Mothercare Share Discussion Threads

[yump] 16/1/2018 23:26

You also 'couldn't make it up' about the volume of alternative facts appearing on the boards.

[ltcm1] 16/1/2018 10:43

Eastbourne1982 you are spot on.

Why on earth would anyone trust this BoD when they have been a disaster for so many years. The fact Griffiths is buying MTC shares shows how appaling his business judgement is and he's the bloke running the company! You couldn't make it up.

If they have to shutter another 70 stores say it is obvious there will be a huge cost in doing this. Net debt to equity will quickly spiral. They are making almost no money and debt looks like it will be going up. This is a horrible situation and the shares could easily halve from here. And they took 100m off shareholders in 2014!!!

[eastbourne1982] 15/1/2018 10:18

Where the debt will be in 12 months is the key, will it be significantly lower than the current 50 million, I very much doubt it, will it be closer to 80 million, who knows ?

[kmann] 15/1/2018 10:14

As I see it, they made a late call to start discounting, it cost them dear. More of a strategy failiure than a systemic collapse.

As for the share price fall, wrong kind of market to release sub expectational results and guidence.

Longterm players are still backing this, so could be a fantastic turn around recovery stock imo, but may expect a knock back. Wouldnt be surprised to see a wealthfund take this out.

Hats off to SheRa, you called this right, but its a question of valuation now, not survival. Overseas starting to deliver.

Data I'm looking at backs up management, and birthrate looks steady according to this

[yump] 14/1/2018 17:45

I'm always disappointed by the four legs good, two legs bad split. Three legs can work and the idea of voting either Labour or Conservative, but nothing else is a farce, given that the two parties are pretty similar.

[terminated] 14/1/2018 13:50

To say everyone does research on the internet before buying is a ridiculous statement. Women in particular are impulsive buyers. People buy things they don't need and borrow money they can't afford to pay back. We do not live in a society of logical researchers....Of all the products sold baby items are the least governed by logic, especially when women are buying. They will pay a premium for their children, especially where safety aspects are concerned. It's all about positioning themselves to operate efficiently. Accumulated debt is their biggest issue here but assuming they get the UK operation profitable and think a buyer will snap this up.

[eastbourne1982] 14/1/2018 11:49

Read the latest reports and look at how the debt is spiralling.

Net debt in Oct 2016 was 15.6 million, in Oct 2017 it was 37.6 million, the last update indicated debt was expected to be around 50 million, I'd say that is spiralling.

Compare it to profits and the falling market cap and I would consider it to be quite concerning.

[yump] 13/1/2018 17:02

There's some very arbitrary reasoning going on here.

"Stores don't work" - no evidence for that yet.
"People aren't prepared..." not all people clearly.

Again: if MTC can get the market segmentation right, it won't matter if turnover is halved. What would actually be interesting is to see some data on what proportion of spend by mums ends up online and in store and whether any trends have stabilised, increased or reduced.

Or put another way: if you floated a mix of online and offline, targeted at this market, would it sound attractive ? Because its a much more targeted segment than 'clothes for 18-30 year olds'.

imo CARD, despite having a nice dividend are probably at the start of issues that will affect their margin, although I certainly don't buy the argument that people will keep moving online to buy cards and that CARD is under threat from that.

CARD's stores clearly work. Their business model is a lot simpler than MTC's though.

[eastbourne1982] 13/1/2018 12:19

This company clearly needs new management, I sold earlier this week for a hefty loss as I have no confidence in the management and debt is spiralling, not a good mix, retail is only going to get harder, if the current management continue as they are MTC will be in administration within two years.

The one thing that kept me in MTC was the hefty online sales, over 40% of total sales however they don't make any money and online sales are dropping.

What positives are there ?

I bought CARD yesterday at £2.16, a far better proposition than MTC imho.

[yump] 13/1/2018 11:44

I suppose for some folk, putting all retailers in the same box means they don't have to do any thinking.

[yump] 12/1/2018 15:40

As someone famous said: that's not even wrong.

[she-ra] 12/1/2018 14:27

yump - Online only retailers are cheaper on everything. Stores don't work. Period.

[terminated] 12/1/2018 11:31

The Philip green analogy is laughable. Go how he turned bus into a cash jugganaught just long enough to pay himself 600m dividend only for 2 years late for it to go belly up. He cooked the books, raided the pension pot then set it free for the dogs. BHS was not a success and the last thing any retailer needs is Philip Green. From now on it is unlikely the UK division will make a loss. Sales are falling but they are closing stores so sales are going to fall along with footfall. It's all about will the cost savings outweighing the decrease in sales, and these cost saving will not show until the next 12 months. Up to now they have just incurred costs with little reward.

[ltcm1] 11/1/2018 13:34

Tilly I agree director buying is normally a good sign but had you bought when Griffiths last bought you would have lost over half your money. So it can be dangerous viewing these director buys in isolation.

For me the answers lie on the balance sheet. Will the net debt rise? What is the lease situation on stores they might have to close? On the plus side the online sales and the franchise arm must have value. 143 stores does seem like a hell of a lot to me given the lack of profits for so long. It's pretty scary they have made no money in what has been a very good few years for retail.

[isaready] 11/1/2018 13:11

Tilly,

I am trying to see if its worth buying these.

Taking the price of the share to one side, when you say its a good recovery play, in what context? You mean recovery in the share price or the business as they are two seperate things.

If its a good recovery in business terms, then sure, it would have been good at a higher price no?

For me, its, what's going to happen to the balance sheet, the revenue and costs. Are they shrinking or growing.

[tilly99] 11/1/2018 12:25

LtcmGriffiths with 13pct and big director buying makes this a buy to me Let's see!! U do seem clues up but at 45p this looks like a good punt

[tilly99] 11/1/2018 12:16

Agreed clock tower This is now a sitting duck A retail guru can work wonders with this