Evil Diaries: Browning the gravy

I start with a cut and paste exercise from N Brown (BWNG)‘s results update a couple of days ago:

“N Brown is a top 10 UK clothing & footwear digital retailer. Our retail brands are JD Williams, Simply Be, Jacamo, Ambrose Wilson and Home Essentials and our financial services proposition allows customers to spread the cost of shopping with us. We are headquartered in Manchester where we design, source and create our product offer and we employ over 1,800 people across the UK.“

What is interesting about this company is that it possesses the skills of ASOS and BooHoo yet displays a pitiful stock market rating by comparison. I grant you that all three differ from one another but they are all about offering clothing at a competitive price and distributing it quickly and profitably. Further, BWNG has a net asset value of the order of twice the share price whereas for the other two the share prices are miles and miles ahead. And that is not all: BWNG seems to be making good money net of tax (there is some confusion as to just how much the current haul is and might prove to be) and might be on a PE as low as around 3. But should the profits be rather less they will surely be sufficient to whet the appetite of the reasonable man.

I do not know how to guess a target price, still less how long it might take to attain it. But at least 60p seems very modest to me and should be confirmed as very attainable in the coming months.

I confirm that Jacamo is very good – very fair prices and clothes designed for the larger chap. I make no comment on the women’s clothing brands since, and as I have often said, men are very poor judges of the likely commercial outcome for current women’s clothing. That I leave to the ladies. It follows that I would welcome comment from the ladies. Let’s be having you.

But really the decline in the share price has gone too far. It is now around 50% of net tangible value and capitalised at £140m whereas profit might be running at £ 40m+ net of tax p.a..