Steerpike
Member of DD Central
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Post by Steerpike on Nov 17, 2017 19:14:50 GMT
Many -ve reviews on Google and Trustpilot mostly relating to logistics rather than the product and there seems to be huge fx exposure that caused a drastic fall in profits last year, no evidence of the company seeking to cushion the effects of future fx changes, so could be a nightmare, perhaps I'll sleep on this one.
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Post by peerlessperil on Nov 18, 2017 8:45:45 GMT
I too have reservations about this one.
The customer service reviews are awful, but could possibly be overlooked as a new entrant struggling to scale their customer facing operations with a rapid ramp-up in deliveries.
What really concerns me are the numerous reviews of people who review their products after a period of time has passed - there seem to be large numbers of reports on US consumer sites of the mattresses not lasting very long and all sorts of quality/durability issues.
Revenues aren't revenues if you are handing them back to the customer 2 years later, and incurring all sorts of additional costs....
Would I lend for 6 months? Maybe. 2 years at the proposed rate? Probably not.
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Nomad
Member of DD Central
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Post by Nomad on Nov 18, 2017 10:19:27 GMT
Revenues aren't revenues if you are handing them back to the customer 2 years later, and incurring all sorts of additional costs.... Would I lend for 6 months? Maybe. 2 years at the proposed rate? Probably not. However the loan is insured, and as of September the security covered the loan 3.6 times = <28% LTV.
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Post by peerlessperil on Nov 18, 2017 11:03:47 GMT
However the loan is insured, and as of September the security covered the loan 3.6 times = <28% LTV. Fully aware. However, ArchOver tend to use Coface as the credit insurer for their S&I deals, so I've built up quite a counterparty exposure to Coface already. Moody's rate Coface as A2 for Insurer Financial Strength, which is par for the course in this sector but not that high in absolute terms. (To add context for members not familiar with this area, Aviva is rated AA3 by Moodys for IFS, which is two notches higher. IFS rates the insurer's ability to pay claims, not to be confused with ratings on various types of bond the insurer issues to finance its balance sheet). In good times credit insurers are useful for covering the odd deal that goes wrong. When everything goes south they go with the flow I'm afraid, and 2 years is long enough for that to happen. I lost quite a bit of money on AMBAC wrapped structures back in the day. AMBAC was affirmed at AAA by both Moody's and S&P in 2008. They had filed for Chapter 11 by November 2010. The underlying business matters. Alot.
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ben
Posts: 2,020
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Post by ben on Nov 18, 2017 22:59:21 GMT
Revenues aren't revenues if you are handing them back to the customer 2 years later, and incurring all sorts of additional costs.... Would I lend for 6 months? Maybe. 2 years at the proposed rate? Probably not. However the loan is insured, and as of September the security covered the loan 3.6 times = <28% LTV. Think of the loan being insured as a bonus not a reason to invest.
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Post by martinde21 on Nov 19, 2017 12:54:54 GMT
Hi folks
It's good we investors are comparing notes - I find these really useful.
I'm holding on this opportunity for now, although its Secured & Insured, for the following reasons:
1) Continued FX risk - they look as if they have a large cost base in euro & USD and had dramatic profitability problems with Brexit in 2016. Not sure if they have any arrangements to protect against further currency volatility. Are they hedged? 2) Future trading forecasts look a tad optimistic in view of the above and the growth is aggressive.
I'm rattled by other folks comments on consumer reviews but at the moment am just looking at financials.
I would be more favourable if there was more evidence about management of the FX risk and how this factored in future forecasts. I am sure this is blindingly obvious and Hugo will be hot off the press to comment. Perhaps the "risks" section for investors could be expanded.
Very nice indeed to see more opportunities coming up however from a spread of companies....
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Post by hugoarchover on Nov 20, 2017 12:03:54 GMT
Thank you Steerpike peerlessperil martinde21 hoy for your comments / questions. Re Negative reviews: The reviews on their larger clients sites (Argos, Amazon etc) are positive. As you say, there are some negative reviews that relate to delivery. It is worth noting that D****o have lost no wholesale clients in the last 12 months and their larger wholesale clients have been trading with D****o for 5 years or more. Furthermore, annual returns value to D****o which relates to faulty goods (less than £100k) and damaged goods on delivery (less than £10k), are not significant. This loan relates solely to the UK wholesale clients and not the US. Re FX: D****o buy their products from their parent company in the Netherlands (St***o M*****a B****s BV). The FX is shared with the parent company. D****o make and sell their own beds – D****o is the UK arm of the global holding company. The whole group is a €400m Euro business with 300 employees, 350 stores in European markets and have sold over 500m units to date. Hugo |
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Post by ribble on Nov 23, 2017 12:29:34 GMT
Many thanks to peerlessperil for your insights into credit insurance which I found very informative. |
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