John Lewis Of Hungerford Share Discussion Threads

[graham1ty] 08/6/2023 12:27

Why are people selling at 1.05p when there should be a Tender Offer at 1.5p in just a few months ?

[nico115] 11/5/2023 16:02

Cos we have the best non exec in the city Can we trust ienerhuser to do the same I hope so

[davidosh] 11/5/2023 15:48

Just copying this from Paul Scott's morning report and I totally agree....Well done to the board in providing a good solution for all shareholders...

John Lewis of Hungerford (LON:JLH)
Down 9% to 1.35p

Market cap £3m

Delisting, sale & leaseback of property

A very sensible announcement, explaining why this £3m mkt cap tiddler thinks the costs (£250k) of keeping its listing are not worth it. I completely agree, and never understood why this small upmarket kitchen seller was listed in the first place!

Also, it's doing a sale & leaseback on a £3m property, and paying down an expensive £1m loan, an interest saving which will largely offset the new rent payable. That also makes complete sense to me.

A tender offer for up to 10% of the company's shares will be made available, and an intention to do more in future, once it's a private company. In my opinion this all makes total sense, and looks a fair way to exit the market. Note that shares have recovered from recent lows, so the exit price c.1.5p is OK I think. Also there will be a matched bargain facility set up for shares in the private company to be bought or sold. We need to see more tiny companies leave the public market, there is no sense in keeping shares like this on a public market. Shareholders here should be thanking the Directors for handling this in an orderly way, confirmed with only a 9% drop in share price today, whereas a delisting announcement usually causes a 50% instant negative market reaction, as people rush for the exit.

[georgeghutton] 03/4/2023 17:32

I realise I am the odd one out here, but I just can’t get my head around why everyone thinks it’s so fantastic. Every update is about increasing turnover and how that will lead to a profit. Not an increasing profit, just a plain simple profit. If I may, the update which promised a profit failed to materialise, why ? Sales were up and all the conditions were met. Oh. And this time? Other exceptional non recurring coats. Now how many more of those are there ? That’s just a really weak excuse. On £5.4 m of turnover, a loss of 174k. That’s more than double the last half year’s loss. Why ? Last year it was ‘if they can do 10 it’ll be brilliant and the money will just roll in’ but all that’s happened is they lost even more money. Now it’s 12 million and it’ll be a home Run. I am a die hard optimist, but this is just the same story every update. And as I have mentioned, the strategy of sales the whole time - I accept in plenty of businesses, generally lower market, that is a good strategy. But when margin is your problem, buying turnover at the expense of margin is not a strategy. It’s desperation. I’ve been bearish on this stock for months, and a year ago I actually wondered if I had it wrong. It looked like it might just be turning. Now I know I’m right and it’s just a matter of time.

[davidosh] 31/3/2023 00:54

Agreed...It is all about improving the margin now as clearly they have shown the future orders and popularity is still growing steadily.

I am sure the ability to provide credit finance for customers has helped and also building awareness of their products with good use of social media channels.

Well done to all involved and we look forward confidently to the next full year results to June and hopefully a strong period of sales through the Summer to start of the next year in great fashion.

[graham1ty] 30/3/2023 16:58

Solid results. £12.3m of orders in the year would smash records, though it might not all fall as revenue this year. Now JLH has got to concentrate on margins, as it really should be making profits at that level.

It does suggest that this year should be more profitable than last. And does state: “As we move through FY23, we continue to celebrate 50 years of John Lewis of Hungerford, with confidence that the Company can achieve sustained profitability”

Shareholders should congratulate the Board and look forward with confidence

[kash_] 30/3/2023 16:37

One mega trade gone through...10m shares!

[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