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In case anybody hasn't heard:-Studio Retail Group Plc - In Administration (“the Company”)
Company Number: 00549034
Daniel James Mark Smith and Daniel Francis Butters were appointed Joint Administrators of the Company on 24 February 2022. Shortly after the appointment, the Company suspended the listing and trading of the Company’s ordinary shares.
Following application by the Company, the Financial Conduct Authority has cancelled the listing of the Company's ordinary shares on the premium segment of the Official List and the London Stock Exchange has cancelled the trading of the Company’s ordinary shares on the main market for listed securities maintained by the London Stock Exchange, in each case with effect from 08.00 am (GMT), 25 February 2022.
As such the shares have no value and there will be no distribution to the shareholders.
Details of the sale of the company’s shareholding in Studio Retail Ltd to and certain other assets to Fraser’s Group were published to the Companies House database on 9 March 2022.
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I’m not sure it is very fair to compare studio to Debenhams, one is still forecasting to make near their record profits for the year and the other was a department store plagued with high lease costs as customers were moving away from physical stores.
I think people are jumping the gun here, the rns states they are intending to appoint administrators, but it is a few days on now and still no confirmation that they have actually entered into administration which should tell you that something is going on in the background.
I suspect there will be a resolution on this tomorrow, or if not by Friday at the latest. If a company is making £30m a year and realistically can be picked up for £100m or less even with short term cash flow issues there will be buyers rubbing their hands together and queueing up. All parties involved will be trying to avoid administration in this case.
This will either be sold as a going concern, or there will be some form of equity financing deal agreed. I don’t think it will even reach administration.
People see the term administration and think of high profile cases like Debenhams and think that means it is the end, but that’s not necessarily the case especially when a company is profit making and still has substantial net assets excluding intangibles.
I’ve no position here although I did consider it at times, If you are a shareholder you will no doubt end up having to take a hit, but if you are an employee worried about your pay check I wouldn’t be too concerned personally.
Debenhams was a disgrace. Refused any offer by Ashley and the brand was bought out by BOO. The employees lost their jobs and pensions and will go into the lifeboat scheme which pays out about 50% on average over the pension term (90% at start but no or very small yearly increase so it falls away quickly over time
He did try do exactly that with Debenhams (save the company for all shareholders). Often there are too many parties with diverging interests....Directors, Bond holders, banks etc. Quite often a pre-pack is already agreed and no competitive tender is held.
Ashley is astute. He may take the company into the Frasers Group fold, but he'll do it cheaply and certainly won't be bailing out existing shareholders imo.
This is a strong business, all it needs is one offer from PE and that will make Mike Ashley to act. If you sold parts of Studio now you will get a lot more then £100m. Just my thoughts.
I think I’d be interested if I worked at Studio and wondered where my next pay check was coming from
Do I remember rightly that Ashley made an offer for STU a while back, but the BOD and some shareholders refused saying it undervalued the company?
I’m not an investor with this share, however Mike Ashley Is currently at their head office
I cannot see this going broke over 25 M. I can see the shareholders being shafted as the company is sold for very little.
No holding but have been in this before....sold out on the last spike. Luck .....but it does show how smaller underfunded internet stocks have been hit. The banks said no. Interest rate rises?
Not invested but was on my watchlist probably gonna get bought by mike ashley at a significant discount unfortunately
2 questions though
Why on earth did it let its receivables grow so big?
Why wasn't it trying to chase down payments?
If you sell Studio you should get a lot more than £100m mcap - it makes £30m a year profit and has 2.3m active customers and 1.3m of them are credit customers. Let's see.
Morning CHR155, I would hazard a guess that we will next hear from this board sometime in April with an update on funding as part of a financial year end post close trading statement. It is worth noting that the eight members of this board received a total combined remuneration of £3,207,000 up to 21st March 2021 but not one of them has bought a single share in the company since last April.
Agreed, hell. I was shocked at the huge drop, but the fundamentals are still solid. This one's a keeper and I won't be selling.
Yes, long story short - Studio is in much better position than it was when 161p offer came out. I am planning to wait for a year or so for 300p - this is quite a strong online business so expect a strong sp bounce!
161 pence per share in March 19, unanimously rejected by all other shareholders.
Mike Ashly buying more, I wonder why!
Thanks. I am a surprised they need to borrow money to fund an increase in working capital simply because they need to hold a bit more stock.
Not worried about debt, this is an online business generating £30m-£40m profit year in year out. It has customer base of 2.3m with 1.2m credit customers. I cannot believe MM took the sp this low. I am confident of double the sp in a year. In FY20, profit was £28m and sp was 220p. FY22, profit is forecasted at £30m and SP is 99p. I mean WTF!
There was value in this yesterday, NOW there's even more value in it. @unhooked, think the paragraph you copied and pasted speaks for itself.
Can't believe this went down to circa 92p! wtf! Well oversold. Read the RNS carefully, there's nothing much in there wasn't already known. Will buy some more if I can in the morning, and just sit on it.
Nice one, hellyeah.
Anybody concerned about the debt? In the statement they say:
"We are exploring a range of options to meet the resultant working capital funding requirement, including discussing the current level of our working capital facilities with our long-standing UK lenders. Studio currently has a fully drawn revolving credit facility of £50m and, with a 12-month EBITDA of c.£50m, is well within its key gearing covenant of 1.75x."
World has gone mad, way oversold. Effectively c. £90m market cap for the business that is producing £30m profit. I doubled my holding and put this in the bottom drawer just like AO, Boohoo, Mitie, Revolution Bars etc. These stocks will be back in favour, until then back in the bunker.
Or soon to put in another low-ball offer?
Very quiet board, given what happened today.
Everybody in their bunkers?
Myself, I'm surprised at the extent of the decline considering it was all pretty much telegraphed in the statement of 25th November.