Just read some more detail in the Final Results quickly and it is not a pretty picture.
The write down on "low end" dress and sports leather - nothing new in that and should never have been allowed to happen. Stock [over]valuation is always a temptation and a quick win in the profit improvement stakes.
Lots of waffle about new management team and strategic priorities... Bla Bla Bla. Also a suggestion that the business will move more towards a hide based business. Surely odd as Ethiopia may well have the finest hair sheep leather but it is not likely to have quality cattle hides
Cash is a disaster with net debt up by £3.6M and headroom on facilities of £2.9M - good job they raised £5.2M last year [at £1.20 I think] cannot see that happening again any time soon...
Yes I have had doubts about the book value of stock for some time;it still seems very high in relation to turnover even after this write off.The level of debt is very high.
The brand has possible value but difficult to make a case for investment until we see some sign of progress;company could need additional shareholder capital.
£4.3M write down suggests some serious lack of control over the fundamentals of the business that does not bode well.
Disappointing also that the new Chairman talks about scaleable manufacturing and business pillars... What about the push to retail and brand recognition?
Hopefully Pittards will not be affected as it is an important employer directly in Ethiopia & its local buying of hides is a major source of income for farmers & has done a good job even if as yet returns have been modest.
Dire in my opinion.......Sadly Pittards continues to fail to deliver,and frankly I see little chance of improvement.
Quite simply the company seems to turn over its stock about once a year,in which the vast amount of supposed asset value is tied up,and makes at best minimal net profit.
Presently a pointless business alas.......
Pittard's name is well known for leather but perhaps not associated with individual products eg Handbags,coats etc.
Daines & Hathaway also has a fairly modest public awareness,which is perhaps the brand name they will build on.
Hopefully our patience will be rewarded eventually!
Pittard's heritage is in producing leather rather than leather products but regardless of such details and given recent purchases if they could become a "retail brand" it would transform the share price
Today's trading statement was described as "in line" by the Investors Chronicle and confirms Simon Thompson's view that the shares remain in bargain territory, on what he believes is likely to be only 9 times prospective earnings and a 25% discount to book value. The company's weakness remains its inability to deliver steady earnings growth over a long period but, having held the shares for a few years, I am now feeling more confident about its prospects, at least for the short term. For the longer term I hope the company will be able to use the expertise of its non-executive director, Godfrey Davis (ex Mulberry CEO) to exploit the retail market for luxury leather goods. Initial signs suggest that progress is being made in this area and success would provide a huge boost for Pittard's margins. Unlike Mulberry and Burberry investors may note that Pittards actually has the expertise to make luxury leather products and it has an English heritage which pre-dates Burberry by about 25 years!
The modest recovery in shareprice has been caused by being picked as a "Bargain Share " for 2015 in Simon Thompsons Portfolio at the begining of Feb.
Hopefully it will perform a little better than some of his previous tips!!!!!!
"A sharp increase in volatility during October is no surprise. The month has become synonymous with wildly gyrating markets ever since the Wall Street crash of 1929. Global stockmarkets have slumped in the past few weeks, and the VIX - a measure ..."
Now that Peter Gyllenhammer has sold almost all of his shares it seems likely that the share price will recover to somewhere in the £1.60/£1.90 range as the selling pressure from his stake reduction is removed.
It will also make a takeover possible without major shareholder agreement.
The shares are very cheap;frankly they probably deserve to be at the moment but eventually I expect the company to be bought out at a multiple,well 2 or 3 times the present price but it could still be a few years away.......
I don't think first half results will be too good judged by the trading update so even a partial rerating could be some way off.
Thanks but isn't PTD more about skins than hides these days? also nor sure that £5k is a huge vote of confidence by Reg.
Weakening $/£ will help though
Have you any insight into how the retail side is doing?
Falling for a 3rd consecutive month this year, I have a feeling it'll be even lower for August.
Secondly - the £. with most of the sales sold in $, the sterling has softened in recent months (Still nothing compared to a year ago)
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