Flamingo provides some details on 1Q 2010 results

According to the management, the company is recovering, with March sales standing 35% higher compared with January, though we believe this is due mainly to the Easter sales. In addition the company succeeded to cut costs by 63% in April 2010 against January 2009 and 60% of shops were profitable in March against 40% in January. The management plans to turn 90% of the shops on profit by June 2010. No details were provided regarding the number of remaining shops. We note that the reporting is referring to Flanco, which is a subsidiary 100% owned by Flamingo International, the listed entity. We do not rule out the possibility that the retail activity will be fully transferred to the subsidiary, in which case it remains unclear what happens to FLA. The management estimates that Flanco will be able to exit the insolvency procedure in September 2010. According to a media release, the company is discussing with possible investors the take-over of a majority stake in the company, in exchange for cash to be used for debt repayment.

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