Lspoon1
27 Nov 2014
Re: Lspoon1 DDPI am big enough to accept that I made a mistake in a previous email about the timing of my first post. It was a hasty response to a typical cheap Shorty email. I should have been more considered.However, as you will appreciate from the last 2 years, I am the only contributor to this Board who gives any considered input to the performance of FDL. I don’t see the point in the old arguments such as
i) N Brown is worth £750m so Findel must be worth £750m; or(ii) FDL used to be worth £500m so the target price is 400pThese are ridiculous arguments like those used at the time of the dot.com crash where investors kept averaging down despite share price falls of 90%.My views on Findel are based on a fundamental analysis of its businesses. If you think I am wrong and have a reason, please set it out, we should all be aiming to learn from the views of others.The following is my take on yesterday’s announcement1) No matter how many times the Board re-iterates its 7% - 9% operating margin guidance there must have been significant institutional selling yesterday to drive a 16% fall. A fall of that size is in ‘profit warning’ territory and there has been further slippage today rather than the bounce you would expect for an oversell(2) Express Gifts – It would be interesting to know what is behind the £2m provision for ‘legacy issues’. If this relates to the £15 cap on late payment charges will there be any impact on future earnings as this has only recently been introduced.Sales were also flat in October and November.(3) Findel Education – It is often helpful to look back at what has been said historically. Comments on Education have been: ‘turnaround well underway’‘the much improved customer proposition’ ‘we have again focused on improving the overall product, price and service proposition’In this year’s report the team also confirm that the business is 2 years into a period of above average pupil growth (3% p.a. 2012 – 2017).Despite previous positive comments and a positive market the team states that ‘competitor activity has intensified’. This phrase can only mean that the business has lost market share. Overall I would say that against this backdrop a sales decline of 5% accelerating to 7.5% in the last 8 weeks is a cause for concern.(4) KleenezeLast year comments on Kleeneze were: ‘Stablising’‘New Management Team’ ‘A redesigned proposition, including product range, product pricing, and catalogue design and structure’In fact, in every interim and annual report for the last 4 years there has been some statement about performance improvements due to a ‘new distributor initiative’ or ‘change in product mix’.Cutting straight to the point for Kleeneze, sales were down 24%. This is not a blip as it has continued for the last 8 weeks also. This has to point to a catastrophic failure of the business model.Kleeneze is a multi level marketing business (MLM). MLMs are generally only good for those at the top of the organization. They prosper by continually recruiting at the bottom end and building their own distribution network on which they earn a %. Most MLM’s sell a product over which they have some sort of control such as cosmetics, health, perfume and so on.Kleeneze sells products which you can buy from any supermarket or generally on the internet. Its relative size will mean that it will be unable to drive the same discounts from its own suppliers as the big players. So in summary it is selling commodity products without a price advantage.In my view, once the business starts to implode how can you stop it. I would be looking for management to be setting out a plan for this rather than trying to sweep it under the carpet by emphasising the high level of variable costs. This business has a turnover of £45m and 25% - 30% of the fall in sales seems to hit the bottom line. If the business is in terminal decline this will reduce group
delta delta papa
26 Nov 2014
Re: Lspoon1 You have proved yourself absolutely incapable of remembering your previous posts. Your opinion therefore means nothing to me. Please do not post here again. You are a parasite of humanity. Go away forever.DDP
Lspoon1
26 Nov 2014
Re: Lspoon1 Kerching!!!!Sorry Shorty I know you were worried about my whereabouts. I can now confirm I have been busy pushing my wheelbarrow of cash down to the bank to deposit the gains from shorting Findel.I could post a more detailed review of the underlying fundamental issues with FDL but as a general rule posters seem blind to it.That said, for those of you that do listen, beware the impact of the recent £15 cap on default charges for payday loan companies. FDL used to charge £20 and have just made a very vague £2m provision to 'cover redress against legacy issues'. I estimate that today's close of 197p is very much closer to my view on fair value of 150p than some who have previously argued 300p+.........I'm just saying.....
IB Investor
26 Nov 2014
Re: Depressed It used to be unknown for them to make a profit in the first half, so this is good news. Of course the product mix is very different from a decade ago. Christmas should be good as retail spending goes up. Kitbag seems like it might even make a profit. Kleeneze - get rid, or shut it down - it has had its day - overtaken by the Internet. They are still uncovering some accounting errors from the old days, and a lot of the recovery may be in the price but it is always Christmas that makes them. It has taken them over 5 years to get back to where they were 10 years ago - it just goes to show what a mess the old management created.
Kronom
26 Nov 2014
Depressed really not taking well the drop from today... takes weeks for the stock to go up... and every gain gets wiped out by a small negativity from the performance reports...The volume is also way too low to affect the price to this degree...
shorty3
22 Nov 2014
Lspoon1 Where art though?
