Section Items

Clarification
The comments on this page are some of the thoughts that I had when considering this company and not a recommendation to take an action or to refrain from taking an action.

As you know we have no information about your circumstances, understanding of your investment goals or the level of risk that is acceptable to you. So it would be completely unreasonable to read these commentaries as recommendations.
Is This Just Pump And Dump?
I may or may not own the shares which have commentaries on this site.

Commentaries tend to be created when I look at a share and decide if it is one that I want to buy either now or when I next have an unallocated pot.
Financials
As companies often report numbers in slightly different ways there are a number of entries to cover this and as these are rough notes there will usually be empty items.

The debt columns are shown as positive values if there is any debt, all other negative values are shown within parenthesis and without a sign.

Commentary On Ted Baker

Title: Ted Baker – Up And Down Over The COVID Period
Company: TED - Ted Baker
Share Price Then: 128p
Author: Ian Smith
Date: Mon 01 Jun 2020
Comments: A while back Ted Baker announced issues with over valued stock, a shortage of cash and then COVID came and shut down clothing retail along with the funder, Ray Kelvin, being ousted for “hugging policy”.

All this bad news has taken the share price down from around 1100p six months ago to 116p today, so are they now a bargain or correctly priced?

Year ending Jan 2020 shows a tiny reduction in revenue, from £640m to £630 but a swing from a £30m pre tax profit to an £80m loss.

£84.6m of non-underlying expenses, mainly comprising total charges of £45.8m related to inventory, £16.2m related to impairment of store assets, £7.6m related to losses on the disposal of the Asian business and £6.5m for legal and professional costs. In addition, the application of IFRS16 for the first time introduced charges of £5.0m

These results have been followed up with a rights issue and open offer for £95m and possibly another £10m, at today’s price of 138p this is 1.5 times the current market cap. The shares are being offered at 75p which is very roughly 125m new shares, there are currently about 44m shares in issue.

The group has a net debt of £127m of which £72m will be repaid by the sale of its headquarters, although there will be a £25m increate in borrowing and the share issue will go into the nebulous categories of £6 million for an upgraded e-Commerce platform, £31 million for trading and working capital, £24 million for refinancing and restructuring the business and £29 million for other capital expenditure projects

Interest payments were around the £15m mark.

Post share issue prices are hard to predict but does this mean a post issue price of 35p discounting the new investment as it is not really buying anything tangible? Maybe 75p the price that those already hold paid for the new shares?

If we look at Aston Martin who plunged for around 1,800p a few years ago to a current price of around 60p after a share issue at around that price then a rights issue at 30p its pretty clear that prediction is hard.

Admittedly Aston are loaded with debt and are relying on a new the DBX to save the business whereas Ted Baker will have manageable debt but are also relying on reviving their business.

The real question for me is whether or not the company is just another clothing brand that got lucky and its time has now passed or was its founder inspired and the brand is capable of recovery.

The company certainly hasn't seen a collapse in sales, but even after successful years it has had to come back to shareholders and ask for more money.

Looking at Superdry another clothing retailer where the share price is a tenth of where it has been for the last few years it is very unclear that recovery is possible once the brand loses its image. Mike Ashley swooped in on Jack Will but in this case it was never clear if there was an intention to revive the brand or just a short term gain from getting cheap stock.

The new shares will b
Financials:
ItemCurrent PeriodPrevious Period
Year20192018
Period12 Months12 Months
Revenue£630m£640m
Earnings
Adjusted Earnings
EBITDA
Adjusted EBITDA
Statutory Profit(£80m)£31m
Adjusted Profit
Total Debt
Net Debt
Read Count: 4

Commentary History