Sosandar Share Discussion Threads

[paulypilot] 21/11/2018 13:15

Hi DD,

Yes I agree, it is hard to pay up-front for future growth.

I think you have to be really sure that the growth will actually happen.
That means needing to meet management, and properly understand what's driving the business - e.g. product design, marketing, market niche, competitors, etc.

The reason I like eCommerce businesses is because you can monitor how product is selling (by looking at how fast things sell out), can conduct your own market research (I always ask my middle-aged female friends to look at Sosandar's website, and they've ALL raved about the products), follow social media (followers & comments), etc.

I did very well indeed on BooHoo and Gear4Music, so this is the next one I reckon should do very well, long term. For now though, the valuation is probably fair. So I'm not trying to talk it up, more to correct some of the incorrect perceptions people have about this business.

Cheers, Paul.

[bg23] 21/11/2018 12:41

Paul,

Many thanks for your analysis and your efforts in explaining your thought process in respect to SOS.

I too am a holder, (although very small in comparison to yourself), mainly due to my wifes positive reaction to their catalogue last year and her shopping, buying and product experience with the company.

looking forward to seeing further proof of sales, income and profit growth over the coming years.

regards.

[discodave4] 21/11/2018 09:24

Last post, it was 3:1 going out so at least it's getting better.There you go, whoever is paying for the privilege of thumbs down, knock your socks off..........unbelievable tbh.Seems like this board will only be for those who only want to look through rose tinted glasses. Will check out the other board, it may actually provide some well needed balance.DD

[discodave4] 21/11/2018 09:13

For every £1 of sales £2 goes out of the till...........not liking that!.

[tsmith2] 21/11/2018 08:47

burning through cash...P&D

[discodave4] 21/11/2018 08:46

Mmmm........I hold but not convinced by their margins, as for admin expenses, they are ridiculous and have been from day one.To compare with Boo's early stage margins, their gross margins were in the low 60's%, their EBITDA margins were 10%, they were profitable. Don't doubt SOS will beat rev forecasts but their margins are not high enough IMO for them to be turning a profit anytime soon, but wtfdik.DD

[paulypilot] 21/11/2018 08:44

Directors remuneration - fact check.

Here is a screenshot of the actual Directors remuneration from the 03/2018 Sosandar Annual Report:
(I just created that screenshot link, so it's safe to click on)

As you can see, the big remuneration was Adam Reynolds & co, relating to the cash shell pre-Sosandar. None of that will recur.

The current run rate for Dirs remuneration is low, as you can see in the screenshot in the "from 2 Nov 2017" column. That is the date of the cash shell turning into Sosandar.

Run rate now is;

Ali Hall & Julie Lavington: £88k p.a. each

3 NEDS on £30k p.a. each

Adam Reynolds £60k p.a.

Total Directors remuneration currently is therefore actually £326k p.a. + £17.6k pension contributions for the 2 CEOs.

So it's nothing like the £1.2m historic level, which was a one-off in FY 03/2018.

It's frustrating when people post uninformed garbage, as post 1130 above. Try doing some proper research in future perhaps?

Regards, Paul.

[gheebee] 21/11/2018 08:31

and what's left after board pay goes to pay for product placings by social influencing celebrities.

"Sosandar clothing continues to be worn regularly by an ever-growing list of celebrities and social influencers including Denise Van Outen, Tamsin Outhwaite, Rebecca Adlington, Charlotte Hawkins and Laura Whitmore."

[croasdalelfc] 21/11/2018 08:28

Not concerned about £2m in salaries by the board? Year up to March

[gheebee] 21/11/2018 08:18

Loss so big, returns so high, both will come down. Two out of these three are facts and one is wishful thinking.

[telbap] 21/11/2018 08:02

Harva, May peeps said this about ASOS, still barely making money given the huge revenue.

[toyin] 21/11/2018 07:56

Gheebee. Seriously, stop your looking a fool. Do a bit of digging and you will see why the loss was so big, you will also find out why returns were over 50% and you will find out why that will come down.

[yump] 21/11/2018 07:50

Isn't savvy usually a word used for those who shop around spending £20 worth of their time to save £5 and who know the price of everything and the value of nothing ?

[gheebee] 21/11/2018 07:49

I found three clues! EBITDA loss of c£2m in six months, over half stuff returned and a long term horizon for an AIM listed company. The rest is the noise of desperate pumping.

[michaelmouse] 21/11/2018 07:46

"People complaining about valuation, etc, haven't got a clue. Just roll the numbers forwards, with triple-digit % revenue growth, and 55% gross margins, and you arrive at startling profitability in 2-3 years. That's what savvy investors have spotted."

You're already paying years in advance for that growth. It's a pure speculation. Savvy investors indeed! Arrant nonsense more like.

[paulypilot] 21/11/2018 07:45

I should add that this share has scarcity value - there is no other small, hyper-growth eCommerce fashion business on the UK market.

So once the Instis spot this, expect to see a much higher valuation.
I've no idea on timing though - this is just a buy & hold forever share for me.

The price volatility is a nuisance, but we just have to live with that.

Regards, Paul.

[toyin] 21/11/2018 07:45

paulypilot, agreed they will definitely beat £3.9m.

All the best

[paulypilot] 21/11/2018 07:39

Figures in line with expectations.

They should smash the full year (FY 03/2019) revenue forecast of £3.9m (Shore Capital), because Oct-Dec is a huge seasonal peak in womenswear.

H1 revenue is already £1.84m, which included quiet summer months when it was too hot.
So broker forecast implies only £2.06m revs in H2, which is crazily low given that Oct-Dec should show a massive uplift. By my calculations, revenues should be up to £5m for the full year. At 55% margins, that's excellent operational gearing. Then you're probably looking at £10m+ next year, and breakeven-ish.

People complaining about valuation, etc, haven't got a clue. Just roll the numbers forwards, with triple-digit % revenue growth, and 55% gross margins, and you arrive at startling profitability in 2-3 years. That's what savvy investors have spotted.

Very encouraging commentary, including positive noises about sales of current season styles. That augurs very well for peak trading in December.

Gross margin of 55% is astonishingly high for such a small business.

When it IPO'd, I questioned management on how realistic it was to target £3m revenues this year (original forecast), which looked a tall order. They said they were confident it could be done. Now we're heading for a substantial beat against the original forecasts.

It's all going extremely well. I'm glad they did £3m placing now, as it removes any concerns about running out of cash.

Just my personal opinion, DYOR as usual.

Regards, Paul. (disclosure: large long position)

[toyin] 21/11/2018 07:36

You boys haven't got a clue, why don't you go and do something productive!