Pittards Share Discussion Threads

[clocktower] 13/5/2021 20:47

One of the BOD is a Mulberry man have you not noticed S.

So I expect they purchase Pittards leathers and bearing in mind that Mulberry are doing much better than they expected and unlike many companies they do not have a sale on, and are doing exceptionally well in the Far East. Hence I suspect they are also buying a lot more leather from PTD this year. In fact with concessions in a lot of Frasers stores, who are now open and as Mike A has a decent stake in Mulberry must be motivated to promote the high priced leather products, which in turn must benefit PTD as they use top quality leather in every leather item they make.

Do not forget that PTD also make quality bags etc.

[smithie6] 13/5/2021 20:34

from Burberry's accounts

"In addition, within full-price, our strategic pillars - leather goods and outerwear"...."Strong performance in leather goods..."

& their turnover is ~£2300 million !!
& underlying profit is ~£400 million
a % bottom line margin of about 17% !!!

so
- there is high global demand for luxury leather goods

- buyers are willing to pay a high profit margin to buy such named products

but clearly Pittards have not been at all successful in trying to break in to that market. :-(

can they start to achieve it ?

(& is the MD, with 30 years at Pittards & the turnover on a downward trend towards zero !,
the right person to drive/make changes
& to create a brand (the last 30 yrs indicate imo that he doesn't have the background to increase the turnover or create a global brand)

[smithie6] 13/5/2021 19:55

selling the co.

well JR is free to telephone possible buyers if he wanted !

( J. Bloggs in China (selling luxury leather goods (Lacrosse, Hermis, Burbury, Mulberry, Tous, etc)
& might like the idea of getting their products at cost price !

interesting, Mulberry was only founded in 1971
cap. value of £141 million & turnover of the order of £190 million
from 0 to £190 million turnover in 50 years, not bad.
(versus only £15 million at Pittards :-( after > 100 years :-( )

& based in the same county as Pittards !

(maybe Pittards could try to copy some of their business approach)

[smithie6] 13/5/2021 19:50

how many train make any use of leather ?

I haven't seen many, perhaps in first class ? (could be quite a lot of m2 if someone was willing to pay the price)

[clocktower] 13/5/2021 18:38

Do you know of any other UK Tannery that has this technology?

As I mentioned, suitable for Hospitals, Care Homes etc - A game changer with the Upholstery trade and lots of other industries that want to eliminate 99.99% of bacteria - Sounds just like bleach - Trump would approve! :-)

"Tri Protex® ; comprising 3 separate anti-microbial technologies bound together to form one synergistic umbrella technology. Pittards technologies
MicrospikeTM and Microdefence® together with Micro-FreshTM, create a protective environment throughout the leather structure destroying
microbials. Pittards Tri Protex® conforms to AATCC100, achieving 99.9% elimination of bacteria."


"Pittards Explorer FireblocTM leather has been designed specifically for the management of heat and fire resistance where the highest performance
upholstery leather is required on rail transport. Using advanced chemistry and innovative manufacturing techniques. Pittards has imparted high
performance heat management, smoke, toxic emission control/suppression and fire resistance to upholstery leather which conforms to EN45545-2
2018, the European railway standard for fire safety."

[clocktower] 13/5/2021 18:17

From 2018 - Hong Kong

[clocktower] 13/5/2021 18:15

No S - to me it means they have decided its time to make hay for themselves, and any new or remaining major shareholders, so they chop £2 million from costs, start eating into the stock pile - which was dropped by £2.3m from when they "changed" in H2 2020.

So at that rate even, expect full year drop of no less than £4.6m, and as everything is opening up and they have added more manufacturing in Ethiopia - I would suggest the stock might drop by £5.5m.

"Reduced cost base by £2m, changed operating model "

you understand what "changed operating model" means"

I would also suggest they might use some of that ££7.5 million to buy approx 400,000 shares to add to the 900,000 plus they have already acquired, which they obtained approval for at the AGM.

or they have a international company looking to buy the whole joint + JR + ( * )= %

Will we see more sellers tomorrow?

Have a good evening S.

[smithie6] 13/5/2021 17:46

has Pittards got any presence via agents in China or Asia ?

[smithie6] 13/5/2021 17:45

btw

Burberry prelims were issued today

"Within this, full-price sales grew 63% in the quarter (12% versus Q4 FY19) driven by Mainland China, Korea and the U.S."

sales +63% !! versus the prior year

hopefully with luxury goods shops opened again Pittards have also seen a big uplift (some info in the RNSs I think)

[smithie6] 13/5/2021 17:39

Reduced cost base by £2m, changed operating model "

you understand what "changed operating model" means ?

they are still making gloves (etc), still processing hides & still then selling on to the shoe, car sectors

the change is making shoes themselves ?

(they only had about 3 of their own shops, with 1 being a factory shop; & the shops are operated to fly the flag imo rather than be the main routes for sales
& they only closed 1 shop, ( saving 100k)

ok, they are also trying to make Pittards a brand for bags etc but I think it will phps be difficult to quickly obtain a high % of the overall sales from that

my guess is that the shoe mfr venture is going well & that encouraged the dirs & J.A.Rendell to put more hard cash in to co. shares
(in recent 1-2 yrs I think Rendell has gone from ~16% to 23% to ie. buying ~7% of the co.
I make that about 1 million shares !
& if he did it with an average of 45p then it cost ~£450k !!!!!!

(just need to hope that he has a brother running Jaguar or any co. making train seats ! (that need to buy lots & lots of leather !)

[clocktower] 13/5/2021 14:20

As cheap as the shares today S . :-)

Just need more liquidity and I would add again.

I'll buy you 50 when this reaches £1. S

[smithie6] 13/5/2021 13:51

the gloves look good
& as you say, cheap, <£4/pair
I could use a pair but I don't need 50 pairs

(£12-13 for just 1 pair from different seller; clearly if you can buy at £4/pair & manage to re-sell one by one at £12-13/pair it would be a good return !)

[smithie6] 12/5/2021 23:12

to be clear

12 months of inventory is terrible stock control imo

hopefully it is bad due to the notable fall in sales in 2020 due to the Covid crisis bumping up the unsold inventory (but if so it shows that if sales falls they are "unable" to reduce their stock buying in response !!, which seems nuts) & not due to a sleepy bod

(but imo the co. has a history of having an excessively high inventory wrt turnover, debt, profit, etc; but phps there are some reasons for it )

[smithie6] 12/5/2021 23:05

stock

I'm not an accountant but I'm fairly sure that the inventory is treated as an asset & changes in assets are input to the report for assets but not input to the calcs for profits (unless a large chunk of that asset is sold as is to an external buyer in which case it would go in to the profit calc; where leather/inventory assets are used to make products then the book value will be included in the profit calcs as a cost)

if there is a change to the value of an asset then it can be put in to the profit calc. as a one off (& PTD did that once about 5-6 years ago) (while noting that some cos. declare that they don't revalue assets unless they are sold, phps to reduce the accounting work/costs & to have less problems avoiding paying tax in real money on a 'profit' which hasn't been crystallised & hence hasn't produced any cash to pay any tax on it !

[smithie6] 12/5/2021 22:49

btw the possible cost of the free shares for the directors, if the share price target is met (even for 1 day )

£1.4 million

£560k for the MD (40%)
£420k for the chairman, 30%, who sat on the renumeration committee to change to conditions of the bonus scheme, which included £420k for himself.

(& to buy those shares to put in treasury ready to give to the dirs. is money that could in part be used to pay a divi to shareholders or reduce the bank (which would also be benefit the workers by making the co. more solid financially))

(I guess that the workers would probably like to be able to create & approve their own bonus schemes, as the b.o.d. have done !! je je)

it appears that there is no lock in period & the dirs could sell their shares as soon as they get them & resign the day afterwards. (although selling such a volume of shares would take time, unless the co. was sold)

[clocktower] 12/5/2021 22:16

True Smithie6, and I do not disagree with you to some extent BUT if you have a plan to enrich yourselves and not your shareholders for a few years, you might hatch a plan that is in your best interests and not that of all your stakeholders. All I am saying, that is the picture one might draw, you might be quite correct in saying they are a bunch of useless twits but go look at their qualifications and experience plus their ages, and maybe think the unthinkable, not that I am suggesting they have done anything wrong but just acted to promote certain interests at certain times.

However, we can both look at it from different angles - surely no company of this nature would sign a contract for skins, for years like you are suggesting.

Overstocked to the tune of £17m now £15m unfinished goods, come on S they add value by making gloves, shoes, etc So did the drop of £2m help the company become EBITDA positive in H2 and will a further drop in stocks (should that occur have the effect of turning into profits) have a material effect on the cash flow etc.

[smithie6] 12/5/2021 21:52

have to agree to disagree

generally a good business is one that turns over its stock in a short time, & makes a % in doing so. & holds little stock of raw materials ('just in time' is a modern version of this, where almost no stocks are held & materials or subassemblies are supplied 'just in time' as needed by production. (this modern production metod, JIT, of implodes if just 1 production item does not arrive 'JIT' since the whole production process then stops !, while many overhead costs continue)

at present PTD is only turning over its stock once every 12 months

pretty terrible imo

but phps there are some reasons that partly explain it
phps they have contracts with the animal skin providers to buy X hundred/thousand skins per month, which is good for PTD since it gives them a steady price & a g'teed supply of raw material
but if PTD don't then sell the resulting finished products they then get overstocked

[clocktower] 12/5/2021 20:24

S, any shrewd business owner, will devalue their stock if they are making more than they require, even if they are borrowing up to the hilt, if they want to make the business look less than healthy, or if you want to carry your profits forward you devalue your stock by a greater amount one or more years and build a stock pile.

Who is to argue what you say the stock is worth, it can be worth as little as 10p in the £1 if a liquidator gets a foot in the door.

They will also use stock to manipulate the business, building stock piles that can be used if you hit hard times, or for example if you wish for example to sell your business at top dollar. You turn your devalued stock, into gold with a magic wand, by selling a chunk at top dollar, then valuing the remaining stock at the price you are currently having to top it to just keep the wheels turning, with the lowest overheads you possibly can manage with.

Having good stock is like having gold in your safe if you have a market for it.

So, what you have done is show good profits, with low expenses, bar what the directors draw, as any buyer can just wipe that away in a stroke. You wave the wand again in the same way as you obtain a new property valuation to what maybe on the books having not been revalued for x number of years.

Skins are great stock, labour costs rise, storage is cheap in certain countries, so the only increase you suffer from is transport costs but you can control those to some extent as well.

[smithie6] 12/5/2021 19:06

btw

would buying fewer new skins & making more use of existing stocks actually feed into the calcs for profit, or just into the calcs for cashflow & assets ??

[clocktower] 12/5/2021 17:12

I acknowledge you may not agree S but food for thought anyway. In response to your comments about China etc the Story in itself is worth a premium and many folks would rather buy goods made in Ethiopia than in China I believe.

Another area I have not touched on the the Chamois leather that many car owners sill use.

This is an old video but interest all the same imo.

[clocktower] 12/5/2021 15:47

Just take a look at the impressive list of brand partners:



You may recall I posted about Vivobarefoot brand,this was started by members of the Clarks family and its well worthy taking a look at their accounts on the Companies House Website and see how they are growing as well. Some of the shoes as shown in one of the video I posted are being produced in Ethiopia.

Happy days and rich rewards ahead imo. DYOR.