Retail worries cast cloud over Monsoon's float
Tuesday 06 January 1998
Fund managers have reacted coolly to the float's prospects, saying the company will struggle to secure the premium pricing its advisers are aiming for. They say Monsoon's abandonment of its float 18 months ago will count against it, as will the recent profits warning from Oasis Stores and downbeat messages about Christmas trading from other retailers. Investors will be looking for further clues from Burton's Christmas trading statement today.
Monsoon will not start its presentations to institutions until the pathfinder prospectus is published later this month. But fund managers contacted yesterday expressed concerns.
One said: "There have been quite a number of disagreeable floats and there could be a buyer's strike developing. Because the float was pulled before you tend to be naturally suspicious."
Another fund manager said Monsoon's prospects might be dented by the disastrous performance at Limelight, the kitchens and bedrooms group, where the company's founder sold a significant stake in the business. Monsoon is 96 per cent owned by its founder Peter Simon. He will net pounds 86m from the float.
One fund manager commented. "We will be looking at it very closely. I think it will be quite a difficult one to get away." Another said: "It will have a problems because of the Oasis warning but it depends on the price."
Few have any qualms about the company's trading record. But they question whether its high margins are sustainable and whether it is coming to the market at the wrong time in the cycle when discretionary spending is starting to be affected by higher interest rates.
A key factor in the pricing will be Monsoon's failed attempt to come to the market in summer 1996. The float was abandoned due to concerns over the ultimate beneficiaries of a Maltese-registered trust which owned two thirds of the business. The trust has since been disbanded.
Monsoon's brokers this time, NatWest Securities, say they hope to secure a valuation of pounds 350m, which would place the company on a historic multiple of around 20-times earnings. This is a premium to the market while fund managers and some analysts feel it should be priced at a discount.
Monsoon's trading in the run-up to Christmas is thought to have been solid while the winter sale is said to have started well.
- 1 Planes go hybrid-electric in important step to greener flight
- 2 North Korean prison officers 'cooked prisoner's baby and fed it to their dogs', more horrific accounts from UN report reveal
- 3 Antonio Martin shooting: Mayor says there should be 'no comparison' to Ferguson
- 4 Antonio Martin shooting: Police and protesters clash over teenager's death just five miles from Ferguson, Missouri
- 5 British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...