Sosandar Share Discussion Threads

[thetrotsky] 14/1/2021 11:51

I think, although anticipated in my post at the beginning of December, the results were nevertheless disappointing; I would have hoped for revenue growth in excess of 10%. We may never know but I suspect the government, correctly, reducing Xmas from, what would have been in essence, a four day "free for all" to a one day "extravaganza" at the 11th hour probably didn't help and probably did contribute to some of the returns (ASOS and BOO no longer choose to disclose but I don't think SOS's returns are any worse than the industry at large).

APAD's income analysis (care of another party), comparing the average for the first six months with the average for the last 3 months in intersting until you do the same exercise for 2019. The reality is that Q3 was disappointing but in the current context perhaps better than we could have expected post-Covid; pre-Covid we'd have probably been aiming to, at least, double sales year on year whilst at the same time incurring a significantly higher marekting spend.

The reality is that we are, at best, treading water and need to increase our customer base as cost effectively as possible, at least until Covid is behind us. That appears to have been difficult to do since mid-2020, so it will be interesting to know many new customers were garnered in Q3 using their new minimalist, marketing approach and whether those positive results can be repeated in Q4 and beyond (they said the results were very good but haven't disclosed any customer figures to substantiate that as yet).

I'm currently aiming for FY revenue of around £11.5m; I think that the government's volte face rather put a kaibosh on December sales and am aiming for a more bullish 30%+ increase in Q4 sales year on year.

PS. Did anybody else miss the error in the latest update? 6%? More like 4.7%!

[thelongandtheshortandthetall] 13/1/2021 18:21

Maurice and APAD.
Great posts

[mauricemonkey] 13/1/2021 18:16

Yeah, that makes sense. I agree it's going to be a slog for the company until Spring.

Thanks for sharing.

I think that one thing that has been overlooked maybe - for the "quality" retailers, volumes must've taken a bigger hit than the cheaper retailers, and I say this from a purely practical point of view. At the start of lockdown 1, I bought some new clothes and shoes, I just haven't worn them much, and being good quality they still look brand new. I spend most of my days in older, but still good quality clothes that aren't "best", I wouldnt wear to the office or to the pub but are perfectly fine for WFH, Teams calls etc. Those that buy from the cheaper brands, well, their clothes are going to be wearing out at the same rate and will need replacing every few weeks as normal, so I think some of the results need to be viewed in that context too..

[apad] 13/1/2021 17:46

Posted this elsewhere, maurice.

"I'm trying to understand the Sosandar revenue story. I think this makes more sense than the rns headlines:

1. 6 months April to end Sept. 2020 revenue of £0.71m a month (caveat, September revenue twice the average for the previous 5 months).
2. 3 months Oct/Nov/Dec revenue £1.32m a month 86% increase (note, December revenue equal to Sept. revenue).

I think this is a better picture than Oct/Nov/Dec being 6% up on the same period in 2019. Not only was that in a period of large marketing spend, it was pre-covid.

We are now in lockdown, so it will be hard yards until the spring. So, the likely rns in March is unlikely to report significant progress."

apad

[mauricemonkey] 13/1/2021 17:39

Well, personally, I think the new ex-Regatta FD is starting to make his presence felt. Marketing costs slashed yet sales up 6%.
As a retailer who focus mainly on sophisticated workwear, evening wear and partywear they've done really well to weather the Covid storm and there's going to be huge pent up demand for their core markets once offices re-open, pubs are bars are back in play and the party / wedding season gets going.
I can see a lot of people going to a party every week and wanting a different outfit. Given lots of people have gained / lost lots of weight over lockdown, there's going to be plenty of people who simply don't fit into their old clothes who will have saved a few bob over the last year too.
Still 50/50 whether they ever reach enough sales velocity to cover the marketing cost, but I'm long with a fairly significant (for me), holding.

[energeticbacker] 13/1/2021 17:06

Featured in today's Investor's Champion update –

Sosandar appears to be doing fine, but the valuation (Mkt cap £30m at 16p) still looks somewhat bonkers to us given the modest revenues and continuing losses in a very competitive environment.

[hotaimstocks] 13/1/2021 14:44

hopefully Paul pilot will save us and come out with some c & ball to rise back to 20p lol... poor results

[bg23] 13/1/2021 14:33

I thought it was a reasonable update this morning, record Q, good traction via Next and John Lewis, flexible product range and broadening product ranges.

apparently :

1- the market was looking for mor
2- the market believes there will be a further fundraise required
3- the stock is poorly followed by PI's (otherwise there'd have been other postings here)

hohum, still a happy holder

[discojames] 13/1/2021 14:22

Yes I took a position here today, ignore the poisonous little trolls like John, every board has one. Only ever disgruntled ex holders or would-be holders (if they can get the price down enough)

[swanvesta] 13/1/2021 13:42

60% fall in EBITDA loss seems diappointing considering marketing spend was 10% vs last year. Perhaps margins are down with incremental revenue coming from Next etc?

[ny boy] 13/1/2021 13:00

Lolz

Obviously some bargain hunters have taken your posts into consideration 🙄

[onjohn] 13/1/2021 12:31

must be complete pain when 48pc of all parcels come back

lot of refunds to process

[onjohn] 13/1/2021 12:20

They are going to get so many clothes back, they then lose the packaging and post cost s i presume and then have to spend money having some one disinfect

[onjohn] 13/1/2021 12:02

0 1 1
Looks a dog

Cash starting to get depleted

· Net cash of £4.30m as at 30 September 2020
· Net cash of £3.90m as at 31 December 2020, flattered by deferring VAT to HMRC

So £400,000 burnt in three months , with the marketing back on it would be £2m burn.

When they handle the returns (big sacks of stuff going back) more cash is going to go out of the door to repay customers

48% return rate lol

[ny boy] 13/1/2021 11:56

Ignore the short term noise, the sector is very much in focus, bargain hunters around before lockdown ends.

Strong pent up buying demand especially from the age sector SOS caters for


Takeover target imo

Dyor

[johnyo] 13/1/2021 11:32

They can't seem to get grip of operating costs !Maybe I am wrong,but the impression I get is that's it's like a social club all to nice with extremely low productivity and clueless management

[onjohn] 13/1/2021 11:31

Looks a dog

Cash starting to get depleted

· Net cash of £4.30m as at 30 September 2020
· Net cash of £3.90m as at 31 December 2020, flattered by deferring VAT to HMRC

So £400,000 burnt in three months , with the marketing back on it would be £2m burn.

When they handle the returns (big sacks of stuff going back) more cash is going to go out of the door to repay customers

48% return rate lol

[ny boy] 13/1/2021 10:28

M&A activity building in the sector, these will be gobbled up on the cheap by a bigger outfit, 25-30p max offer imho I just bought a few for a medium term trade dyor as usual

[middlesboroughfc] 13/1/2021 10:06

Have they paid themselves stupid bonuses again too

[discojames] 13/1/2021 09:01

I'm buying in, expecting a strong bounce from here

[onjohn] 13/1/2021 08:22

They need a fire. That way they can turn a profit from the insurance money?

Hey manny, hows business? Business is bad but we had a fire last week. lol

[marmar80] 13/1/2021 07:42

Depends how much are they worth

[croasdalelfc] 13/1/2021 07:39

Hunkering down when online sales will never be busier? Looks like they weren't agile enough to move from party frocks and coats/shoes to stay at home lounge wear. I guess that's the problem will a micro company . 3 years on and modest growth. 3.9m cash has to spent soon on stock or mktg. btw £69 dresses selling for £17 in the sale ... that is huge discounting