This is quite a concern
" whereas sales in the first two weeks of January are down 13% compared with the same time last year, with the downturn in consumer confidence being most significant in the UK, our largest market."
A 13% fall in sales if this was to continue would concern anyone. |
I think I warned about the company a year or so ago and was lambasted for doing so !
It's extremely expensive employing a contractor these days due to lack of skilled workers and then you add on cost of materials and it gets beyond the average worker to get a job carried out.
You also have little growth in the economy and then it isn't surprising profits have collapsed and the trading statement outlook doesn't inspire. |
If you back out of the £10m licensing, which will be nearly 100% GM and accounts for £10m sales, SDG is losing cash and profits on the rest of the business.
There is no one with the necessary business background at the NED level and there is a pay problem with the Chair on £120k and the CEO taking home £600k.
Glad I'm not a shareholder and just hoping that CFX gets the chance to pick up some of the brands at bargain prices. |
Wasn't the original forecast for adj pbt £7.5m?, so given today it's now forecast to be 40% below that (mid point), then surprised this hasn't fallen further. Looks like folks believe there's value now possibly - IMO value trap. |
What a surprise!
In post 2030 I suggested that the current designs did not excite me - whilst acknowledging the subjectivity of that view.
Today's RNS blames external issues causing the disappointing results - but could it be that the designs are just not hitting the commercial spot?
"....a recent worsening of trading conditions
....downturn in consumer confidence being most significant in the U- and a fresh K, our largest market
....Subdued customer demand, particularly for fabric
....Softness in the contract market at the end of the year,
....Expectations of an improved trading environment towards the end of the year have not been realised"
So not their fault - of course!
Time for a shake-up and a serious review of the group's offerings and perhaps a broadening of the defined market.
And explaining the cash drain of £11m by citing specific items of £5m ..... sounds like a lot of unsold stock might make up some of the difference. Design or just "the market conditions"? |
Does it have influencers on TikTok? If not why not? |
Their cash pile is whittling down.
Neither would I have much faith in the expectations of cash building in H2.
The lack of Any BOD buying following the last 2 updates appeared ominous. |
Was tipped as a buy at the weekend too lol. Well done to them. Not |
I agree about the wrong management team.
As a CFX shareholder, these results are a curate's egg: we'd obviously like to buy some of their brands out of distress, but we also need their wallpaper manufacturing. |
I'm glad I got out when I did! The red flag for me was moving to a new HQ. |
Well what a surprise, eh - Not.
As I've mentioned now for well over 12 month, the business needs a restructuring specialist appointed either as CEO or in a new COO position. |
Management has no clue and doesn't adapt to the changing circumstances.
There still thinking in "luxury product" terms, whereas it's clear for all to see that this isn't luxury.
Luxury has a lot higher EBITDA margins than 8-12%...
Their luxury strategy failed miserably.
This also contains the opportunity : there's a lot of luxury fat to be cut for someone who manages this company in a rational way. |
Design and "taste" is subjective - but visiting the SDG web site for the first time in ages, I was very disappointed. Nothing "inspired" and no "wow" factor on the landing pages any of the collection of brands. But - of course - that is subjective view.
It seems to me that there might be "closed-circle bias" happening here.
From a business point of view, it is generally accepted that you need to concentrate on the likes, desires and whims of your target market audience. Perhaps that is what they are doing - but has the management identified a large enough target market?
Fresh (and hard-nosed) senior management is probably required. At present there seems to be too much "Bambi" and not enough "Banksy".
As others have suggested, this company needs a shake up if it is to exploit the heritage of the brands and manufacturing potentials. I've lost too much on my small holding to care very much - my guess is that one day it will probably be acquired.
Just opinion and as ever, DYOR. |
Is this company really only worth 30 million plus cash? ( 8.5 million) an asset stripper should have a field day here - I think they paid about 40 million just for Clarke and Clarke a few years ago - the board have a lot of explaining to do at next update |
salverAgree, something needs to change - would start by getting rid of LM. |
All good points Discothere are so many angles you can approach this one from-all I know is something major needs to be done |
salverCould be a cyclical low in terms of profitability but somehow I don't think so. It's only licensing that's keeping it profitable. If it was stuffed full of assets / brands that folks wanted then their income growth would IMO reflect that but it doesn't.As posted before, why acquire the IP when you can buy on licence as and when demand is there. Remember H&M (significant licence not renewed - from memory think it was H&M and for £4m-£5m?). |
Apologies for that I was trying to kill two birds with one stone -if you strip out Colefax cash it is on a pe of about 7 - too cheap in my opinion- as to SDG which has a very similar market cap it is also cheap as it is stuffed full of juicy assets and as a direct comparison should on a pe of 7 ( ex cash) be making about 5 million after tax which even they should manage to do - hopefully this will be a cyclical low |
My best guess is the next statement may be exceptionally ugly, with another downgrade to FY expectations (speculation on my part, but that's what I expect). |
Your post below mixes up the assets of the 2 companies and doesn't make sense ? Are you saying CFX is cheaper in terms of assets backing / balance sheet? |
Although the site is grade 2 listed would make a good housing development in centre of Lancaster - you can get a lot on 9 acres |
Industrial land is worth what other industrial buyers are prepared to pay and that is not much at the moment. I add agree SDG is very cheap. |
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