KMD Kathmandu Brands

[Waltzing]

KMD what MR AI says..

https://claude.ai/public/artifacts/c073acb1-9444-4de7-8bc7-fc5d13861738

[Shareguy]

Possible CR


https://www.afr.com/street-talk/kmd-brands-enlists-goldman-sachs-for-major-recapitalisation-20260315-p5oanj

[Basil]

Capital raise going ahead.  Asking people to throw good money after bad ?

[Ferg]

Link to CR trading halt:
https://www.nzx.com/announcements/469885

I think the Directors were buying at 26c / 27.5c.  Not their best investment....

[Basil]

Mention of stock turns.

KMD 1.4 stock turns a year compared to

MHJ 1.3
WHS 4.2
BRG 4.1
HLG 6.1

Even allowing for some manufacturing component both KMD and MHJ pretty pathetic when it comes to managing stock

Ranking does tell a bit of a story eh

That's been a very deep systemic issue for many years and makes them uninvestable in my opinion.

[Waltzing]

well the BOP Mount shop wont be doing record sales. Was in shop this last week and the main street was almost empty except for Tourist ship.

Numbers in the water in the evening surfing were a fraction of last year. That might be weather related with a wet summer and perhaps higher winds?

Business persons in the professions seems more than concerned for the retailers .

The entire pilot bay area seemed almost deserted as the big hill right around to the surf club was fenced off...

Big tourist destination for the country and it seemed to be in a pretty dire situation.

[Basil]

Very, very sad for all involved down there. 

[entrep]

8 to 10c hahahahahahahaha

what a basket case

disc - me as a holder:

[winner (n)]

KMD a great example of wealth destruction



A  couple of capital raises and acquisitions and at the end of day poorer for it



FY18 saw $497m revenues and $51m from $614m assets and $420m equity. Profit margin >10% and ROE 13.7%.. There were 211m shares and a market cap of $694m



Acquired Oboz and Rip Curl - great stuff



In 2019 raised $145m at $2.55 per share. In 2020 raised about $200m at 50 cents a share



Come 2026 revenues doubled to about $1 billion but no profits - even allowing for writing down some of the goodwill on those acquistions



Assets have increased from that $614m to $1,100m and Equity up to $690m (badly impacted by the writedowns)



Not surprisingly Market Cap has fallen from the $694m to current $139m - down $555m ... wow



All that money and effort and nothing to show for it leading to huge destruction of shareholder wealth ... Captain Kirk and his team should be ashamed of themselves



So dire they are going to plead for more cash -- be interesting what story they spin this time



Question is though - what's changed and is this time going to be different

[lorraina]

Can not see KMD 'putting the fizz back into the bottle' with Kathmandu or Rip Curl, and Oboz never had any' fizz in their bottle.'
Only part of KMD's business which I think could survive is Rip Curl,but not under KMD's management.

[Ferg]

Running some numbers....711m shares on issue.  Net debt was forecast to be around ~$90m or less at the half year.  Assuming they pay away all debt and the CR process costs say $10m, then they need to raise $100m.  A 1:1 rights issue at 14c per share will do it.  Will the market accept 14c, or demand more of a discount?  And given the targeted cost savings and saved interest costs on debt, is that enough to turn a profit?  Keep in mind that would be on twice as many shares.  It's time they dropped the ESG nonsense and focused on making money.

[Ferg]

Only part of KMD's business which I think could survive is Rip Curl,but not under KMD's management.

I have been wanting to buy 2 Rip Curl wetsuits (1 winter, 1 spring) and signed up to their alerts & promotions etc.  The trouble is I got 2 decent wetsuits for 1/3rd the cost elsewhere......I'm not that much of a fan that I would pay that much more.

[Shareguy]

Not good

KMD – speculation in The Australian that Kathmandu's capital raise is not going to plan as it struggles to raise $100m at a price of circa 8-10cps to clear its debt and reports that the offer has attracted only $30-40m of demand so far with Briscoe (6.8%) owner declining to participate (consistent with the last KMD raise during COVID). KMD currently has a market cap of c$140m (at 20cps) ... illustrating the scale of the value destruction over the past 6 years since it raised c$180m to buy Rip Curl in 2019 and then raised a further $207m during COVID in 2020. KMD's largest holder is Allan Gray with 17.77%.

[Basil]

I think with this capital raise its a case of fool me once, shame on them, fool me twice, shame on me, try and fool me three times...not on your nelly.
Heads need to roll in the C Suite and at board level.  The level of capital destruction has been almost criminal.  No wonder Rod Duke is not participating.  What's the point of throwing good money after bad...

[Recaster]

Kirk is chairman. This capital raise is poorly handled. Possibly a scrap with the auditor. Breakup, sale of parts and delisting probably best but decision makers have their incomes to protect.

Another entity that Kirk chairs is the rugby union. Messy handling of Robertson decapitation and questionable reasoning behind it. Not expecting much from the All Blacks this year. They will probably be put to the sword in SA. Eviseration.