Jessops shares plunge on finance news - Amateur Photographer

Discussion in 'UK Photography' started by Bruce, May 28, 2009.

  1. Bruce

    Bruce Guest

    Wednesday 27th May 2009
    Chris Cheesman
    "Shares in Jessops have today fallen nearly 65% following news that
    shareholders are unlikely to see any return amid the photographic
    store's ongoing debt restructuring programme.

    "Jessops' shares have dropped to just over 2 pence each from last
    night's value of more than 6p, as the chain continues talks with its
    lenders. At one stage this morning they fell as low as 1.5p.

    "Earlier today Britain's biggest high street photographic retailer
    reported that its like-for-like sales fell 4.5% in the six months to 31

    "Its loss before tax and non-recurring items more than doubled, to £5.9m
    (2008: 2.9m).

    "In a statement, executive chairman David Adams said: 'In January we
    said that we were in discussions with our advisers and HSBC Bank and
    that it was highly likely that this exercise would involve a fundamental
    restructuring of debt. These discussions continue.'

    "He added: 'Regrettably, however, against the backdrop of the
    challenging retail environment and the historic level of debt, the board
    believes that it is unlikely that any value will be attributed to
    shareholders. Nevertheless, we are still working with HSBC towards a
    solvent solution for the business.'

    "Jessops' debts amount to around £60m."

    In a second article, the Amateur Photographer web site reports that
    Jessops are making another round of job cuts at their stores:
    Bruce, May 28, 2009
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  2. Bruce

    A.Lee Guest

    Which is not news at all. The outlook for Jessops has been well
    documented for many months now, they are in deep shit, but the Board are
    hoping to turn things round.

    Jessops shares shot up in price in February/March from around 1.5pence.
    The board issued a statement saying they had no idea why the shares have
    increased in value, as the financial outlook for the Company had not
    changed since the last statement (the Compnay had more debts than
    assets, and was only being kept alive by bank borrowing and deals to
    repay the debts with various banks).

    That they (the shares) have fallen back to the lower level suggests more
    of a sell off from 'short-traders' than any real lack of confidence in
    the Board. It has been known for a long time that Jessops was a risky
    Company that may be brought back to profit, and at the price it was, it
    was a small price to pay for potentially large profits. Anyone who
    bought at 1.5 pence and sells today at 2pence has made a 33% profit -
    pretty good going in the Market today.

    A.Lee, May 28, 2009
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  3. Bruce

    Bruce Guest

    Yes, I remember it well.

    I also remember buying a Zenit B from them in the 1970s, my first SLR.
    It was the first time I bought anything significant by mail order. In
    those days, they had one or perhaps two shops in Leicester - that was
    long before they opened a chain of a couple of hundred stores around the
    country and virtually destroyed the independent photo store.

    Jessops offered excellent value for money until the 1990s. However, in
    recent years, they have followed the Dixons model by charging
    ridiculously high prices and employing mostly inexperienced staff on low
    wages. You pay peanuts, you get ...

    I gave up checking Jessops prices when buying equipment, when I found
    they were charging £100 more than RRP for a Sony digital camera. I
    bought it elsewhere, I think for £250 less than Jessops price, with a
    free genuine Sony £49 battery included in the deal.

    The company has warned that in the forthcoming restructuring, Jessops
    shareholders will almost certainly lose 100% of their investment as they
    will be cut out of any deal. That means the bank will take over the
    company, and the shares will be worthless.
    Bruce, May 28, 2009
  4. Bruce

    Bruce Guest

    Bruce, Jun 1, 2009
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