KMD Kathmandu Brands

[Ferg]

I reckon there will be maybe 2b shares on issue at the end of the process.  Running some numbers of future profits based on $1b of sales, and various P/E ratios, following is a table of a range of share prices:

You cannot view this attachment.

Assuming NPAT at 2% of sales and $20m NPAT, then at a P/E ratio of 10 the future share price should be around 10c.  Or with NPAT at 1% of sales and a P/E of 8 the SP should be around 4c.

From 2013-2019 (before Rip Curl) underlying NPAT averaged 9.2% of sales. Since then it has averaged 1.6%.

[winner (n)]

Sobering and big numbers eh Ferg

What gets me is that in spite of all the positive words (like 'strong performance') and the raving about how great this NEXT LEVEL this hopeless cash flow last 6 months

Took $520m through the tills but a Operating Cash Flow (inc leases) of NEGATIVE $22m and then spent $16m on capex - cash burn of $38m

Before the acquisition and global dominance strategy Kathamndu itself was as you pointed out making respectable returns .... but maybe beyond redemption now.

[Recaster]

Picture is even worse. Intangibles impairment probably tested annually. Massive intangibles on balance sheet. This year's impairment should be at least $200 million.

Of course tame auditors who are focused on their fees paid by the company will probably not impair. Just like the crooks at mfb.

But take another $100 million off this half year result and you will have a better idea of how screwed this company is.

Cash flow from operations was negative when the stock price was over a dollar. A sure sign back then that things were very bad.

Directors were buying back then which some guys on sharetrader thought was a sign that things were good and dandy. Real lesson in that.

[Shareguy]

Alan Gray is going to take up there full entitlements, plus take part in the placement says AFR. They are sitting on a huge unrealised loss. Last disclosure in Feb 26 sold down to 115m shares. Ouch...

This is going to be a very interesting capital raise. Anyone keen at 6cps?

[Basil]

I suspect the underwriters will get left holding the baby in a huge way. No interest from me. The business model is conceptually flawed. 1.4 times stock turn is appallingly bad. That and management and the board simply cannot be trusted to play a fair game with a straight bat. Generally speaking even on so called sale, KMD gear is unimpressive on a quality or value for money basis in my opinion. Like trying to sell Cadbury chocolate at a Whittakers price.

[Fiordland Moose]

Business has been stuffed from a long time. A retailer that operates with bottom tier distributor level stock turns, a huge CODB, and average GP margins (that certainly dont justify the hold time on stock). Despite the average margins, it's product offering is still well expensive, likely on account of its B corp status, and it just isn't nimble enough to economically source stock or react to changes in the market. Not sure I see that changing.

And its product is not well regarded.

[Minimoke]

I've always wondered about this wee clause in FB's T's and C's for Private Portfolio Management. And what actually funds their underwriting activities

"You do not have a right to be consulted on or to countermand any investment decisions that we make under the Investment
Authority."

[Minimoke]

Business has been stuffed from a long time. A retailer that operates with bottom tier distributor level stock turns, a huge CODB, and average GP margins (that certainly dont justify the hold time on stock). Despite the average margins, it's product offering is still well expensive, likely on account of its B corp status, and it just isn't nimble enough to economically source stock or react to changes in the market. Not sure I see that changing.

And its product is not well regarded.

I know its a bit like shooting fish in a barrel. I'm not so sure you can put this down to its B Corp status. I reckon it will be more down to its Rainbow Tick

But in all seriousness, these virtue signalling certifications surely have to be a red flag to investors. To me its a clear sign the board and senior management are not focused on their business.

I'm really not sure these Certifications actually hit their target consumer. I really dont see, as an example, Laurel Hubbard wanting to be clothed in that Urban outdoorsy chic look.

[Basil]

B Corp, Rainbow tick and all sorts of other virtue signaling and inclusion policies feature prominently in another well known company that repeatedly raises capital and then promptly flushes it down the toilet, (with biodegradable environmentally friendly toilet paper of course).  Yes, you guessed correctly I'm thinking of you Synlait.  Red flags for sure.

[Sideshow Bob]

Oh yes, the good old B Corp!!

More like BS Corp!! 

[Recaster]

Opening at 6.1 cents. The geniuses who run this company have done it again.

No doubt David Kirk to be knighted.

[entrep]

Officially my worst investment in any share on any market.

[Basil]

Opening at 6.1 cents. The geniuses who run this company have done it again.

No doubt David Kirk to be knighted.

Muppets !  No doubt the underwriters will do their best to try and support the price above 6 cents.

[Shareguy]

The shortfall bookbuild related to the Institutional offer achieved a clearing price of 6cps. ... this suggests very weak demand (relative to TERP of c11cps)

[Basil]

NBR has an interesting write-up on this fiasco today.