Jul 2020: Next – Agent of Change

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Next plc – Agent of Change

Jul 2020 (£50)

 

Forget your Harvard case studies, Next plc today offers a masterclass in business innovation on this side of the pond and remains one of the best run retailers that we have encountered in our careers. Now back at c.10x PE thanks to Covid-19, investors are getting a great play on innovation and a future business model pivot priced at a good margin of safety.

Next is seen by some (and sometimes priced) as a dodo, i.e. a high street retailer facing extinction. Next is a high street retailer, but that is actually only a quarter of the story (literally! it’s 23% of profits). More importantly it one of the most-trusted/respected UK retail brands to both consumers and we think, importantly, its retail peers. It is also a preeminent e-commerce logistics business that has perfected hybrid retailing and has begun monetising its considerable know-how by selling for third party retailers. Perhaps the analogies with Amazon’s AWS, Ocado’s licensing business or ASOS’ Marketplace seem tenuous to some but Next’s track record of proven commercial creativity warrant recognition on the part of investors. One thing is for sure, Next is a survivor as those around it face extinction.

Fig.1: 10x P/E: as cheap as it gets?

 Source: Holland Advisors

In this note, almost 10 years on from our first recognition of Next’s business innovation (Phil Fisher under our noses, Oct 2011), we suggest that Next’s innovation is still firing on all cylinders. Unlike other better known innovators however Next has been innovating into a retail headwind rather than having a tailwind.

Next’s shares have suffered a ‘Covid derating’ to 10x P/E as per Fig.1 so the behind the scenes and constant innovation offers much optionality to investors. We cheekily suggested in late 2018 that Next might even be a candidate for Amazon to acquire in order to gain skills it currently misses in own-label clothing and fashion distribution. The underlying logic of that speculative statement has only increased since then.

“Gosh, how did we miss that”?

Everyone knows that Covid-19 has accelerated e-commerce adoption but most seem to assume that the winners of this trend are all US businesses. Shopify, a US lossmaking business that offers e-commerce solutions to retailers (with c.$2bn of revenues), has seen market cap surge from $40bn to $120bn since March. March 2020 also saw the launch of Next’s ‘Total Platform’ which, a bit like Ocado, offers a ‘white-label’ version of Next’s entire logistics operation to third party retailers. Its early days but it’s a damn interesting move by Wolfson – and he knows it.

“(Next’s newly launched Total Platform) could be one of those ideas that in five years’ time, people would look back and go, oh my gosh, that was an important moment. Everyone was worrying about Coronavirus and no one noticed the launch of the service. But actually, this is a ground-breaking operation in the UK and could be important to the Group” – Simon Wolfson, March 2020

In this note

The central premise of this note could be summed-up as follows:

“It is not the strongest of the species that survives, nor the most intelligent – It is the one that is most adaptable to change.– Darwin

Next’s track record is a testimony to Darwinism. From the development of its mail order catalogue business to its ‘hybrid’ online model and market-leading logistics platform: Next under Simon Wolfson has always had corporate dynamism sewn in its DNA.

The counter-argument is of course that Next is just running to standstill and the demise of the UK high street is too powerful a headwind to overcome. This may of course be true, but today’s low starting PE (10x historic), and ever reducing share of profits from stores (23%) provides much free optionality. Next, we conclude, can evolve to survive or even thrive post-Covd-19.

We offer three areas to consider.

1. Trusted brand

A ‘trusted brand’ is something of a cliché in the marketing industry but it is still important. Assessments of brand trust are usually between the customer and the retailer but we think such thinking on Next needs to now be broadened to also include the trust it is held in by its peers. Even the best online retailer in the world, loved by consumers for its customer service is still regarded with a fair degree of trepidation by its third-party marketplace and brands sellers; “Are they promoting my product correctly, or letting it be undercut by others” they ask themselves. Having a market position where those third party sellers trust you is important.

2. Innovation – it can be all in the detail too

Over the years we have discussed Next’s numerous innovative business practices. We have talked how Next would have impressed investing and business gurus from Phil Fisher to Jim Collins. Innovation gets highlighted in this note again because it can easily be overlooked in a time of crisis. We are intrigued by Next’s total platform and Wolfson’s throwaway comment that it is a ground breaking development in the UK retail market.

3. Next plc’s prospects as a survivor of Covid

Next plc updates investors next week and it would seem unlikely to us that Next would not be a beneficiary of the record e-commerce spending that has been reported by peers in recent weeks (at least in comparison to the terrible trading they were experiencing in May). We elaborate on this and consider how the stage might be set for Next plc post-Covid.

1. Trusted Brand, Trusted business

“We also do cut glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, ‘How can you sell this for such a low price?’ I say, because it’s total crap”. – Gerald Ratner, infamously, 1991

Sports Direct, Ryanair and most recently Boohoo have chequered histories of public relations, what is sometimes termed “bad press”. Sometimes it is fair criticism, sometimes unjustified. Sometimes customers look the other way (as low prices can make customers very forgiving!) and other times consumer trust can be completely lost in a minute (as per Gerald Ratner’s infamous moment of rash honesty above!). Trust is a very valuable intangible asset.

“Next and Asos have dropped Boohoo clothing from their websites after claims that the fast-fashion retailer sold clothes made in factories where staff were paid less than the minimum wage and worked in poor conditions. Boohoo has had more than £1 billion wiped from its share value in the past two days after an article in The Sunday Times alleged that workers in a Leicester factory making clothes destined for Boohoo were being paid as little as £3.50 an hour.” – Press Association

We highlight trust as a corporate asset as it is not given much weight by investors as it pertains to Next’s standing in the marketplace. From our own families’ experience as consumers, Next is a very trusted brand and the branding experts seem to concur (Fig.2).

Fig.2: Good value, good quality, trustworthy and respected

 Source: YouGov[1]

Why is this important? Apart from the obvious point of consumers prioritising brands with reliable service of quality, value and sustainability – there is a new aspect to this.

Retail distribution continues to consolidate into aggregator platforms. New brands continue to emerge but increasingly are relying-upon (trusting) third party aggregators to handle logistics and much more behind the scenes (see Nestle’s ‘distribution centre of the future’ in the link[2] below). Amazon and eBay pioneered third party marketplaces for small brands in the last decade but in Amazon’s case the marketplace participants have become increasingly wary of placing their fortunes in the hands of a partner that may also allow its competitors to under-cut or replicate similar products.

In some respects, Next is seeking to monetise the peer group trust that it has accumulated over decades into its new aggregator platform – a cornerstone of recent innovation at the company.

2. Innovation (like retail), is detail

We have written so much on Next’s innovation. Can we possibly have anything new to say? The point with Next is that innovation is a constant so investors need to keep abreast of what is happening. In times like this, the noisy macro backdrop easily distracts attention away from some significant new developments. In the last decade, the common thread of Next innovations has been in the area of logistics.

“Amateurs talk about tactics, but professionals study logistics.” – Old military saying

The clarity of purpose of that logistics innovation focus is crystal clear if one listens closely to Wolfson.

It’s really the final piece synergies that we’ve been building for some time. And what I’d like to finish is by emphasizing the purpose of our platform. The purpose of our platform is to make our own website, the first choice for clothing and homeware for our customers. The second is to make it the most profitable third party route to market for our clients. And the third is to make sure that the service we provide is one that, not only we are proud of, but that our partners are proud of as well. – Simon Wolfson, March 2020 (emphasis ours)

The excerpts below in Fig.3 offer a reminder of that journey of innovation that we have highlighted over the last decade.

Fig.3: Consistent innovation

Source: Holland Views, Next, September 2011

 Source: Holland Views, Next, April 2019

Try a lot of stuff…

An innovation is, at its most basic, just a new idea or method that is successfully executed. Thanks to the rise of Silicon Valley, innovation is too-often equated with ‘moonshots.’ In the real world, innovation is more often a combination of many small imaginative improvements.

“Try a lot of stuff and keep what works” Jim Collins, Built to Last

Here are just some of Next’s innovations. On their own, perhaps not that exciting, but taken together, the cumulative effect on the business is transformational.

  • Directory as a springboard to e-commerce
  • Cannibalising own business: in-house sourcing head-to-head with third party suppliers
  • Implementing online returns via high street stores (hybrid retailing)
  • Using store staff to increase warehouse returns efficiency
  • Shift from high street to out of town
  • Technology as core asset – building a scalable website
  • Cannibalising own business: LABEL
  • Platform plus (third party warehouses)
  • Total platform

This last innovation, Total Platform, is we think extremely interesting. The Appendix contains Simon Wolfson’s comments on this project in their entirety delivered in March of this year. It is well worth reading. In essence, Next’s Total Platform offers a one-stop-shop logistics service to new and existing retailers on a commission (% of sales) basis. In today’s vernacular, this could be termed logistics-as-a-service. The service is a zero-capital offer to new brands (such as the first customer www.littlelabel.com) and a lifeline to struggling brands (perhaps Monsoon, Top Shop et al??). As Wolfson outlined, this is a truly compelling offer that runs the whole gamut of services from stock buying, marketing, website management, back end logistics to even credit provision services. This really does sound ground-breaking to us too.

“What that means is that, not only will we run their website, but we will also do all their warehousing, distribution, returns, call centre work, customer credit, international sites, we will do absolutely everything that is involved with selling to customers and servicing those customers for them. In essence, what this does is it leaves the brand to do the bits of running a retail business, running a brand, that brands really enjoy, the design and sourcing of the product, the buying, the marketing, the photography, the web look and feel. It will look and feel as their business, but all the back-end part of the business, everything that involves large CapEx, anything that involves complex systems negotiations or developments, all of that, we will take care of– Simon Wolfson, March 2020

Despite all these developments, Next is today priced by Mr Market as a dying retailer. At the same moment in time, others in the retail supply chain (Shopify, Ocado, XPL logistics, Clipper, Amazon – all with less historical ‘baggage’!) are seen to provide the solution to consumer and online business needs. Ocado is a great example of a pivot in business model that can be implemented when a retailer offers its unique IP and process know-how to the world stage. That Next today offers many of these same globally sought-after skills (albeit in fashion rather than food) whilst that same innovation is overshadowed by its retail history, we find very interesting indeed.

3. Covid as an agent of change

The economic impacts of Covid are both worrying and fascinating. US and UK macro data show personal savings rates at all time-highs, wages (including temporary Government supports) actually above the levels of February 2020 and of course that e-commerce adoption has accelerated. If wages fall and savings rates stay high the widely predicted protracted recession will result. If they do not, the seen-to-be-impossible ‘V’ recovery might suddenly occur. Whatever the macro outcome, the huge leap in e-commerce adoption is surely an irreversible trend. Indeed we suggest Covid is a textbook example of that overused term: a catalyst.

Fig.4: Covid is a textbook ‘agent of change’ – a true catalyst

Source: Merriam Webster dictionary

Whilst we were early Covid worriers at the start of this year seeing western markets as dismissive of the threat posed in February, sadly the second order effects (e.g. that it would lead to c.4 years of accelerated ecommerce adoption in just 4 months) we did not come to early enough.

Another accelerated change that is evident is more high street fashion/clothing retailers being pushed closer to the cliff-edge of bankruptcy. For those with decent brands but inefficient cost structures, a lifeline could emerge in the form of a shift to asset light models facilitated by the use of third party logistics.

Thus, whilst short term trading store and website closures inevitably hurt Next during the initial lockdown period, it is arguably now well-placed to be a beneficiary of both:

a) the further acceleration of the move to online shipping and

b) the greater difficulty its peers find themselves in, thus their urgent need for a more efficient, non-store, route to market

Thoughts on profitability, liquidity and Next plc post Covid-19

Next’s asset light model has been highly attractive during its financial history. It has led to very high returns and thus significant cash generated in excess of the business’ requirements. Importantly this is despite a huge commitment to innovation and investment in physical assets like warehouses. As a result, its business’ value was largely dependent on the cashflow it generated. Indeed, in world of great asset-light business franchises’ like Mastercard or Moody’s this is a good and widely credited model. However, in the unprecedented Spring 2020 trading period, businesses like Next and ASOS had nothing to fall back on. The result is a heart attack like situation for a company unable to trade to generate cash. This culminated in an equity raise for ASOS (and indeed many others) and aggressive selling of assets (warehouses) for Next. Were such a trading period to have lasted for a prolonged period such companies might not have survived or at least would have seen further equity dilution. As a result, many investors might see them now as risky.

Who needs analysts?!

However, that very same thinking would also make a freehold pub business seem risky too, despite 200 years of beer drinking history without closure. We must be acutely aware of recency bias in our analytical thinking.

Against such a backdrop Simon Wolfson and team once again did analysts’ jobs for them by providing the roadmap for what profits and cash flow might look like in worst case scenarios. We will not summarise this work by Next, the most recent of which was outlined on 29th April (see link[3]).

When not only its stores but even its online operations were shuttered we think such an outlook was both helpful, and in fact for a short while, realistic. However much has changed since these updates were released by Next on 29th April and earlier on 14th April (when it reopened its warehouses). Many other online businesses have shown how strong they have since traded and close peers like ASOS have reported trading that was -25% YOY in April now being +10% YTD.

We are not in the business of projecting what Next will report in the coming weeks, nor how much its customers might buy from it in the coming months. Our interest is to look at:

  1. What this business might be worth vs. its longer-term intrinsic value,
  2. To consider whether shorter term trading could be so bad (i.e. losses and cash flow so severe) as to damage the business ahead of any normalisation.
Hand holders need not apply

In late April even were an investor to identify Next as a long-term winner, they might well have concluded that shorter term damage to cashflows could still have heavily impaired equity value. With now much greater evidence of market normalisation and even stronger trading online we are now prepared to state that we do not now believe this is any longer true. Indeed, even were Next to report slow growth in online clothing sales in coming months, such is the increased penetration of sales in other categories that have transitioned to online in this period (e.g. Hot tubs and Motorhomes) that this must ultimately bode well for one of the leading online clothing sellers in the medium term.

The table in Fig.5 shows Next’s most recent scenarios. Bloomberg consensus for FY21 suggests that the market forecasts are clustered around the -30% revenue scenario Next outlined (specifically: median consensus is FY21 revenues are -26% YoY with Net Profit of c.£100m. The lower half of the table shows the quarterly progression underlying such a full year sales decline.

Fig.5: Next’s latest FY21 (January 2012) scenario

 Source: Next plc trading update, 29th April 2020

With a complex web of events occurring since May we are prepared to state that we now think such a scenario unlikely (even highly unlikely). We are minded to recall Wolfson’s caution during previous weak trading periods when ‘Mr Market’ sought assurances from him that sales would recover strongly. Wolfson gave no such outlook instead honestly admitted the future was uncertain and that investors knew as much as he did.

Indeed, the attached piece (Holland Views – Next – You can’t handle the truth, March 2017) spoke to this interplay between a frank Wolfson and a worried group of investors. The shares then rallied strongly from the then low of £40 to £70 (pre-Covid). This is what Next does best, it prepares for the worst and tries to improve its lot. Our view today is not a short term trading call, but just one that we think gives us a better margin of safety. This improved risk/reward profile was arguably less visible only two months ago when the shares were a similar price.

Conclusion – we believe in ‘Margin of Safety’

A few older pieces on Next and also our one-page summary of the seminal book Good to Great, by Jim Collins can be found on our website. We hope during these periods of short term trading focus, clients will take a moment to re-look at the traits these pieces highlight. That such innovation traits are demonstrated by the likes of Amazon is not really up for debate. Maybe Shopify lives by them too (and at 60x sales, it needs to!!!). However, as investors just as keen on preserving, as well as growing our capital those US businesses, as good as they are, looked priced for perfection. Next by contrast comes with the pivoting and innovation skills we seek, but at a fraction of the price. Maybe this will only permit them to tread water in the brutal sector they were born into – in which case the shares are fairly priced, or a little cheap.

But maybe, just maybe, a different scenario could emerge where the collective skillset and process-knowhow that Next has built over the years is more appropriately valued by either future customers (ala the Ocado route), Mr Market (ala the Shopify route) or a corporate (ala our aforementioned Amazon route). Any one of those changes in fortune could see the shares become an excellent investment. By the way, we don’t ascribe any value in applying ‘hope’ as an investment strategy – to us these are all just credible scenarios.

Our hunch is that Next trading in the coming month will be a little better than Mr Market is pricing in, but it is only a hunch. With or without any improvement we think we are now being offered a great risk reward with an improved margin of safety in the short-term vs. 10+ years of compounded innovation paying off in the medium term.

Saving the best quotes and wisdom for last

Regular readers will note our penchant for a quote to help get our message across. During lockdown we have seen a little less of each other as a team here at Holland. So one day recently, we pinged Claire an email just to ask how she found Next as a customer these days. Claire is an astute consumer and a straight talker. Her reply we thought was telling:

“To me Next is to clothing and homeware what Amazon is to everything else when looking to purchase online.”

“I am not a shopper and prefer to order online. Next Unlimited delivery makes that even easier. I do not go shopping for clothes, it all gets done online and usually via Next (very rarely shopping on the High Street or in Next shops – unless I’m returning something). The fact it is so easy and arrives next day is just a no brainer for me when I need to buy clothes.”

“I haven’t bought anything new for months, possibly not even this year. I like Next especially now it has the other branded goods available – My kids want these and having them as easily accessible just makes it far more likely we would purchase via Next than with say, SuperDry directlyClaire Brunt, Holland Advisors (emphasis ours)

Buy Next

Andrew Hollingworth, Mark Power & Claire Brunt

The Directors and employees of Holland Advisors may have a beneficial interest in some of the companies mentioned in this report via holdings in a fund that they also act as advisors to.

Appendix

“I’m now going to talk about a new business idea, Total Platform. Our website at the moment, it is integrated with all the other functions within the Platform, warehouses, distribution, online marketing, customer service, credit, and international sites. Recently, we launched a site with a separate URL called Little Label. This site is dedicated to selling very top end children’s brands, that wouldn’t want to sit on the NEXT web site. So we created a separate website. To the customer, it looks and feels like a separate website. In order to get to it, you go to a different URL. But importantly, it is still linked into all the other services on our platform, in exactly the same way as our own website is. So it still has the 24 hour delivery, it still has the call center, it still has a credit. And everything else that goes with being part of the NEXT platform.

This year, we intend to take that concept one step further with agreed heads of terms with the business turning over in the order of GBP25 million, GBP30 million. So in the context of NEXT, not a big company, but a very fast growing company and we are going to run their website for them. So the website will have their URL. It will look and feel like their website. They will design it. They will have creative control over it, but it will link into all the other elements of our platform in exactly the same way as our own website does. What that means is that, not only will we run their website, but we will also do all their warehousing, distribution, returns, call center work, customer credit, international sites, we will do absolutely everything that is involved with selling to customers and servicing those customers and we will do that for them. In essence, what this does is it leaves the brand to do the bits of running a retail business, running a brand, that brands really enjoy, the design and sourcing of the product, the buying, the marketing, the photography, the web look and feel. It will look and feel as is their business, but all the back-end part of the business, everything that involves large CapEx, anything that involves complex systems negotiations or developments, all of that, we will take care of.

Now, you could look at this and make the mistake thinking, oh, this is an outsourcing contract or a joint venture. It is not an outsourcing contract and it’s not a joint venture and it doesn’t come with all the legal complications and potential conflicts of interest inherent in both of those structures. Instead, this is a very simple commission contract. It’s a long term commission contract. Basically, the client pays a fixed percentage of sales for all of the services that we provide. There are no extra charges. There is no discount, there is one commission rate on their sales. What that means are two things. First of all, it is a contract and a way of operating that we are very used to. It is the way that we operate with most of our LABEL customers have done for many years. Secondly, it aligns our interests with those of our client, a 100%. If they sell more, we get more commission. If they sell less, we get less commission. It is in our interests to maximize their sales and it’s in their interest to maximize their sales.

The development of their business is CapEx-free. It requires no systems investment, and potentially most importantly, it provides them with a 100% variable cost base. As you hit capacity, as you run close to your maximum throughput, your costs go up very quickly.

For a business that is maybe 1% the size of NEXT, their turnover can double without in any way impacting on our total capacity or ability to operate. So we can accommodate for them huge rates of growth, without any of the normal growing pains associated with very rapidly growing businesses. Equally, in the difficult years and everyone has the old difficult year, in those difficult years, their costs will go down in line with our sales, which means that, their cost base in the years that they most need it to go down, will go down exactly in line with our sales.

So we think that for some businesses, this may be a very, very powerful offer. Now in five years’ time, you may look back and go, oh, my gosh, I remember that Total Platform business and it may have come to nothing other than provide one client with a great business. On the other hand, this could be one of those ideas that in five years’ time, people would look back and go, oh my gosh, that was an important moment. Everyone was worrying about Coronavirus and no one noticed the launch of the service. But actually, this is a ground-breaking operation in the UK and could be important to the Group.” – Next CEO, Simon Wolfson, March 2020

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This document does not consist of investment research as it has not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore even if it contains a research recommendation it should be treated as a marketing communication and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. Holland Advisors is authorised and regulated by the Financial Conduct Authority. This presentation is intended for institutional investors and high net worth experienced investors who understand the risks involved with the investment being promoted within this document. This communication should not be distributed to anyone other than the intended recipients and should not be relied upon by retail clients (as defined by Financial Conduct Authority). This communication is being supplied to you solely for your information and may not be reproduced, re-distributed or passed to any other person or published in whole or in part for any purpose. This communication is provided for information purposes only and should not be regarded as an offer or solicitation to buy or sell any security or other financial instrument. Any opinions cited in this communication are subject to change without notice. This communication is not a personal recommendation to you. Holland Advisors takes all reasonable care to ensure that the information is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. This communication is based on and contains current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of this communication may have been disclosed to the issuer(s) prior to dissemination in order to verify its factual accuracy. Investments in general involve some degree of risk therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investment discussed in this communication may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of this investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action. This document is for informational purposes only and should not be regarded as an offer or solicitation to buy the securities or other instruments mentioned in it. Holland Advisors and/or its officers, directors and employees may have or take positions in securities or derivatives mentioned in this document (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manage conflicts of interest in regard to this communication internally via their compliance procedures.

  1. https://yougov.co.uk/topics/consumer/explore/brand/Next-Brand
  2. https://www.business-live.co.uk/ports-logistics/take-exclusive-look-inside-nestles-17324306.amp
  3. https://www.nextplc.co.uk/~/media/Files/N/Next-PLC-V2/documents/2020/trading%20statement-april20.pdf
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Whilst the information contained on the Website has been given in good faith and every effort has been made to ensure its accuracy, the Information may not be complete or accurate for your purposes. This Website and the Information is provided on an “as is” basis and Holland Advisors (London) Ltd may not, and has no obligation to, update the Information or correct any inaccuracy which subsequently becomes apparent. The Information and/or opinions and estimates comprised in the Information may be changed or withdrawn without notice and may become outdated. You, therefore, should verify any information or other material obtained from this Website before you use it.

HOLLAND ADVISORS (LONDON) LTD, ITS DIRECTORS OR OFFICERS DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BY WAY OF EXAMPLE BUT NOT LIMITATION AS TO RELIABILITY, COMPLETENESS, FITNESS FOR PURPOSE OR ACCURACY OF THE INFORMATION ON THIS WEBSITE OR ON ANY THIRD PARTY WEBSITE LINKED TO THIS WEBSITE.

IN ADDITION, WE DO NOT REPRESENT OR WARRANT THAT THIS WEBSITE OR THE SERVERS THAT MAKE THE WEBSITE AVAILABLE WILL BE UNINTERRUPTED, ERROR FREE, OR FREE FROM INFECTION, VIRUSES, WORMS OR ANY OTHER HARMFUL CODE WHICH MAY HAVE CONTAMINATING OR DESTRUCTIVE PROPERTIES. YOU ARE FULLY RESPONSIBLE FOR ENSURING PROTECTIVE STEPS TO BE TAKEN SUCH AS VIRUS CHECKING.

The Information is assembled from material prepared by Holland Advisors (London Ltd) or its agents but may not include Information made known to Holland Advisors (London) Ltd officers (or agents) subsequent to the date of publication of the Information indicated on the Website. If you use the Information, you do so at your own risk. Please recognise that the previous performance of securities or other instruments does not guarantee or predict future performance.

7. Exclusion of liability

TO THE FULLEST EXTENT PERMITTED BY LAW, HOLLAND ADVISORS (LONDON) LTD ACCEPT NO LIABILITY TO YOU OR ANY THIRD PARTY FOR ANY LOSSES OR DAMAGES, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT DAMAGES, CONSEQUENTIAL OR SPECIAL DAMAGES, LOSS OF USE, DATA OR PROFITS, COSTS OR EXPENSES INCURRED OR SUFFERED BY YOU OR THIRD PARTY, WHETHER IN CONTRACT OR DUE TO NEGLIGENCE OR OTHER TORTIOUS ACTION, ARISING OUT OF OR IN CONNECTION WITH THE ACCESS TO, USE OF, RELIANCE ON, OR PERFORMANCE OF THIS WEBSITE OR ANY INFORMATION CONTAINED ON THIS WEBSITE, WHETHER DUE TO INACCURACY, ERROR, OMISSION OR ANY OTHER CAUSE AND WHETHER ON THE PART OF US, OUR SERVANTS, AGENTS OR ANY OTHER PERSON.

NOTHING IN THE TERMS OF USE EXCLUDES, RESTRICTS OR MODIFIES ANY CONDITION, WARRANTY OR LIABILITY WHICH MAY AT ANY TIME BE IMPLIED BY STATUTE OR ANY OTHER APPLICABLE LAW WHERE TO DO SO IS ILLEGAL OR WOULD RENDER ANY PROVISION OF AN AGREEMENT VOID.

8. Third Party Websites
We may provide, on our Website, links to websites operated by third parties as a convenience to you. If you use these other sites, you will leave this Website. If you decide to visit any linked site, you do so at your own risk and it is your responsibility to take all protective measures to guard against viruses or other destructive elements.

Holland Advisors (London) Ltd makes no representations, warranties or guarantees of any kind about any of the content of any other website which you may access by hypertext link through this Website. When you access any other website by means of a link from this Website, you should understand that your access to that other website is independent of Holland Advisors (London) Ltd and Holland Advisors (London) Ltd has no control over the content of the website, nor does Holland Advisors (London) Ltd in any way endorse or approve the content of that website. In no event will Holland Advisors (London) Ltd in any way be liable to you or any other person(s) or organisation(s) for loss or damage (whether direct, indirect, consequential, special or other) for any use of any site linked to it by means of hypertext or otherwise.

9. Indemnity
You agree to indemnify Holland Advisors (London) Ltd and its officers from and against any claim brought by third parties against Holland Advisors (London) Ltd and its officers as a consequence of your breach of the Terms of Use. Furthermore, if your use of this Website results in the need for servicing, repair or correction of equipment, software or data, you assume all costs thereof.

10. Intellectual Property Rights and Licence
The copyright, trade mark or any other intellectual property rights in the Website and the Information are owned by or licensed to Holland Advisors (London) Ltd. You may download or print out a hard copy of individual pages and/or sections of this Website provided you do not remove any copyright or other proprietary notices. Any downloading or other copying from this Website will not transfer title to any software or material to you. You may not reproduce (in whole or in part), transmit (by electronic means or otherwise), modify, link to or use for any public or commercial purpose this Website without the prior written permission of Holland Advisors (London) Ltd. Any rights not expressly granted in the Terms of Use are reserved.

11. Operation of the Website
You should be aware that the internet, being an open network, is not secure. If you choose to send any electronic communications by means of this Website, you do so at your own risk. Holland Advisors (London) Ltd cannot guarantee that such communications will not be intercepted or changed or that they will reach the intended recipient safely.

12. Privacy
Any personal data relating to you will be collected, used and recorded by us in accordance with current data protection legislation, the Terms of Use and our Privacy Policy. You must read our Privacy Policy as it forms part of the Terms of Use.

13. Governing law
The Terms of Use are governed by the laws of England and Wales and the courts of England and Wales will have exclusive jurisdiction over any disputes arising under them.

14. Waiver
If you breach the Terms of Use and we take no action, we will still be entitled to use our rights and remedies in any other situation where you breach the Terms of Use.

15. Our details
This website is owned and operated by Holland Advisors London Ltd. You can contact us at: Holland Advisors London Ltd, The Granary, 1 Waverley Lane, Farnham, Surrey, GU9 8BB.

Updated and effective as of  31st March 2021

Disclaimer

Please read the following conditions of use of this website.
This website is directed at high net worth experienced investors and institutional investors who understand the risks involved with the investments being promoted and it should not be relied upon by retail clients (as defined by Financial Conduct Authority).

The information on this website is issued by Holland Advisors (London) Limited (hereafter referred to as “Holland Advisors”), a limited liability company (7431314) incorporated in England and Wales, which is authorised and regulated by the Financial Conduct Authority (FRN: 538932).

This website is for information purposes only and does not constitute an offer or solicitation to buy or sell securities, funds or any other financial instrument. The information is directed inside the United Kingdom and is not directed at any persons in jurisdictions where it would be against local law or regulation.  In particular, information on this site is not directed at any person, partnership or corporation being resident in the United States of America. Holland Advisors disclaims all responsibility if you access or download any information in breach of any law or regulation of the country in which you reside.

Information on this site
The information provided does not constitute advice. Holland Advisors believes that the sources of the information in this website are reliable. However it cannot and does not guarantee, either expressly or implicitly, and accepts no liability for, the accuracy, validity, timeliness or completeness of any information or data (whether prepared by it or by any third party) for any particular purpose or use or that the information or data will be free from error. Holland Advisors does not undertake any responsibility for any reliance which is placed by any person on any statements or opinions which are expressed herein. Neither Holland Advisors nor any of its directors, officers or employees will be liable or have any responsibility of any kind for any loss or damage that any person may incur resulting from the use of this information. This does not exclude or restrict any duty of liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. All Information may be changed or amended without prior notice although Holland Advisors does not undertake to update this site regularly.

Marketing Communications
Documents on this site do not constitute investment research as they have not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore, even if they contain research recommendations they should be treated as marketing communications and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. These communications are not personal recommendations to you and any opinions cited are subject to change without notice. Holland Advisors takes all reasonable care to ensure that the information on this site is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. Documents on this site are based on, and contain, current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of these documents may have been disclosed to the issuer(s) prior to dissemination in order to verify their factual accuracy.

Investments in general involve some degree of risk, therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investments discussed on this website may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of an investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action.

Holland Advisors and/or its officers, directors and employees may have or take positions in securities, funds or derivatives mentioned on this site (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manages these potential conflicts of interest internally via its compliance procedures.

Fund Information
Parts of this site may refer to Funds managed or advised by Holland Advisors. These are not solicitations to invest and any potential investors should refer to the “Our Funds” section of the website in order to learn more about these Funds and find out how and where to obtain the relevant full legal documentation.

Linked Websites
This site may be linked to third party websites or contain information provided by third parties. Holland Advisors does not make any representation as to the accuracy or completeness of such websites or information, has not and will not review or update such websites or information, and cautions browsers that any use made of such websites or information is at their own risk. Holland Advisors does not accept any liability arising out of the information contained on any linked website or Information provided by a third party and the use of such sites and information is at your own risk. This does not exclude or restrict any duty or liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom.

Indemnity
You agree to indemnify and defend Holland Advisors, its affiliates and licensors, and the officers, directors, employees, and agents of Holland Advisors and its affiliates and licensors, from and against any and all claims, liabilities, damages, losses, or expenses, including legal fees and costs, arising out of or in any way connected with your access to or use of this website and the Information.

Use of Cookies
If you agree to these terms and conditions a “cookie” might be placed on your computer. A cookie is a packet of information that does not identify individual users of a website, but allows the collection of website activity (such as the number of users who visit our website, the date and time of visits, the number of pages viewed, navigation patterns, what country and what systems users have used to access the site). We can use this information for statistical purposes, which allows us to analyse and improve our website. The cookie will expire automatically after 6 months or you can manually remove cookies in your browser settings.

Copyright, Trademarks and Other Rights
Copyright, trademarks, database rights, patents and all similar rights in this site and the information contained in it are owned by Holland Advisors or relevant third party providers. You may use the Information and reproduce it in hard copy for your personal reference only. The information contained herein and any supplemental documentation provided is confidential and should not be copied, reproduced or redistributed without the prior consent of Holland Advisors.

Governing Law
You agree that your use of this site and any dispute arising from this use is subject to English law and you submit to the jurisdiction of the Courts of England & Wales.

Privacy Notice

This is the privacy notice of Holland Advisors London Ltd our company number is 07431314. Our registered office is at 7 York Road, Woking, Surrey, GU22 7XH.

 

Introduction

This notice describes how we collect, store, transfer and use personal data. It tells you about your privacy rights and how the law protects you.

In the context of the law and this notice, ‘personal data’ is information that clearly identifies you as an individual or which could be used to identify you if combined with other information. Acting in any way on personal data is referred to as ‘processing’.

This notice applies to personal data collected through our website www.hollandadvisors.co.uk.

Except as set out below, we do not share, or sell, or disclose to a third party, any information collected through our website.

 

Data Protection Officer

We have appointed a data protection officer (‘DPO’) who is responsible for ensuring that our privacy policy is followed. If you have any questions about how we process your personal data, including any requests to exercise your legal rights, please contact our DPO, Claire Brunt at  claire@hollandadvisors.co.uk.

 

Personal data we process

1. How we obtain personal data

The information we process about you includes information:

  • you have directly provided to us
  • that we gather from third party databases and service providers
  • as a result of monitoring how you use our website or our services

2. Types of personal data we collect directly

When you use our website, you may provide personal data by submission of data by our Sign Up or Contact Us forms. This can be categorised into the following groups:

  • personal identifiers, such as your first and last names
  • contact information, such as your email address and your telephone number for communication
  • records of communication between us including messages sent through our website, email messages and telephone conversations
  • marketing preferences that tell us what types of marketing you would like to receive

3. Types of personal data we collect from your use of our services

By using our website and our services, we process:

  • technical information about the hardware and the software you use to access our website and use our services, including your Internet Protocol (IP) address, your browser type and version and your device’s operating system
  • usage information, including the frequency you use our services, the pages of our website that you visit, whether you receive messages from us and whether you reply to those messages
  • your preferences to receive marketing from us; how you wish to communicate with us; and responses and actions in relation to your use of our services.

4. Our use of aggregated information

We may aggregate anonymous information such as statistical or demographic data for any purpose. Anonymous information is that which does not identify you as an individual. Aggregated information may be derived from your personal data but is not considered as such in law because it does not reveal your identity.

For example, we may aggregate usage information to assess whether a feature of our website is useful.

However, if we combine or connect aggregated information with your personal data so that it can identify you in any way, we treat the combined information as personal data, and it will be used in accordance with this privacy notice.

5. The bases on which we process information about you

The law requires us to determine under which of six defined bases we process different categories of your personal data, and to notify you of the basis for each category.

If a basis on which we process your personal data is no longer relevant then we shall immediately stop processing your data.

If the basis changes then if required by law we shall notify you of the change and of any new basis under which we have determined that we can continue to process your information.

6. Information we process with your consent

Through certain actions when there is no contractual relationship between us, such as when you browse our website or ask us to provide you more information about our business, you provide your consent to us to process information that may be personal data.

Wherever possible, we aim to obtain your explicit consent to process this information, for example, we ask you to agree to our use of non-essential cookies when you access our website.

We continue to process your information on this basis until you withdraw your consent or it can be reasonably assumed that your consent no longer exists.

You may withdraw your consent at any time by instructing us  claire@hollandadvisors.co.uk.

7. Information we process for the purposes of legitimate interests

We may process information on the basis there is a legitimate interest, either to you or to us, of doing so.

Where we process your information on this basis, we do after having given careful consideration to:

  • whether the same objective could be achieved through other means
  • whether processing (or not processing) might cause you harm
  • whether you would expect us to process your data, and whether you would, in the round, consider it reasonable to do so

For example, we may process your data on this basis for the purposes of:

  • improving our services
  • record-keeping for the proper and necessary administration of our business
  • responding to unsolicited communication from you to which we believe you would expect a response
  • preventing fraudulent use of our services
  • exercising our legal rights, including to detect and prevent fraud and to protect our intellectual property
  • insuring against or obtaining professional advice that is required to manage business risk
  • protecting your interests where we believe we have a duty to do so

 

How and when we process your personal data

8. Your personal data is not shared

We do not share or disclose to a third party, any information collected through our website.

 

Use of information we collect through automated systems

9. Cookies

Cookies are small text files that are placed on your computer’s hard drive by your web browser when you visit a website that uses them. They allow information gathered on one web page to be stored until it is needed for use at a later date.

They are commonly used to provide you with a personalised experience while you browse a website, for example, allowing your preferences to be remembered.

They can also provide core functionality such as security, network management, and accessibility; record how you interact with the website so that the owner can understand how to improve the experience of other visitors.

Some cookies may last for a defined period of time, such as one visit (known as a session), one day or until you close your browser. Others last indefinitely until you delete them.

Your web browser should allow you to delete any cookie you choose. It should also allow you to prevent or limit their use. Your web browser may support a plug-in or add-on that helps you manage which cookies you wish to allow to operate.

The law requires you to give explicit consent for use of any cookies that are not strictly necessary for the operation of a website.

10. Personal identifiers from your browsing activity

Requests by your web browser to our servers for web pages and other content on our website are recorded.

We record information such as your geographical location, your Internet service provider and your IP address. We also record information about the software you are using to browse our website, such as the type of computer or device and the screen resolution.

We use this information in aggregate to assess the popularity of the webpages on our website and how we perform in providing content to you.

 

Other matters

11. Your rights

The law requires us to tell you about your rights and our obligations to you in regard to the processing and control of your personal data.

We do this now, by requesting that you read the information provided at  http://www.knowyourprivacyrights.org

12. Communicating with us

When you contact us, whether by telephone, through our website or by email, we collect the data you have given to us in order to reply with the information you need.

We record your request and our reply in order to increase the efficiency of our business. We may keep personally identifiable information associated with your message, such as your name and email address so as to be able to track our communications with you to provide a high quality service.

13. Complaining

If you are not happy with our privacy policy, or if you have any complaint, then you should tell us.

When we receive a complaint, we record the information you have given to us on the basis of consent. We use that information to resolve your complaint.

14. Retention period

Except as otherwise mentioned in this privacy notice, we keep your personal data only for as long as required by us to provide you with the services you have requested.

15. Compliance with the law

Our privacy policy complies with the law in the United Kingdom, specifically with the Data Protection Act 2018 (the ‘Act’) accordingly incorporating the EU General Data Protection Regulation (‘GDPR’) and the Privacy and Electronic Communications Regulations (‘PECR’).

16. Review of this privacy policy

We shall update this privacy notice from time to time as necessary.