3 mins. to read

Keith Jones, former JJB CEO and sinking ship deserter

UPDATE (14:30PM) – The entire issued share cap in JJB has turned over today and I hope it is not all private investors buying in. Remember, whether the share price is £10 or 0.01p – if the company goes bust you lose 100%. That being said, I am beginning to wonder whether Dicks would be better placed just writing of the £20m they injected recently as they said they had or whether risking a pre-pack with another operator that cherry picks the stores (MA?) and leaving them with a £20m blackhole is really in their interests? At the current market cap of under £2m you just never know in these situations… What is abundantly clear now however is exactly why the Directors never participated in purchasing shares in recent months. Utterly despicable in my opinion.

Following the debacle that was the Plus Markets sale recently and which was covered so vociferously on this blog (see legend to the right), whenever I see the words “Formal Sale Process” and “Given the level of current debt within the Company, there can be no assurance that any proposal or offer that may be made would attribute value to the ordinary shares of the Company,” it sends shudders down my spine.

This mornings announcement by JJB is not good and details that trading has continued to worsen – this was against the background of the Olympics too. Mike Ashley must be mixing champagne with his cornflakes this morning.

For any holders yet to bale – take a leaf out of K Jones’ book (the only one I would add) and get out while there is a vestige of value. Remember the “sale process” of Blacks? This looks to be a mirror image.

The appointment of KPMG means only one thing in my book and that is ultimately administration. Keith Jones, Mike McTighe and the remainder of the Board should hang their heads in shame at the utter destruction of value once more in JJB. How these people ever get to the position of Directors of Public Companies completely perplexes me – a 5 year could no doubt run the companies better.

Here’s the full obituary – 

Commencement of Formal Sale Process

On 19 July 2012, the Company announced that the deterioration in trading and the continuing poor macroeconomic environment was likely to accelerate the timing of additional funding required by the Company and that the level of headroom on its working capital facilities and financial covenants would be significantly reduced in the short and medium term. The Company also stated that in response to these issues it was in discussions with its strategic partners. Since the date of this announcement, in the six weeks ended 26 August 2012, like for like sales have decreased by 3.3% and like for like cash margin has decreased by 9.5%.

The Company has continued its discussions with its strategic partners regarding a further capital raising and restructuring of its store portfolio to facilitate the turnaround of the group’s trading performance. However, following these discussions, the Directors do not believe that the Company will be able to raise the level of funds required to implement the turnaround. As a result, the Board has decided to conduct a formal sale process of the Company and now wishes to invite offers to support further investment in the Company, which may result in a sale of the Company or its assets.

The Company proposes to conduct the formal sale process through its adviser, KPMG LLP, who should be contacted by any interested parties (see contact details below). There can be no certainty that a proposal will be forthcoming or that an offer will be made for the Company or as to the level of any proposal or offer that may be made.

As at 28 August 2012 net bank debt was GBP16.5 million. In addition, the Company has GBP18.75 million of Convertible Loan Notes outstanding and has also drawn down GBP1.1m under the trade loan facility (details of which are set out in the Shareholder Circular published by the Company on 4 April 2012). Given the level of current debt within the Company, there can be no assurance that any proposal or offer that may be made would attribute value to the ordinary shares of the Company. The Board will update the market as to the status of the process in due course.

As announced by the Company on 9 July 2012, Bob Corliss will assume the role of Chairman with effect from 1 September 2012 and lead the Company through the sale process. Mike McTighe will stay on the board of directors as a Non-Executive Director until the conclusion of the sale process.

Comments (0)

Leave a Reply

Your email address will not be published. Required fields are marked *