FCCN – vaguely interesting at 15p

FCCN (French Connection) is a share that I had invested in a few years ago, with disasterous consequences. My mistake was to buy on news of the recovery, after the price went up. The recovery subsequently proved short-lived, the shares tanked, and I sold out at a lost. I should have played it the other way around.

Since then, FCCN seems to have been yo-yoing around.

It issued its H1 report today, sending the shares down 8.3%. Revenues were down, LFL was up, though. Closing net cash was £7.7m, down from £15.0m a year before. The RNS highlgihts “Continued strong performance in the first six weeks of the second half”. The market does not seem to be assuaged by that.

Paul Scott wrote about it today. As far as I know he owns some shares in FCCN and is happy about his position. He describes it as a special situation, where the expiry of its leases should be good news. It would allow FCCN to sell clothes online at a profit, rather than shops, at a loss.

Over the last decade, FCCN has reported losses in about 5 years, which is hardly good. The special situation seems to be taking a long time to play out, too. Paul is a smarter investor, and definitely richer, than me, so my views are pretty meaningless next to his.

However, I am not happy to see the company’s cash position keep going down. At this stage, I might (which would likely to prove to be code for “not really”) be prepared to pay for the net cash on the balance sheet. There was £14m on their finals, so 15p per share.

15p is likely to be unrealistic target, however. The shares did dip to around 20p in 2012, so anything is possible, I guess.

This is not one I’m intending to buy in the foreseeable future. In the meantime, it’s back to the lounger for me, soaking up the Scottish sunshine whilst I still can.

Stay safe out there.

40p

 

 

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About mcturra2000

Computer programmer living in Scotland.
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