Brown (n) Share Discussion Threads

[rumobejo] 06/4/2020 14:56

nice 600k aka £65,000 big guns

[rumobejo] 06/4/2020 14:06

it is understandable that people miss a lot when they get too negative about something, they get stuck into negativity and miss the opportunity!!!

[rumobejo] 06/4/2020 14:05

Friday 5m volume took the seller out, now a positive rns should see this do 100% 200% 300% and would still be 70% down on year high 160p+

[rumobejo] 06/4/2020 13:00

tide is turning, this is no bust, this is the beast of 2020 COVID gifts...

[tjbird] 06/4/2020 12:56

bad debts come

[tjbird] 06/4/2020 12:55

looks bust

[paulof2] 05/4/2020 14:00

This is the buy of 2020.

Let me explain why.

There are concerns whether this business will survive hence why it’s took such a beating but actually n brown is in a much better position than most.

Firstly, n brown came out and said sales could be down as much as 40%. Yes this sounds horrific but actually it looks to have been poorly timed, looking at the data that tracks e-commerce sales overall it has picked up since then. What you also need to take into account is that almost 300m of n browns revenue comes from credit customers, this revenue is still going to be streaming into the business purely on interest alone rather than new sales. Yes there may be increased bad debt but the incredibly prudent bad debt provision can absorb those no problem. So what will the impact on sales be? Difficult to say but definitely far less than the 40% quoted.

Next issue - cash. Yes on the face of it it looks as if the business may be struggling for cash with just a 40m cash balance. However, as I mentioned earlier you’ve got around 20m fs revenue coming in, plus any additional product revenue which will still be at least £40m, with the non financial services element with 0 payment terms and instant payment coupled with measures such as furloughing staff and not purchasing any more stock there is actually very little cash leaving the business now it has shed its stores and the company can build up their cash reserves incredibly quickly. Let’s also not forget measures such as deferring vat payments etc which is another substantial amount to help the business weather the storm.

Next issue debt - on the face of it this does seem quite dire. However when you look into it the situation isn’t that bad at all, firstly the debt is based on us paper rates so the interest has taken a tumble too. However the key point here is that this 500m debt is secured against some of the financial services receivables only. Worst comes to worse what happens, they default pay off the 500m debt and lose 500m of the financial services receivables - no biggie and actually very little impact to the business overall, if anything puts it on a better footing coming out of the situation. And it’s quick enough to build that balance back up.

When looking at n brown you need to keep in mind that it isn’t comparable to many other retailers because of the financial services element of it which is often overlooked. Yes that does mean the business needs to hold more debt but also means the business is in a much more secure position for situations just like this. I, like many others, would have dismissed this stock straight away however as I used to work there I know how strong and much of an asset the financial services element of this business is. How a company with £70m profit a year can be trading at a market cap of £29m is beyond me, wouldn’t be surprised if this was bought up. A share tumble from 160 to just 10 is ridiculous and will fly up once the business releases its next statement essentially confirming its survival so I’m topping up substantially at these levels.

Target June 45 however wouldn’t be surprised if it reaches that point much sooner after the company comes out with a new forecast. End of calendar year 100, if not substantially higher when those juicy dividends return.

[ivancampo] 03/4/2020 23:00

I think you're mistaken, this will survive and flourish.

[jackson83] 03/4/2020 17:38

never to late to short this junk as I started only last week

[jackson83] 03/4/2020 17:36

5p within a month or lower.... suspension looms.

[debsdowner] 03/4/2020 17:30

niggle,

You are right. Was quite a reasonable business at one time, I haven't done a lot of research in the company but it seems its gone badly wrong and probably the fault of management.

Looks like its joined the 98% club where a company loses 98% of its value, the highest price ever reached £6 !

[niggle] 03/4/2020 17:25

From £1bn to £28m - This is priced to go bust. 99% divi yield!

[rumobejo] 03/4/2020 16:28

they paid 2.83p dividend on 3rd of Jan!!!!

seller TR1 out then 50p...

[hamidahamida] 03/4/2020 15:31

Drowning in debt and business has ground to a halt Administration is highly likely Imo

[rumobejo] 03/4/2020 15:17

nice 500k at 11.4p, seller is gone by day end!!!


50p comin

[no dice] 03/4/2020 12:45

Would be nice to see some director buys at these levels.

[meijiman] 03/4/2020 09:00

This is almost a textbook story of mismanagement where failure has been consistently well rewarded.
Bizarre to think that their core market is growing (fatties) but they have been left behind by rivals who understand fashion trends and market dynamics.
So most fatties can buy trendy looking gear in much larger sizes from rivals rather than end up looking like a sack of potatoes by buying from N Brown.