Shoe Zone Share Discussion Threads

[thecroots] 20/5/2022 10:11

That 136k trade surely has to be a delayed buy? (Could be a sell but very unlikely at that price)

Theres no way you could sell that volume at the minute...

[simmsc] 19/5/2022 22:52

Great minds think alike :) it's concerning to watch market drop (and everything (good or bad) being dragged down with it) but I'm staying long in shoe for now. Been long since the COVID lows

[bountyhunter] 19/5/2022 19:03

Interesting, I said something similar yesterday in post 1746 including a barefooted comment!

[simmsc] 19/5/2022 18:43

Seen the write up. Very positive indeed.


I am not going to copy and paste comment here as that is unfair towards Stocko subscribers.


But he praises the company in almost every way possible: P&L, cost management/margins, balance sheet, short leases, divis (and prospect of special divis), turnaround from lows in pandemic, the list goes on


The two interesting things he mentions are, namely:

- H2 seems to always be MUCH stronger than H1 for SHOE (so upside risk is that we have an even better next half (H2) to come)


- He raises the question if SHOE will benefit from cost rises (inflation) or not? (he says this is debatable and the future will basically tell)

Argument for: People more likely to buy cheaper shoes if they need to save money to get through the difficult times that potentially lie ahead.

Argument against: SHOE customer base largely made up of low income households who will be hit the hardest by inflation (11% rather than the 9% headline) so that could mean that they may be forced to walk around barefoot (my words, not Pauls).


The reason I threw in the "barefoot" comment is kinda me saying that they will not end up walking around barefoot, and that they will need shoes and that they will go for the cheapest option ... which just happens to be SHOE. So I am on the "Argument For" side.

[thecroots] 19/5/2022 18:06

Might explain the flurry of buys late on....

[bigbigdave] 19/5/2022 16:14

Apparently very positive write up by Paul Scott at Stockopedia today, not seen article.

[edmundshaw] 18/5/2022 13:43

Long (onerous) leases was what did for Debenhams. Shoezone have completely avoided that trap, being the beneficiary of falling rentals rather than the victim... OK different businesses in many ways, but Shoezone is far more nimble...

[fegger] 18/5/2022 09:30

and on renewal store lease average 37% reduction in costs so stores they retain are much cheaper to run too

[thecroots] 17/5/2022 17:41

Eezymunny,

You are forgetting that the amount of stores has drastically reduced. We have 388 stores now and interims posted £70m in sales. Take 2019 interims for example, there were 495 stores and sales of £72m. 107 stores less but with only £2m less sales!!!!

Sales per unit are far higher than 2019 and thats going to be the driver....

[bountyhunter] 17/5/2022 11:19

Fair point fegger although of course the pension surplus is an aside to the more important positives, no debt, dividend resumed, back to profitability despite 2 years of pandemic with even a special dividend and buybacks on the card. H2 should see even more people heading to ShoeZone to buy cheaper shoes so I'm with management on this one who are doing a great job. Plenty to look forward to.

[eezymunny] 17/5/2022 10:50

bountyhunter or any of the rampy bulls...

How much do you think the resumption of business rates will cost?

[fegger] 17/5/2022 09:48

Bountyhunter those Defined benefit pension schemes are closed. Therefore only a proportion of employees will be in them. Therefore probably wont do a contribution holiday as would not help all employees - could be divisive

[bountyhunter] 17/5/2022 09:24

Agreed tc, if ShoeZone can't make a profit when most of the population need to buy cheaper shoes than previously i.e. at ShoeZone not Clark's etc then we will all be walking round barefooted!

ShoeZone are doing well once again now that the pandemic is nearly over that all debt has been cleared, the Divi restored and a even a special Divi or buybacks are on the cards. There's not even any pension scheme problem with a massive surplus! Maybe they will declare a pension contribution holiday for employees to further motivate them on top of the impressive return to profitability and dividends despite having gone through tough Covid times.

[eezymunny] 17/5/2022 08:53

Errr half year revenue is below 2014,15,16,17,18,19, and only above the recent half years when shops were shut for covid!

A huge extra costs (biz rates) will resume in H2.

As I say, could well be loss making as consumers retrench...

[thecroots] 17/5/2022 08:43

Lol. What with sales increasing and profit margin not reducing thus far?

If shoezone cant make a profit we are all screwed.!

[eezymunny] 17/5/2022 08:22

Hmmm precious little adj cash flow now that capex has resumed. And with with full biz rates resuming, consumers under pressure, I reckon could be loss making in H2.

[fegger] 17/5/2022 08:15

Excellent results. One interesting point is the surplus on one of the pension schemes which has increased to 6.9 million 'We operate two closed defined benefit pension schemes. The deficit for the Shoefayre Limited Pension and Life Assurance Scheme reduced by GBP3.0m to GBP2.9m (2021 YE: GBP5.9m) and for the Shoe Zone Pension Scheme the surplus increased by GBP1.0m to GBP6.9m (2021 YE: GBP5.9m) The reduction in deficit and increase in surplus is due to an increase in bond yields which reduces the value placed on the scheme's liabilities, offset by lower than expected investment returns and a rise in future inflationary expectations.'

I know pension scheme accounting treatment can be different to actual real life situation but does anyone know if a surplus is returnable to the Company?

[bountyhunter] 17/5/2022 07:52

I missed that last paragraph re a potential special dividend, well spotted!

"At the last year end we had an outstanding CLBILS loan balance of GBP4.4m, and under the terms of the agreement the business was restricted from making any dividend payments whilst there was a balance outstanding. We have now fully paid off the outstanding loan balance and the Company is therefore now eligible to recommence dividend payments in respect of the new financial Period. The Board therefore proposes an interim dividend of 2.5p per share. The interim dividend will become payable on 17 August 2022 to those shareholders on the Company's register as at the close of business on the record date 15 July 2022. The ex-dividend date is 14 July 2022. The Company will otherwise continue to review management of its cash resources which may include special dividend and/or buyback programme, details of which will be announced in due course."

[ny boy] 17/5/2022 07:52

It’s been a great buy since the 60’s, the shoe fits! Check in later in Q4 for further fab progress

[thecroots] 17/5/2022 07:50

I know. They know how good big box and hybrids are to be doubling their targets so soon!

[18bt] 17/5/2022 07:46

Better than expected for me. I like the acceleration of change - they should be well positioned in the less cash to splash environment.

[thecroots] 17/5/2022 07:42

Plus possibility of special dividend/buyback or both.

Details to be announced in due course

[thecroots] 17/5/2022 07:12

Blimey they want to double hybrids and box stores to 200 and 100 respectively. They said the results of the conversions have been very positive.

Obviously spending a bit to convert them (affecting net profit) but it will be worth it in the long run.

Results are fine for me with container prices not impacting GP as much as i thought.

[bountyhunter] 17/5/2022 07:12

An excellent set of results with the dividend restored.

...interim dividend of 2.5p per share. The interim dividend will become payable on 17 August 2022 to those shareholders on the Company's register as at the close of business on the record date 15 July 2022. The ex-dividend date is 14 July 2022.

[bigbigdave] 16/5/2022 09:46

Results tomorrow