The Lemon Fool

simoan wrote:What a horribly aggressive post. I just can’t be bothered to reply to the points you make as I have no wish to discuss further with you.

Amptly demonstrating why you were right about such discussions being unsuitable for this place.

Article today in The Telegraph about Burberry and what's going on there. It's not particularly comfortable reading. I note that company net debt today is apparently around £1.1 billion. More than 2x last year and what looks like about 10x what it was in 2021. Unfortunately, the article will be paywalled but for those like me who have been mulling over buying into the company it's worth a read. I think it's right to be cautious. I can only think it's a buy if you think a takeover bid is likely.

https://www.telegraph.co.uk/business/20 ... t-its-way/

BullDog wrote:Article today in The Telegraph about Burberry and what's going on there. It's not particularly comfortable reading. I note that company net debt today is apparently around £1.1 billion. More than 2x last year and what looks like about 10x what it was in 2021. Unfortunately, the article will be paywalled but for those like me who have been mulling over buying into the company it's worth a read. I think it's right to be cautious. I can only think it's a buy if you think a takeover bid is likely.

https://www.telegraph.co.uk/business/20 ... t-its-way/

Source Telegraph ( as per link above)


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source Sharepad

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The increase in borrowing ( debt) seems to be a case of a reduction in "cash & equivalents" than more borrowing. This leads to the question as to what has caused the reduction...... See simoan's comment a few posts above.

(I was going to top up my BRBY holding but decided to use dividends in an ISA to buy BRBY but sell the same qty in my taxed general trading account - with a view to sheltering dividend paying shares/ Labour).


Edit. There was a big sharebuyback of £404m.

BullDog wrote:Article today in The Telegraph about Burberry and what's going on there. It's not particularly comfortable reading. I note that company net debt today is apparently around £1.1 billion. More than 2x last year and what looks like about 10x what it was in 2021. Unfortunately, the article will be paywalled but for those like me who have been mulling over buying into the company it's worth a read. I think it's right to be cautious. I can only think it's a buy if you think a takeover bid is likely.

https://www.telegraph.co.uk/business/20 ... t-its-way/

On this board that's not an appropriate reason to but I'm afraid.

monabri wrote:

BullDog wrote:Article today in The Telegraph about Burberry and what's going on there. It's not particularly comfortable reading. I note that company net debt today is apparently around £1.1 billion. More than 2x last year and what looks like about 10x what it was in 2021. Unfortunately, the article will be paywalled but for those like me who have been mulling over buying into the company it's worth a read. I think it's right to be cautious. I can only think it's a buy if you think a takeover bid is likely.

https://www.telegraph.co.uk/business/20 ... t-its-way/

Source Telegraph ( as per link above)


[Copyright material removed.]


source Sharepad

[Copyright material removed.]


The increase in borrowing ( debt) seems to be a case of a reduction in "cash & equivalents" than more borrowing. This leads to the question as to what has caused the reduction...... See simoan's comment a few posts above.

(I was going to top up my BRBY holding but decided to use dividends in an ISA to buy BRBY but sell the same qty in my taxed general trading account - with a view to sheltering dividend paying shares/ Labour).


Edit. There was a big sharebuyback of £404m.

I wan’t going to comment further on this thread, but as I respect you as a poster I would just point out that the change to the balance sheet debt at Burberry from FY 03/20 is totally caused by this being the first FY accounts under IFRS 16 which required the capitalisation of leases. You can see this by the big jump in Non-current assets and liabilities.

More generally, I would hold off buying now because I expect the Q1 trading update in 4 weeks time to be poor and as if to highlight this they announced a £300m bond issue with a coupon of 5.75% last night for “general corporate purposes” i.e. keeping the lights on. An interesting situation nonetheless.

All the best, Si

Gone ex-Divi today but that seems to have accelerated the fall!
Down to 903p as I type - dividend would be 6.76% if kept at current level.

Have to admit it's getting towards a chavtastic "worth a punt" territory.

vand wrote:Gone ex-Divi today but that seems to have accelerated the fall!
Down to 903p as I type - dividend would be 6.76% if kept at current level.

Have to admit it's getting towards a chavtastic "worth a punt" territory.

If all you’re interested in is the dividend yield, then I would suggest there are higher and safer yields on offer. You’re correct though - at this point it is a total punt. I really don’t know why anyone would buy now when there is a trading update due in two weeks time.

simoan wrote:

vand wrote:Gone ex-Divi today but that seems to have accelerated the fall!
Down to 903p as I type - dividend would be 6.76% if kept at current level.

Have to admit it's getting towards a chavtastic "worth a punt" territory.

If all you’re interested in is the dividend yield, then I would suggest there are higher and safer yields on offer. You’re correct though - at this point it is a total punt. I really don’t know why anyone would buy now when there is a trading update due in two weeks time.

Because the trading update is just likely to confirm what the market has been pricing in for the last year?

But yes, we both agree its a bit of a punt. At this stage its on my watchlist - I am not afraid of falling knives but more due dilligence required and I have to question the wisdom of a company that just spent £400m in buybacks so recently while being oblivious the imminent slowdown in the business.

vand wrote:

simoan wrote:If all you’re interested in is the dividend yield, then I would suggest there are higher and safer yields on offer. You’re correct though - at this point it is a total punt. I really don’t know why anyone would buy now when there is a trading update due in two weeks time.

Because the trading update is just likely to confirm what the market has been pricing in for the last year?

But yes, we both agree its a bit of a punt. At this stage its on my watchlist - I am not afraid of falling knives but more due dilligence required and I have to question the wisdom of a company that just spent £400m in buybacks so recently while being oblivious the imminent slowdown in the business.

We don’t know what the trading update will say and IMHO it’s always better to react to the latest news from the company than to try and pre-empt it. If there is a further slowdown reported it could be a very quick way of losing money. I’d rather pay a premium on a more upbeat report and the first sign a corner may have been turned. Judging by the comments from other luxury companies, the situation in China has not improved and Burberry is very exposed there. Maybe the situation in the US has improved but that seems unlikely too. Given the balance sheet is looking stretched I would assume the dividend will be slashed for FY25, which I guess is all that matters hereabouts.

simoan wrote:

vand wrote:
Because the trading update is just likely to confirm what the market has been pricing in for the last year?

But yes, we both agree its a bit of a punt. At this stage its on my watchlist - I am not afraid of falling knives but more due dilligence required and I have to question the wisdom of a company that just spent £400m in buybacks so recently while being oblivious the imminent slowdown in the business.

We don’t know what the trading update will say and IMHO it’s always better to react to the latest news from the company than to try and pre-empt it. If there is a further slowdown reported it could be a very quick way of losing money. I’d rather pay a premium on a more upbeat report and the first sign a corner may have been turned. Judging by the comments from other luxury companies, the situation in China has not improved and Burberry is very exposed there. Maybe the situation in the US has improved but that seems unlikely too. Given the balance sheet is looking stretched I would assume the dividend will be slashed for FY25, which I guess is all that matters hereabouts.

I agree. To my eyes the yield looks unsustainable. Buying only makes sense as a bid candidate. IMHO

BullDog wrote:I agree. To my eyes the yield looks unsustainable. Buying only makes sense as a bid candidate. IMHO

I know we all know but its the dividend you think looks unsustainable yield will go up as the price keeps falling. I see Burberry have increased the dividend every year since 2003 except 2009-held 2020 halved (covid) last year held but I see interim went up and final down to leave the year level on the previous. So if the final wasn't quite up to muster last year, does that harbinger doom, could be. Over 15 years dividend has grown 10% annualised, ~7% over 5 and 10. The yield has hardly been above 3% in 20 years. Year on year the numbers are going the wrong way, don't look attractive and of course the price has been falling hence that yield.

I've recently signed up with Sharepad..I see they've pencilled in a dividend reduction from the current 61p ( 2024) to 50.0p, 53.3p and 59.7p ( 2025-27).
Whether this 'comes to pass' ...time will tell.


When UK comes to shareprice, it might be a case of Good news reward versus bad news kick in the chops...?