Why care? BoConcept is a small but internationally well known furniture retailer from Denmark. Post 2008 and the global slump the stock and profitability got crunched. Shares peaked at cDKK700, stock now cDKK130 with a cap of approximately £35m.
What's changing? New dominant shareholder with board position seems to have forced change with c20% of stores being "fixed" which implies shut or under new management. Also a new logistics head just joined and the old managers have been cleared out. Margins and sales growth are starting to turn positive with a new ad campaign with Mads Mikkelsen (as in A Royal Affair?).
What's upside? Well in 2008 BoConcept made cDKK70m ebit on c1000 of sales. Now they are at ebit break even but recently raised their FY15 targets. If they can make a 7% margin in 24 months time that puts the stock on a mere 5x earnings. A 15x multiple seems conservative to me so that points to a 390 target or 300% upside.
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