out of the £9.7m total. The average remaining lease term is 3.2 years, and I think they will continue to whittle away, closing 6-8 a year. The Group Profit would therefore move forward by £2.5m to £3m pa due to closures, if all else remains equal.

[smicker] 30/3/2017 17:19

Mentioned in DFS results today. Seems to be going well

[paleje] 20/3/2017 14:06

ST included these in his column today. Oddly, although he mentions the hedge funds, he doesn't mention Ashley:-

...Of course, we have been here before, but the difference this time is that Mr Marks, founder and 41.7 per cent shareholder, is under huge pressure from disgruntled shareholders, including US hedge fund Gatemore Capital Management and OKA Capital which between them own 14 per cent of the share capital. The closure of unprofitable stores is reducing the cost base, ecommerce presence is improving and accounts for 13 per cent of sales, and the year-end cash pile was only down £500,000 to £13.5m despite the loss incurred, a reflection of cutting stock levels.

Ultimately, French Connection will have to build on the improving sales trends, but if successful the equity is being undervalued on a 30 per cent discount to book value and with net cash equating to almost 40 per cent of the market value. So, having advised buying the shares at 45.7p in my 2016 Bargain share portfolio ('How the 2016 Bargain share portfolio fared, 3 February 2017), I continue to rate them a recovery buy.

MORE FROM SIMON THOMPSON...

[srpactive] 16/3/2017 09:02

Once over the 200dma (36.66p) we should climb towards 38p.

The activist reckons a break up of fccn would result in a valuation
between £60 - £100m, market capitalisation £33m, interesting
to say the least.

dyor

[srpactive] 16/3/2017 07:57

The US activist is very unhappy, I think you will
now see the larger shareholders supporting one side
or the other , that will inevitably lead to I feel
a bid or bidding war. I hold here.

dyor

[srpactive] 16/3/2017 07:22

French Connection break-up spat: Investors lose patience with struggling fashion brand

By City & Finance Reporter for the Daily Mail

Published: 22:29, 14 March 2017 | Updated: 22:29, 14 March 2017

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Gatemore Capital has called for French Connection to be split up

Gatemore Capital has called for French Connection to be split up

A row over the future of French Connection has intensified with investors calling for the fashion brand to be broken up.

Gatemore Capital – which owns an 8 per cent stake – had been pushing for a shake-up which would include French Connection boss Stephen Marks relinquishing his joint role of chief executive and chairman.

But after it posted a fifth consecutive year of losses, Gatemore lost patience and called for it to be split up completely.
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Liad Meidar, chief investment officer at Gatemore, accused the board of making a 'mockery' of modern corporate governance after Marks refused to split his roles.

But Marks said the firm was moving in the 'right direction'.

Overall revenue fell 6.7 per cent to £153.2million, but like-for-like sales jumped 4.4 per cent.

[paleje] 15/3/2017 16:37

I don't follow ALY, my wife shops there sometimes:) Aren't they close to the edge, maybe MA prefers buying off the receivers? Dunno really, hope that's not the case if you're in there.

[srpactive] 15/3/2017 16:27

I do not know why he does not try to buy aly.

dyor

[srpactive] 15/3/2017 15:11

Looking interesting now, if we can break above
36p we could easily challenge 38p.

One of the big players have got to make a move
shortly I would have thought, even my aly offer
price is rising.

Edit, now challenging the 200dma at 36.66p.

dyor

[srpactive] 15/3/2017 11:35

I wonder what Simon Thompson at the IC has to say about the
latest fccn figures, he had a buy recommendation on them
last year.

dyor

[srpactive] 14/3/2017 16:24

I thought there would be more discussion
here today from the US investors.

[srpactive] 14/3/2017 12:12

she-ra

Yes quite right good prices can be paid for not so
clever assets, we also have the sort after headquarters,
wasn't it said Apple want it?

dyor

active

[she-ra] 14/3/2017 12:08

You might all want to look at what Lion Capital paid for All Saints Spitalfields when it was heavily loss making and during a very fragile global economy.

[srpactive] 14/3/2017 12:06

w82

That is the price I would think any bid would come in at,
but I feel Dunelm man would buy before Mr Ashley.

Good to talk.

dyor

active

[walbrock82] 14/3/2017 11:59

With £2.4bn fortune, I'm sure Mike Ashley could help out long-suffering shareholders with 65p/share offer. (If he decides to buy the business)

[srpactive] 14/3/2017 11:53

smicker

I was not questioning you, just interested that was all.

But thank you.

active

[walbrock82] 14/3/2017 11:49

The cash position was a bit surprising and helped buffer the share price. I don't know why FCCN release like-for-like sales growth figure when the business is shrinking the retail division. Also, it reports underlying losses of £10m.

For me, the big improvement is operating cash loss shrink from £7m to £1m.

[smicker] 14/3/2017 11:31

I was summarising the contents of the article i referenced. The activists are quoted as valuing the brand at 80-100m and that is 2-3 times the current market cap.

I dont really try to overthink these things. There are experts from the trade ( dunelm and SD ) who have both committed significant sums of money buying shares in this company at round the current price. There are a number of activist investors doing the same. If i'm wrong about it, i'm alongside some very very astute people who've made more money than i could ever hope to make. I'm backing their judgement more than mine here

[srpactive] 14/3/2017 11:21

Smicker

Why do you think anyone will pay as much as that?

[srpactive] 14/3/2017 11:20

she-ra

Okay, always good to get other views.

I now think events either way will start sooner rather than later.

dyor

[she-ra] 14/3/2017 11:17

srpactive - no I think he wants to buy it and he doesn't want to pay much for it. I just hope Marks doesn't do a deal with him that is preferential to himself and not to all other shareholders.