Brown (n) Share Discussion Threads

[mauricemonkey] 14/6/2018 07:38

You might well be right but the stores are losing money, revenue is pointless if it costs more to generate than you get in returns. Closing the stores saves 3M p.a.
Guidance for year unchanged, p/e 8 and 7% yield, hopefully a decent contrarian play.
I’m holding on.

[rathean] 14/6/2018 07:23

Disappointing trading update, forced store closures that will pact revenue and plummeting US numbers... got my buy-in target at circa 165p.

[mauricemonkey] 02/5/2018 20:13

I agree Stevie, just need to keep an eye on the level of default on that debt.
Worries for me are; the tax situation, if that goes on their favour that should be a catalyst for a rise, could go against them though; they need to prove there are no ongoing legacy costs and further provisions required; need to prove the dividend payout is sustainable, though if they sort the tax and legacy issues out the divi should be well covered.
I like the tv advertising, seems to hit the right spot.
I’m long here, keeping my eye on the above concerns but I think these are too cheap. Stocko has them on forward p/e 9, lots of headroom for price growth here I think.

[stevie blunder] 02/5/2018 16:10

Debt is balanced by the customer loan book, currently £600M, so I don't see it as a problem.

As I see it they borrow from the bank and use that to finance their customer credit, at a much higher interest rate.

Next do the same.

[eastbourne1982] 02/5/2018 10:26

Debt is getting way too high here, profits are falling and debt is set to rise to circa 450 million, that is way too much.

In some ways I like this business given it's online nature however the debt makes this too dangerous to hold long term.

I may trade it now and again however that will be all for me.

[ed 123] 26/4/2018 14:41

Thanks, Zho. Good to have another view. :-)

[ed 123] 26/4/2018 12:35

Agree but it's likely they don't know what's to come, and don't want to guess.

Net debt went up by about £55 million. Dividends for the year cost £40 million. So, the Group borrowed all of the money needed for the dividend and more.

Obviously not sustainable but the plan is that the exceptional costs end and trading picks up. However, without exceptionals, the post-tax profit was only £58 million, so the dividend looks too high anyway.

Angela Spindler has a very difficult job on her hands, and is doing well. I can't see anyone else doing better. If she pulls off this transformation at N Brown she'll attain star status.

Been to a couple of their AGMs. It's an interesting one and I trade it from time to time.

[mauricemonkey] 26/4/2018 12:07

Reading through the results, it seems the exceptional items are mostly “ppi” style payments. I find it really frustrating that they don’t state explicitly whether these costs are over or if there will be another round of provisions next year.
They stated all their forecasts costs except for these payments - until there’s some clarity I think the share price will remain in the doldrums.

[ed 123] 26/4/2018 09:06

Sarcasm? I wasn't really a 'holder' in the sense of sticking with it. I bought in the recent dip with my eye on the exit. Took a gamble on waiting for the results.

Profit was small, but for only 20 days use of that cash it was a good return.

What to buy next?

Any thoughts?

[cascudi] 26/4/2018 08:55

Fantastic. Well done holder

[ed 123] 26/4/2018 08:28

Looking at the rise and took it. Had bought in the dip and took my small profit.

[ed 123] 26/4/2018 08:27

Settling but a little volatile. Up a couple of pence on the day.

I'm guessing that shorts are under a little pressure? May settle back a bit lower later?

The adjusted figures were good for the sector but the exceptionals remain high.

Dividend retained but not really affordable if they carry on with those exceptionals.

I think N Brown would make a good add-on for Primark or Asda.

[ed 123] 26/4/2018 08:06

5 Minutes after opening and there's a 5% spread. Market doesn't know which way to go.

[nav_mike] 28/3/2018 17:52

Anyone have a current view on BWNG?

An over 50% drop from the October high seems a tad excessive given that this isnt a high street retailer.

Also the last update didnt take a hammer to 2018 guidance albeit margins came under pressure.

Has it been unjustly dragged down or are there likely to be downside adjustments to current expectations?

[zcaprd7] 16/3/2018 14:51

He's probably being sarcastic... I don't know, she annoyed me when I last googled her as part of my research, her company is struggling, and all I could find were her virtue signalling PR puff pieces about how tough it is to be a lady CEO, boohoo..

[colinsit] 16/3/2018 14:33

Why on earth would they put her on a scheme like that? The worse you do, the more we pay you??

[meijiman] 16/3/2018 14:04

Yes its linked to the share price The more it goes down the bigger the bonus. It's the reverse of most other schemes but the ceo played a blinder when negotiating it into her contract.

[zcaprd7] 16/3/2018 13:09

CEO still taking a salary here then?

[onjohn] 20/2/2018 07:17

£20,000 director buy

[citytrader66] 19/2/2018 09:35

09:33:50 188.9444 226,500 O 192.3000 193.0000 Sell

big trade. someone selling 226K shares at the 52 week low.

up today. market seems to like the RNS?

[rathean] 16/2/2018 11:58

Good post #hyden, very much my thoughts. They've got some strong niche brands as well although ability of management not clear. On my watchlist but not ready to dip my wick even at these prices... restructuring may like you said curtail the dividend so more downside here before it looks like good value.

[hyden] 23/1/2018 23:51

For what it's worth, I think that today's fall is over done. That is not to say that the price won't fall any further of course but it is now on my watch list.

The bull points: It is predominantly an online retailer with a very limited high street presence (a total of 18 stores which generate just ~2% of revenue). Development of the modern IT platform is well advanced and on track - both time and budget. It has an advantage over some other retailers in that it is an authorised provider of credit which may help insulate the business in the event of a downturn / recession. Cost pressures are likely to ease over the summer as the double running costs of the IT estate ease (all brands to move onto the new platform by the end of the summer), and as the company benefits from FX tailwinds. The pension scheme is in surplus!

The bear points: a £40m customer redress scheme will hamper free cash flow over the short term and may limit dividend progression (the HY18 results have given no indication that the dividend will be cut / axed). Margin erosion through the company's stated target to absorb cost increases in order to grow market share (but this actually appears to be a winning formula so far). Consumers are increasingly shifting discretionary spend away from clothing and footwear. Deterioration in the quality of the loan book (but this does not appear to be an issue so far).

I am not yet a holder and I will watch with interest before possibly stepping a toe in. :-)