John Lewis Of Hungerford Share Discussion Threads

[kash_] 20/1/2023 12:45

Thank you Graham for providing a summary of the AGM. I am a holder.

[graham1ty] 20/1/2023 12:15

Very good AGM and reassured on most fronts. JLH was never profitable sub £10m revenue, but that level now seems sustainable. Marketing has been hugely successful and the order book is as strong as it has ever been. The factory is in better shape, operationally transformed and a month of £1m revenue will not overwhelm them ( as it has in the past).

The focus now has to be on margin and “better” sales. JLH know that the product is quality, and clients are queuing up. Revenue is not the issue, it is converting it into sustainable profitability.

There was no trading statement at the AGM, but I hope they will update once they have a better feel for 1H revenue ( to Dec 31st just gone). With the £2m carried over from last year, it is inconceivable, given announcements to date, that revenue will be below last year, and hopefully well ahead. If that means 1H was profitable, it will be the first 1H profit in living memory and bode well for the full year.

A few years ago, JLH was a basket case, and possibly/probably going bust. If they can refinance the onerous loan they have at the moment, that would add another nice boost to the bottom line. The revaluation of the factory has added £600,000 to NAV (which is 0.3p per share, not reflected in the share price at all).

Hopefully in the next year or two, JLH will be valued as a financially sound, asset backed, profitable business. The options kick in at 3p, so management have every incentive to continue the recovery of JLH.

Well done, Board.

[davidosh] 18/1/2023 00:21

It is the Agm today in Wantage for those who can make it.

Maybe there will be a trading update in the morning to cover the first six months.

This was the last Agm statement by the company in January three years ago with figures for comparison prior to the pandemic....

Our despatched sales and forward orders (which we normally consider to be the best measure of current trading) for the current financial year stands at £4.2m (2019: £5.1m). Orders against which a first stage deposit has been taken, and for which there is a strong conversion into future sales, stood at £1.6m (2019: £1.3m).

These are the interims for last year...

The Company is pleased to report that the first half sales to 31 December 2021 are the highest in our history, at £4.6 million (2020: £3.3 million)

Very promising that these are the most recent figures given at the time of the annual results in December

...we entered the new financial year with a robust order book, inclusive of the deferred orders from FY22. As a result, the level of orders confirmed in the first 23 weeks are ahead of the prior year. Dispatched sales, forward committed orders and future orders against which a first stage deposit has been taken, stood at £8.6 million (2021: £7.4 million).

[georgeghutton] 16/12/2022 18:37

I hope you’re right. Personally I fear it will be another promise that fails to materialise. Have a great Christmas. G.

[graham1ty] 16/12/2022 17:59

The last trading update was March I think. Nothing since then ( and yes, that is far, far too long to have no updates). If that is right, then the Covid affected period was after the update, as it says 4Q. While it greatly affected that period, it was obviously not serious enough for any profit warning before or after the year end ( June 30).

What they did say in March was “Given the current levels of market fluctuations impacted by the unfolding global uncertainties, the Board remains cautious regarding any significant disruption to our production and logistics capabilities. The Company remains confident that the resilience in the order book would mean that any in-year disruption for this financial year FY22, would move a portion of the profits into the next financial year FY23 reporting period.“

So,they did not announce a delay, but said that disruption would push profits into next financial year: so either very honest, or very prescient. It happened. Had there been no disruption, and revenue had been £12.3m, then profitability might have been substantially higher.

At the AGM I want to ask about this year and the comparatives. It would seem fair to deduct c£2m from this year comparatives as that is held over from last year. But does that mean they should do £10m plus £2m held over= £12m, or might they do £12m plus £2m as “matching last year” might be said to be underlying £12m with the £2m carry over ?? If you look at the statement “Dispatched sales, forward committed orders and future orders against which a first stage deposit has been taken, stood at £8.6 million (2021: £7.4 million)” how is that affected by the £2m carry over ? Does that mean that “new business” ( ie net of the £2m) is £6.6m, down on last year ? I know I am overanalysing, but in all comparatives, I want to know if “ahead of last year” means ahead of £10m or ahead of £12m ? If the run rate is only £10m, add in the carry over, and you still get a 20% increase ( if you follow)

Anyhow, anything over £10m revenue should bring profits well ahead of last year ( without any more non recurring costs). And with £2m banked early, and the £8.6m quoted above, it does look as if JLH is doing pretty well

I hope

[georgeghutton] 16/12/2022 17:20

The only thing is the trading update was in June - no covid since then, so I guess my point is that with no new negative info to affect, why predict a material increase in profit ? Since June there has been little change to general situation - inflation in materials was rampant then, and in fact stabilising, energy costs were already spiralling out of control so that was a known as well. Interest rates were rising and it was clear the cost of living crisis was going to a major factor. It's a serious question that I think the board need to address - predicting a material increase in profit and then delivering a material decrease.

The theme always seems to be the same. Lots of postive vibes and then no delivery. Just my ten cents.

[graham1ty] 16/12/2022 16:17

First, profit before non recurring costs was well ahead at £166,000. Now you can argue about all the myriad adjustments companies make, but if it was genuinely “non recurring” then profits were ahead.

Secondly, the RNS refers to the COVID issues and c£2m of revenue slipping back into 2023. Again, you may chose to ignore that £2m ( it will just reappear in next years interims). However if ( you may say: big if) it had been in this years figures, that would have given another c£900,000 of gross profit. As costs were already covered, by the announced figures, that would have all dropped down to the bottom line.

With rosy coloured specs on, you have a large increase in revenue, margins steady, and indications of what profits might have been. We are told that this year is ahead of last year, so one could suggest that a level of profit well above current levels is achievable. Now, no one got rich on profits “that might have been” and we need to see real, reported profits. However, the results do indicate that things could be materially above current levels. JLH always suffered from lack of scale, and the move above £10m revenue is very welcome.

Lastly, though these reported numbers are below where they might have been, they “underwrite221; a certain amount of next years. Yes, still uncertainty, and lots of economic worries, but an advantage of these results being so late, is that they can give a trading update for over 5 months of this reporting year, and that indicates they are already ahead.

Depends if you want to believe in them or not !

[georgeghutton] 16/12/2022 14:56

This from the Half Year report;

"Future orders against which a first stage deposit has been taken are substantially higher than the prior year, which we expect will deliver in excess of £10 million+ full year revenue performance. Our central scenario as stated above, would deliver a profit materially ahead of the prior year."

Now, I'm no genius, but isn't £14k about an 80% DROP on £81k from the prior year?

It doesn't matter what metric you chose to shout about in the report - like let's pretend that we made a bigger profit if we strip out a random cost, in this case the IFRS16 - all that matters is the pre tax profit. That is the profit which is actually delivered.

So depsite a huge jump in sales, there's a material DROP in delivered profit.

How does this extrapolate out?

Anyone can be a busy fool.

[georgeghutton] 13/12/2022 17:09

A whole £ 14k profit from sales of over ten million. Fabulous as you say.

[nico115] 13/12/2022 08:36

Very pleasing results

[graham1ty] 13/12/2022 08:04

Move back permanently onto this new thread.

Fabulous results.

[graham1ty] 26/8/2022 17:22

Bapodra has sold out. Can this now be the main thread again

Thanks

[davidosh] 20/7/2022 15:54

Https://twitter.com/JLofHungerford/status/1544612151649878018

I do hope that John feels his hard work has been worthwhile.

He should be very proud of what has been achieved in the 50 years and it looks like the company is going from strength to strength.

Fingers crossed for the next results