JD Classics, what have they been up to?

[v8250]

www.telegraph.co.uk/news/2018/03/19/tycoon-spent-4...

This will be an interesting one...deep pocketed client-partner, a classic car business of known questionable pricing and a £9million claim...

[v8250]

a8hex said:

Happy Jim said:

Ouch, so it’s already cost JD £45K +VAT to try and get the case thrown out...and failed.

A lot of expensive people stand around in a court expecting to get paid.

I thought a quick company search would prove interesting. For your evening's entertainment

https://beta.companieshouse.gov.uk/company/0378819...

https://s3-eu-west-1.amazonaws.com/document-api-im...

https://hellopages.co.uk/directors/city-of-london/...

http://www.charmecapitalpartners.com/news/charme-c...

I sense all is not well with this structure. It's only going to take a small market shift, the current £9M claim and prospective buyers to start tightening the purse strings [or move to other markets] before Calme III the controlling owners of JDC move elsewhere. And liquidating high end classic cars in a downward market will be far from easy.

[v8250]

lowdrag said:

I truly am aghast at this part of the ruling:-

"He instructed Mr Derek Hood of J D Classics Ltd as a professional advisor and his agent for buying and selling cars on his behalf. Mr Hood advised him that he could double his money.
Over the next few years Mr Tuke bought and sold some 41 classic cars on the advice of Mr Hood, and, at a time when the values of classic cars was increasing, suffered catastrophic losses which nearly bankrupted him".

He lost money over a period when prices were rising at a rate not seen since the bubble of 90/91? I did a quick google, and came across this interesting article by the Daily Mail from their financial pages:-

http://www.thisismoney.co.uk/money/cars/article-26...

To be fair to Derek Hood, that the client lost money and continued to take his advice astounds me. Seems more like a Stockholm Syndrome case than anything else I have read lately.

+1

When I first heard of this case and the, at the time, alleged losses I too was astounded. My immediate thoughts were 1. how can a theoretically smart entrepreneur invest 66% of his cash into a single market when we all know this is a disastrous strategy, especially as Tuke's background is not the classic car sector, 2. the stated level of investment at £40M into a single market and 3. investing such a large sum with a classic car dealer who, in fact, does not own his own business...a business owned by VC's who can pull the plug at any time...and who will the moment the market turns. Clearly Tuke's failed to complete even the most basic of financial due diligence and, as lowdrag rightly highlights, continues to take Hood's advisory on acquisition[!]

Irrespective of the judgement, one has to question Hood's moral fibre. Good honest financial gain is absolutely acceptable. Poor professional advisory to/with a deep pocketed, cash cow type client is morally unacceptable.

[v8250]

lowdrag said:

Having spent my life in the financial industry, I have never met anyone who would use the words "Venture Capitalists" and "Moral Fibre in the same sentence. "Money grubbing" "self-opinionated" "avaricious" are the oft-associated adjectives.

Indeed, but there are some morally good VC's out there...

[v8250]

Norfolkandchance said:

Edit: he is definitely worth a lot! https://www.autocar.co.uk/car-news/anything-goes/i...

Note, it's not Hood who's allegedly worth £100m, it's the business that's allegedly worth £100m. One must always remember a business, like any other asset/combined assets is only worth what someone's prepared to pay for it. And one wonders what's the true asset value of JD Classics? How many of the cars available for sale at any one moment are owned by the business...or, do they operate the classic VC asset model whereby the parent company owns all/most of the assets and the front end business is simply a brand name servicing the assets? In this case car sales and some historic race support. This type of structure was until last year as per Thames Water and the 'parent' company, Kemble Water Holdings and Macquarie. This is who owns the majority holding of JD Classics http://www.charmecapitalpartners.com/who-we-are

eta - and this, I fear, is the true face of the classic car market today

Edited by v8250 on Tuesday 24th April 20:19

[v8250]

mph said:

v8250 said:

Note, it's not Hood who's allegedly worth £100m, it's the business that's allegedly worth £100m.

The top 100 lists it as Derek Hood, not JD Classics. Where did you read that it's the business value ?

Read the article, "Ward reckons JD’s business (worth well over £100m annually) is roughly divided into three equal parts: restoring customers’ cars, buying cars for restoration and subsequent sale, and racing cars around the world..."

And the Top100 listing is rarely based purely on individual wealth, it's based on combined personal and business assets...which is why the majority of these pointless list are, just that, pointless lists.

eta: re-reading 2017 posted accounts makes for more interesting reading and a somewhat squeaking sphincter surprise...Intercompany Balances [intercompany loans] reported at £77.3m payable post 1 year [normally 3-5year payback max] against net assets of £42.9m. The intercompany loans will be first charged against market adjusted stock value of £96m. One imagines the VC's ROI would be looking somewhat questionable should stock be overpriced [highly probable and bloody difficult to fix over loan term] and still on book should the market take a downward turn.

Edited by v8250 on Wednesday 25th April 19:04

[v8250]

V8 FOU said:

Let's see if we can book into the public gallery!!!

Excellent idea, with cheese and pickle sarnies, Thermos Flasks of Rosie Lea and ones preferred dunking biscuits. A gathering of PH'ers in Court with packed lunches should liven up the proceedings munch, munch, munch, munch...

[v8250]

Breadvan72 said:

If I lived in a village that had another PH member living in it I would emigrate, and wait for the local property values to recover from the negative.


PS: I have actually done this.

Yes, but rumour has it the BVI's have a higher concentration of PH'ers per capita than any other nation state/overseas territory

[v8250]

gooner1 said:

Pushed, jumped?

He was most likely 'encouraged...' due to an untenable position.

[v8250]

beanoir said:

silentbrown said:

It's pretty odd. This is from the last set of accounts. Assets = £142M, Liabilities (which will include the banks) £77M. It doesn't look like a company that can't pay off it's loans, even if they're largely tied up in stock.

That looks everything like a company struggling to meet its financial obligations!

Assets mean bugger all if you can service your debt - which increased dramatically from the previous FY.

Well, as the OP of this post I thought I'd sit back and see how this tale panned out. There's been some interesting discussion, the owners of JD have rightly ousted Hood, a company name change and some scary looking accounts. The accounts show that the business has virtually no pot to piss in...I certainly wouldn't finance an organisation that specialises in a fickle/volatile market whose only real tangle asset is its expert staff. We must all remember an assets true value is at the point when its agreed sale value/physical cash, is in the bank. In companies of this nature, good will has no bloody value, it's hardcore sales revenue that counts and ensuring the company has full order books for many months ahead. In order for a strong order book you need product to sell. Of the declared inventory...how many cars were actually owned by JD Classics, how many owned by Hood and/or how many on SOR? I look forward to the court case next month, Tuke [and others?] v's Hood.