Another month, another ...
HMV warning
it appears that profits will be lower than "expected" at £30mm for the full year. (after posting an interim loss of £41mm)
last year it made £74mm for FY, with interim loss of £18mm, so a profit of £92mm for h2, whereas this year it'll be more like £71mm.
There are a couple of "highlights"; that they have pushed back the test date for their debt covernants, one would imagine that is linked to their announcement on the 25th March that they are board were exploring strategic transactions for Waterstone's and HMV Canada.
The stock reaction is rather telling, its so low it doesn't care, so the Raven will add a few shares to replace the few that he sold when the stock popped on that previous announcement. It is hard to imagine that there is anything other than bad news already priced in...
Showing posts with label £HMV. Show all posts
Showing posts with label £HMV. Show all posts
Tuesday, 5 April 2011
Wednesday, 2 March 2011
Simon Fox - HMV's "Guardian"
CEO of HMV, joined the firm when the stock was at 130p, its now at 15p.
Not to overstate the case, but sharehoders have been decimated, well actually reverse decimated, as they have about 10% of their original investment left.
During his tenure, there has been a different head of the renumeration committee for different years, and a differing method for calculating performance awards, be that by changing the "peer group", the criteria or the conditions. The Raven is sure though that shareholders must be delighted to know that they had to match another firms offer for this superstar, in order to motivate him in his role?! what is 2mm of shares between "partners"?
When he joined in 2007 he had a total compensation of £333k, for 2008 he earned £992k, for 2009 £579k and for 2010 £874k.
What did shareholders earn?
2007 -33%, ouch and the FTSE did what?
2008 +29% almost back to break even yah, definitely worth a million quid...
2009 +3% still not at break even... hmmmm half a million?
2010 -44% almost a million again?
2011???? -82% and what will be looking at??
Thank goodness ITV didn't land this superstar, the Raven was long ITV, that would have been pretty nasty.
It is "interesting" though that a company losing nearly all of its shareholders' value has a CEO that also find the time to join the board of the Guardian, and the Chairman, to top that decided that joining M&S might be a good idea, only to discover that perhaps he didn't actually have enough time for both roles.
Just to put it into perspective, since he joined the firm shareholders have lost half a billion pounds, and the CEO has made £3mm but feels that he needs to be incentivized to turn the company around rather than jumping ship? Shareholders should have made him walk the plank.
Not to overstate the case, but sharehoders have been decimated, well actually reverse decimated, as they have about 10% of their original investment left.
During his tenure, there has been a different head of the renumeration committee for different years, and a differing method for calculating performance awards, be that by changing the "peer group", the criteria or the conditions. The Raven is sure though that shareholders must be delighted to know that they had to match another firms offer for this superstar, in order to motivate him in his role?! what is 2mm of shares between "partners"?
When he joined in 2007 he had a total compensation of £333k, for 2008 he earned £992k, for 2009 £579k and for 2010 £874k.
What did shareholders earn?
2007 -33%, ouch and the FTSE did what?
2008 +29% almost back to break even yah, definitely worth a million quid...
2009 +3% still not at break even... hmmmm half a million?
2010 -44% almost a million again?
2011???? -82% and what will be looking at??
Thank goodness ITV didn't land this superstar, the Raven was long ITV, that would have been pretty nasty.
It is "interesting" though that a company losing nearly all of its shareholders' value has a CEO that also find the time to join the board of the Guardian, and the Chairman, to top that decided that joining M&S might be a good idea, only to discover that perhaps he didn't actually have enough time for both roles.
Just to put it into perspective, since he joined the firm shareholders have lost half a billion pounds, and the CEO has made £3mm but feels that he needs to be incentivized to turn the company around rather than jumping ship? Shareholders should have made him walk the plank.
Tuesday, 1 March 2011
HMV warning
Thanks Robert Swannell, are you going to pay HMV shareholders a golden parachute?
trading update
can't believe the guy rocks up and leaves after such a short period of time when the firm was already in a difficult position. Its not even being a mercenary, and the excuse is very poor.
net debt of £130mm is worse than the City was forecasting, its a little worse than the Raven was thinking given their update, and leaves less room for further restructuring costs and makes meeting their bank covenants a little harder.
The news in January that credit insurers were restricting insurance to HMV's suppliers should be in the stock price by now. The point the Raven feels the retail market is not pricing in so clearly is that between October 09 and the release of full year results in April 2010, inventories fell from £319mm to £248mm, a reduction of £70mm of stock, roughly one would expect a similar % move this year, and so inventory should fall to ~£234mm ie £68mm, which should mean that HMV naturally should be able to trim payables to £420mm. So in reality the demand for insurance should have been lower over the half.
Bought a few more shares, however its still a tiny position and should HMV fall to zero it would cost less than 1% for the portfolio, which is the maximum risk. Gut feeling that this is going to come with a rights issue that it should be able to get away if it does it sooner rather than later, the worry is that creditors get to extract the value from this firm.
trading update
can't believe the guy rocks up and leaves after such a short period of time when the firm was already in a difficult position. Its not even being a mercenary, and the excuse is very poor.
net debt of £130mm is worse than the City was forecasting, its a little worse than the Raven was thinking given their update, and leaves less room for further restructuring costs and makes meeting their bank covenants a little harder.
The news in January that credit insurers were restricting insurance to HMV's suppliers should be in the stock price by now. The point the Raven feels the retail market is not pricing in so clearly is that between October 09 and the release of full year results in April 2010, inventories fell from £319mm to £248mm, a reduction of £70mm of stock, roughly one would expect a similar % move this year, and so inventory should fall to ~£234mm ie £68mm, which should mean that HMV naturally should be able to trim payables to £420mm. So in reality the demand for insurance should have been lower over the half.
Bought a few more shares, however its still a tiny position and should HMV fall to zero it would cost less than 1% for the portfolio, which is the maximum risk. Gut feeling that this is going to come with a rights issue that it should be able to get away if it does it sooner rather than later, the worry is that creditors get to extract the value from this firm.
Wednesday, 12 January 2011
HMV
After poor trading and announcing that they are closing 40 stores, the stock dropped to ~25p.
At this price its worth a small punt. DB have highlighted it popping up on their LBO model, and so too it has on the Raven's. Very roughly after knocking the balance sheet around a little there is back of the envelope £200mm of net debt after some restructuring costs and sales, with that restructuring the business should earn approx 50mm of cash a year, which put on an market multiple you get to about 46p a share. That is aggressive and rather rough, but it was worth putting in the book as a marked to have some more work done on it when time allows, seperating out the value of the chain waterstones. (obviously there are some pretty awful long term structual problems in the sector, internet retailing, the iphone, etc which should be depressing the price)
At this price its worth a small punt. DB have highlighted it popping up on their LBO model, and so too it has on the Raven's. Very roughly after knocking the balance sheet around a little there is back of the envelope £200mm of net debt after some restructuring costs and sales, with that restructuring the business should earn approx 50mm of cash a year, which put on an market multiple you get to about 46p a share. That is aggressive and rather rough, but it was worth putting in the book as a marked to have some more work done on it when time allows, seperating out the value of the chain waterstones. (obviously there are some pretty awful long term structual problems in the sector, internet retailing, the iphone, etc which should be depressing the price)
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