At a summary level:- it would appear the bank has put on the...

At a summary level:

- it would appear the bank has put on the screws amortising off the facility ‘limit’ down to $36m at 39 June 2023 from $60m at 30 June 2022. Clearly they don’t trust the executive team enough and recent results would indicate they’d breached covenants hence the change to a balance sheet based ratio from profit based calculations. Ultimately a positive thing as it curtails Ryan’s ability to spend like a drunken soldier on stock-again, the capital markets (in this case the bank) have responded.

- Americas and online sales, where the market places a growth multiple on the stock, look to have at least stabilised the corrosion; Americas latest update -14% v -14% weeks 1-24 (v2022), Online latest update -21% v -21% weeks 1-24 from my reading

- If you can believe their statements, they are of the strong view recent trading is not indicative of long term profit potential. Ryan stuffed it up and is seeking a chance to turn it around.

- naturally with our new rich mate on the register all and sundry is now possible, shareholding $ amount small beer and he has a great track record in sustainable international retail branded expansion which CCX clearly does not.

-stock to cash conversion trend remains on track albeit the 30 June 2023 target should have improved and they did not change it, disappointingly.


My own view is that they should be able to restore long term EBITDA margins to circa 15% and progressively reverse the collapse in sales of the recent half. I do expect logistical improvements will help, which they repeated in the commentary. Somewhat unknown for now is whether Ryan can actually grow the business, lack of recent expansion into new territories indicates he may be struggling with it all and lack of depth on the Board in its current state doesn’t help.

If you value it at a more decent multiple re 2024 EBITDA you’ll find the current price to be cheap. Trust is the missing factor for many, including a sore arse.