Pumpkin Patch

[ratkin]

Despite rubbishing this company for months i have to confess i bought a few shares today.

Hopefully the economic headwinds are already built into the price . If those retail guys are buying in then thats good enough for me

[Dr_Who]

Despite rubbishing this company for months i have to confess i bought a few shares today.

Hopefully the economic headwinds are already built into the price . If those retail guys are buying in then thats good enough for me

Good luck Ratkin.

I am waiting this cycle out. I really cant see any recovery in the retail market with oil, interest rate, inflation rate and low growth at these levels. I dont mind paying a small premium if the cycle has bottomed and there are signs of a recovery.

[Footsie]

phaedrus

can you please do a chart on PPL

thanks

[boxing_beaver]

phaedrus

can you please do a chart on PPL

thanks

:D I second the above please

[Phaedrus]

Here is a chart of PPL featuring a range of indicators. Buy signals are marked with green arrows, Sell signals with Red arrows. The blue arrow marks where PPL broke above the resistance at $1.52, beginning an uptrend.

You can see that for 18 months, PPL was in an ever-accelerating downtrend, necessitating multiple trendlines as price action dropped away, rendering old trendlines obsolete - often before they were even confirmed. The final (confirmed) trendline was broken on 30/7/08.

The sensitivity of all the indicators shown here was set by tailoring their parameters to fit the September 2007 peak of the downtrend.

Notice that, while all featured indicators have triggered Buy signals, the Trailing Stop has yet to be hit. A Trailing stop is better than nothing at all, but it is no substitute for a proper trend-following system. In my opinion, Trailing stops are the system for people that don't have a system!

http://h1.ripway.com/Phaedrus/PPL811.gif

[Phaedrus]

I've been buying (PPL) over the last two months but always on down days and never such that I push the price above its opening. On what indicators would buyers like me show up?
The prime aim of TA is to get a handle on what the market consensus is. So, the actions of contrarians such as yourself don't really feature at all. Unless, of course, enough people happen to agree with you - but then that would create an UP day wouldn't it!

Maybe I have misinterpreted your post and you are in fact asking "What indicators should a buyer like me use?"
Oscillators such as the Relative Strength Index are good at identifying individual entry points in a downtrend but really what you ought to be using here are trend indicators. Oscillators will show you when a stock has been oversold, but cannot tell you when the downtrend has ended. What they give you is a string of "buy" signals, where the last signal is the best - but of course you don't know which is the last one in the downtrend until the downtrend ends.

Take a look at this chart. The dark green arrows mark entry points if you bought on a DOWN day, when the RSI became oversold. The light green arrows mark entry points if you bought on a UP day, when the RSI rose above the oversold threshold. You can see that most of the time, it made no significant difference whether you bought on an Up day or a Down day. Sometimes, though, it made a big difference. Look at the signals in the circled area on the RSI plot. See how waiting for an UP day gave a much better entry than buying on a Down day. In other words, your policy of only buying on down days is counterproductive. On average, you would do better buying on UP days.

To get back to the question "What indicators should a buyer like me use?"
The answer is trend indicators. The idea is to wait for the downtrend to end before buying.

http://h1.ripway.com/Phaedrus/PPLbelg.gif

[Dr_Who]

The uptrend has been on very light volumes.

[Footsie]

thanks Phaedrus

[brettdale]

Isnt it a bad time to be getting into retail stocks.

[_Michael]

Isnt it a bad time to be getting into retail stocks.

12 months ago was a bad time to get into retail stocks, seems like the bad news is already priced in.

If your time window is long then it should be a nice time to be picking a few up.

[BRICKS]

Isnt it a bad time to be getting into retail stocks.

GOING on all your writings it seems a bad time for you to DO anything..

[boxing_beaver]

hi Phaedrus,

Can you please post an updated chart? Im interested to see what the technical approach is currently telling us after giving us buy signals and then proceeding to trade sideways

[brettdale]

GOING on all your writings it seems a bad time for you to DO anything..

My stocks are all going down town.

[Phaedrus]

I'm interested to see what the technical approach is currently telling us after giving us buy signals and then proceeding to trade sideways
PPL is not really trading sideways, BB. It is in an uptrend, with a tentative trendline in place (green). Momentum is flagging a little though - you can see that the Stochastic oscillator has again dropped below 50 (magenta arrow). This uptrend has so far been on very low volumes - the OBV (not shown) remains quite flat. Volume should confirm price action but so far this has not happened.
This chart gives a nice clear example of resistance, when broken, becoming Support. (blue line at $1.52)
Note that the trailing short stop has still not given a Buy signal.

http://h1.ripway.com/Phaedrus/PPL912.gif

[Dr_Who]

PPL has been pushed down by Fisher Funds and one other large seller. Duke and JC has taken out Fisher, so the pressure is temporary out of the stock. Now comes the fundamentals. A number of brokers have downgraded PPL, so will be interesting to see if they can deliver. I really cant see PPL going anywhere with NZ, Aus, UK and US market being depressed. Maybe a corporate play in the future, but then who knows, the talk has been around for ages.

[boxing_beaver]

PPL is not really trading sideways, BB. It is in an uptrend, with a tentative trendline in place (green). Momentum is flagging a little though - you can see that the Stochastic oscillator has again dropped below 50 (magenta arrow). This uptrend has so far been on very low volumes - the OBV (not shown) remains quite flat. Volume should confirm price action but so far this has not happened.
This chart gives a nice clear example of resistance, when broken, becoming Support. (blue line at $1.52)
Note that the trailing short stop has still not given a Buy signal.

http://h1.ripway.com/Phaedrus/PPL912.gif

Thanks for that Phaedrus, semi-confirms what i was thinking. quietly watching for now

[Phaedrus]

Belg, for the life of me, I can't understand the logic of what you propose doing.

You suspect, even hope, that PPL is falling. Let's say you are right and PPL does fall to your $1.40 target. (it IS in a downtrend so there is a good chance of that) Let's assume that you intend to double your holding when your target is reached. Now, however much money you have "saved" by buying at that lower price, you will have lost on your current holding. For zero net gain! All you will have done is averaged down from $1.60 to $1.50 - and doubled your holding in a downtrending stock. It all went according to plan - and your position is still underwater. Doh!

You tell us that you were holding when PPL was $1.60 and that you were "a very temporary holder in that any sign of weakness I dump the lot". PPL has been showing clear technical weakness since it hit $1.53 on 10/9/08. It's a shame you didn't keep to your original plan and quit at that point. You would have been well ahead of where you are now, and well ahead of where you will be even if your new plan "succeeds".

Instead, here you go,
Averaging down,
Again.

[minimoke]

taking a long term position and whether the average price is 1.60, 1.50, or 1.40, or even 1.30 ... It'll take a lot more than TA alone to make me change my mind.



Oh dear . I’ve referred to this investment technique, tongue in cheek, in the PLS thread. Surely this isn’t going to be another text book exercise?

[Dr_Who]

Bel makes a good point. He is a fundamental long term investor. With a good blue chip company that is undervalued, it is good to average down. I did this with VCT below $2 all the way down to $1.60 with an average price of $1.80. I ve done very well out of averaging down VCT with a good dividend.

I believe PPL is undervalued and one of these days it will get taken out. Bel's timing maybe abit out, but his strategy is sound for a long term investor.

I too will buy some PPL one day, but not just yet.

disc: Not yet a holder

[_Michael]

My approach is similar to that of Belg in this case.

Results better than feared, my problem is with the dividend.

Why are they paying a dividend when its being financed by borrowings??!!

I would be very interested in others opinions on this.

My only guess that they are scared the market will panic with dividend cut. Still we all know that 100% of the money is needed within the business and to pay down debt at the moment.

[shasta]

My approach is similar to that of Belg in this case.

Results better than feared, my problem is with the dividend.

Why are they paying a dividend when its being financed by borrowings??!!

I would be very interested in others opinions on this.

My only guess that they are scared the market will panic with dividend cut. Still we all know that 100% of the money is needed within the business and to pay down debt at the moment.

They won't want to disappoint the institutional holders who seek a return plus growth, this would send a bad message to the market.

But i do agree, borrowing to pay for it seems a bit self defeating!

[Phaedrus]

I'm a very patient buyer when required and will be quite happy to continue buying....... as I did with HBY.
But, but, Belge, thats EXACTLY what disturbs me!
You seem to have forgotten all about your HBY experience of averaging down. I feel bad about posting this here, but it might serve as a reminder for you and as a useful object lesson for Dr Who and Michael - so some good may come of it.

http://h1.ripway.com/Phaedrus/HBYbelg917.gif

I think where you go wrong Belg is that you somehow manage to convince yourself that "I'm not averaging down ... I'm taking a long term position" (!)

[Hoop]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10532612

A 'balanced article' but the headline, together with the 4.1% hit in the US overnight on top of another 4.4% the day before yesterday, should result in some opportunities today.

Sorry Ph, I'm going to extend my long term position again today if that's okay with you.

10:13 - Lets see if 1.40 is the support level shall we... c'mon sellers, Ph has said you should all be out of PPL, you really should be taking his advice you know.

Buying more now breaks the following Zurich Axioms
Axiom 3 On Hope
Axiom 4 On Forecasts
Axiom 5 On Mobility
Axiom 7 On Intuition
Axiom 9 On Optimism & pessimism (maybe)
Axiom 11 On Stubbornness
Axiom 12 On Planning

Hmm...breaks 7 of the 12 Rules

One broken Axiom is bad enough

Belgarion this market nor PPL is not going to bounce back to its highest point of 2007 overnight nor in the next month so whats your hurry in diving into a harsh market buying long and fighting these bear stocks head on...why can't you wait for buy signals on PPL ...do you want to break Axiom 2 On Greed as well ?

Hoop is just concerned for his ST friends. Be careful out there.

[bull....]

Think your find this stock will get slaughtered in 2009 due to much lower consumer spending next year.. Looking for sub 1 by then.

[brettdale]

Think your find this stock will get slaughtered in 2009 due to much lower consumer spending next year.. Looking for sub 1 by then.

Even though there is lower spending, surly people are still going to buy clothes for their kids and Pumpkin patch is still a respected brand.

[ratkin]

Why worry , just chill . If you bought for the longterm then put them away and dont worry about it. No need to get stressed over a stock forum. It only meant to be a place of information and entertainment .

Some peope seem to take life very seriously on here . The sun is shining, go and do something more interesting

[Dr_Who]

Looks like PPL will hit the IPO price very soon.

I ve been keeping an eye on this pup for some time and yet to dip my toes in. Too scared to buy anything in this market.

[BRICKS]

Looks like PPL will hit the IPO price very soon.

I ve been keeping an eye on this pup for some time and yet to dip my toes in. Too scared to buy anything in this market.


FORGET the pumpkin overpriced and overseas in bad times will hit hard on there products
should be looking at PPG the products with the common TOUCH..

[winner69]

everybody laughed at me a few years ago when I said the PPL shareprice would follow the same track as BGRs .... in the first 4 years of their life PPL did go higher but the shape of the charts looks much the same .......... and the beginning and end prices look about the same ..... if PPL follows BGR chart there is still another 'little' hill to come before it all turns to custard again

[ratkin]

Its easy to be a "told you so" in this market. But is it really necessary?

[BRICKS]

everybody laughed at me a few years ago when I said the PPL share price would follow the same track as BGRs .... in the first 4 years of their life PPL did go higher but the shape of the charts looks much the same .......... and the beginning and end prices look about the same ..... if PPL follows BGR chart there is still another 'little' hill to come before it all turns to custard again

69 has never been a buyer but loves bad tales of woe above is yet a example of woe
so just lets say he told you so a few years AGO..

[Dr_Who]

FORGET the pumpkin overpriced and overseas in bad times will hit hard on there products
should be looking at PPG the products with the common TOUCH..

If nothing else, you do make me laugh BRICKS. PPG is still on my watchlist. I am waiting for them to put together a good plan before I buy their shares. Current management seems to be rudderless drifting. PPG needs to have a plan for their branding and marketing. They have to stop following and start leading.

[BRICKS]

If nothing else, you do make me laugh BRICKS. PPG is still on my watch list. I am waiting for them to put together a good plan before I buy their shares. Current management seems to be rudderless drifting. PPG needs to have a plan for their branding and marketing. They have to stop following and start leading.

IF you wait for the perfect world GOD would be running the stock exchange in the mean time we at PPG are going great guns, Dumped Ar-buck to some female called Jan closed the crook shops and NO need to sake sales persons so things are getting better WHO your missing OUT..

[minimoke]

... Dumped Ar-buck to some female called Jan
Jan Cameron is, as I recall NZ’s wealthiest woman after selling out Kathmandu. And John Arbuckle has gone full circle with Payless and Manchester – convinced there is a buck to be made in this trade.

[BRICKS]

Jan Cameron is, as I recall NZ’s wealthiest woman after selling out Kathmandu. And John Arbuckle has gone full circle with Payless and Manchester – convinced there is a buck to be made in this trade.

BRICKS is with you all the way there is money in PPG cheep baby gear for the mums
in the know and only in NZ none of this overseas rubbish been buying at low prices
mite be RICH one DAY..

[Dr_Who]

PPL near $1. Will PPL go below $1?

[BRICKS]

PPL near $1. Will PPL go below $1?

PPG just sent a letter today to inform us the past is behind and will return to profit
2008/2009 that's NICE..

[ratkin]

They pulled out some good news today , debt going to be far less than previously anticipated.
Good thing about a recession is it forces these companies to concentrate on cutting costs etc. Hopefully will emerge leaner and meaner

[_Michael]

REL: 1050 HRS Pumpkin Patch Limited

FORECAST: PPL: Pumpkin Patch - General Update

Pumpkin Patch Limited has today provided a general update on a number of
operational and financial matters.

Bank debt
As a result of ongoing inventory reduction strategies and the realignment of
the foreign exchange cover portfolio outlined below the Company is now
expecting total bank debt at July 2009 to be between $30m and $40m.

This is significantly better than analyst's current forecasts and the $60m to
$70m expectation previously communicated by the Company.

The Company's Chief Executive Officer, Maurice Prendergast, stated "Given the
current volatile nature of the global economy a major focus for us has been
the ongoing reduction in bank debt and the strengthening of our balance
sheet. Even though the Company already generates strong operating cash flows
we have taken a number of additional steps to reduce bank debt further. We
are now in an even stronger position to deal with the current challenges and
to take advantage of opportunities that typically arise in volatile times."

Prendergast added "We were disappointed by the recent inaccurate reporting by
Goldman Sachs JBWere on the aging profile of our bank debt facilities and we
believe that the market may have been negatively influenced by those
inaccurate reports. Even though we corrected the reports at the time we again
wish to confirm that the majority of our bank debt facilities expire in
December 2010."

Foreign exchange
The Company has realigned its foreign exchange cover portfolio to recognise
both the changing retail market conditions and the recent volatility in
foreign exchange markets.

Movements in the NZD lead to significant mark to market gains on the
Company's foreign exchange cover. The Company considered it prudent in the
current environment to realise some of these gains and apply the cash
generated to the reduction of bank debt and to further strengthen its balance
sheet.

Approximately $30m of mark to market gains have been realised resulting in a
reduction in bank debt. At current exchange rates there remains an additional
$10m of unrealised mark to market gains. The Company has placed additional
cover at current market rates to further protect earnings.

The realignment of cover will not materially impact earnings before interest
and tax over the next 2 to 3 years. Under International Financial Reporting
Standards (IFRS) the gains that have been realised are required to be taken
to earnings in the period in which the original foreign currency contract was
due to mature. Therefore the timing of the recognition of these gains through
earnings will be the same as if the realignment had not taken place.

Inventory levels
The Company continues to implement the inventory reduction strategies
outlined earlier in the year. Despite the challenging retail environment the
Company still expects to reduce inventory to levels that appropriately match
each market's requirements over the next 18 to 24 months.

Trading conditions
The current global economic situation continues to create challenging retail
trading conditions across all of the Company's markets, especially in the
United States. These conditions are not expected to significantly improve
during the remainder of the current financial year.

However in response the Company has moved quickly and has undertaken a review
of all areas of the business. This has resulted in a number of overhead
reduction initiatives, the most significant to date being the reduction in
salary and wages costs at store level and at Head Office in Auckland.

Although these changes are not expected to materially impact earnings in the
current financial year it does mean the cost base now in place better matches
the more subdued trading environment that is expected to prevail through into
the 2010 financial year.

As the Company is just entering the all important Christmas trading period it
is not in a position to provide any earnings guidance for the 2009 financial
year.

Summary
In summary Prendergast said "We expect retail conditions across all markets
to remain tough for some time so we are taking these steps to strengthen the
platform from which we operate. Although the restructuring of our foreign
exchange portfolio does not impact earnings it does significantly reduce debt
levels and further enhances our balance sheet. Overhead reduction initiatives
ensure our cost base better matches the environment in which we expect to
operate over the next year or so. All of these steps place us in a much
stronger position for when market conditions improve".

On behalf of the Board of Directors

Maurice Prendergast
Chief Executive Officer

[ratkin]

Wonder if they timed it because they were worried abo0ut price slipping below 1.00?

[_Michael]

Not sure but genuinely believe this to be HUGE news for them in terms of, finally, de-risking the balance sheet.

The balance sheet has been what has been scaring investors more so than the tough retail environment.

On the basis of today's news the worst of the risk is actually behind them, and will provide good returns in the coming years.

Also means they can comfortably pay dividends if need be. Looking closely to buy soon.

[winner69]

Not sure but genuinely believe this to be HUGE news for them in terms of, finally, de-risking the balance sheet.

The balance sheet has been what has been scaring investors more so than the tough retail environment.

On the basis of today's news the worst of the risk is actually behind them, and will provide good returns in the coming years.

Also means they can comfortably pay dividends if need be. Looking closely to buy soon.

Isn't it amazing how things have changed so suddenly .... wasn't that long ago companies BORROWED TO STRENGTHEN their balance sheets .... it was seen as bad to have no debt eh

[Dr_Who]

PPL 92 cents.

How much did Jane and Duke pay for the chunk of shares?

Pumpkin Patch says markets 'extremely difficult'
By GARETH VAUGHAN - BusinessDay.co.nz | Tuesday, 18 November 2008

hildren’s clothing retailer Pumpkin Patch says all its markets have been “extremely difficult” during the first quarter and it is probably yet to feel the full impact of the global credit crisis.

“This makes it very difficult to predict what the exact impact will be during 2009 and beyond,” Pumpkin Patch chief executive Maurice Prendergast told shareholders at today’s annual meeting in Auckland.

Prendergast said rising unemployment, falling consumer confidence, a lack of consumer spending power and increased competition were impacting all its markets.

“There is no doubt, as analysts are predicting, most retailers reliant on consumers will have reduced earnings this year.”
Pumpkin Patch has stores in New Zealand, Australia, the United States and Britain. It also operates a wholesale business with operations in the Middle East.

The retailer has cut staff numbers at its head office and in all its stores. It has also frozen the hiring of new workers and cut costs in areas of its operations that are not expected to produce returns over the next two years.

Capital expenditure for 2008-09 will be slashed to $16 million from $36 million last year.

[clearasmud]

Does anybody know does the reduction of debt by $40m increase equity by a similar amount?
If not now then in 2 years?
Cheers.
Top management don't you agree?

[ratkin]

They have a cunning plan , details to follow soon.

Cant really blame management for falling shareprice, nobody could of predicted the severity of the downturn, however they should come out the other side leaner and meaner

[Lizard]

Does anybody know does the reduction of debt by $40m increase equity by a similar amount?
If not now then in 2 years?

The reduction of debt has to have been achieved mostly by working capital management.

I was looking at ASX listed SFH and JST (now part of PMV) recently and was interested in how they manage to maintain such a different balance sheet/cashflow structure to NZ retailers. Their businesses seem to be funded heavily from their payables - providing 38% and 23% of total assets respectively c.f. PPL at 12.5%. Receivables also much higher for PPL. Do they have a very different business model that explains this?

Also, PPL seems to have very high levels of inventory relative to sales - 30% for PPL c.f. around 7.5% for the other two.

Hallensteins balance sheet/cashflow stats seem to sit somewhere in between the two types.

Can/should PPL be taking a leaf out of the books of SFH/JST? If they could reach the average of the SFH/JST ratios of receivables/payables/inventories in relation to sales, it looks like they would free up a total of $114m in cash.

[Lizard]

The reduction of debt has to have been achieved mostly by working capital management.


Oops, that part wasn't quite right - they're reducing inventory, but most of the debt reduction was from the favourable realisation of forex hedges.

[Dr_Who]

In a recession money would be better spent on debt reduction than to do a share buyback. They still have a $40-50m going into 2009. Who knows what impact this recession will have on PPL.

[Nevl]

People will still be having babies and NZ has just had the highest amount of babies born since the 60's. Actually recessions are usually pretty good for the birth rate as well so i predict a few good years for PPL starting the end of 09.

[BRICKS]

People will still be having babies and NZ has just had the highest amount of babies born since the 60's. Actually recessions are usually pretty good for the birth rate as well so i predict a few good years for PPL starting the end of 09.

TODAYS population in NZ is above and increases about 92 a day all customers
for PPG & PPL had a look at Paraparaumu new BabyWorld shop has been there for two weeks and going WELL..

[_Michael]

In a recession money would be better spent on debt reduction than to do a share buyback. They still have a $40-50m going into 2009. Who knows what impact this recession will have on PPL.

Debt will be $30-$40m by end of this FY.
Given their EBITDA run-rate, inventory reduction in progress and scaled back capital expenditure, this seems conservative.
Share buy-back is absolutely the best option for them given the (under!)valuation of the shares right now.
Remember, recessions don't last forever.

[POSSUM THE CAT]

Michael It had a fad product in a booming market. With a product that is no longer the in thing for the high income earners and those that have to have the very latest fad in everthing. What are they going to do in a very tight market. They have been going backwards for last three years. So how long will they last?

[upside_umop]

Its also giving the market a 'signal' of what the managment/directors think of the current value of the company. By signalling their intent to buy shares at this price states its undervalued and may actually decrease their cost of funds....which is quite a problem with credit situation atm.

Reducing debt will only show the managers are buckling down and risk averse...which may be the best thing if the 'signal' doesnt actually pull off.

Anyone know off hand when their credit facilities roll over?

[ratkin]

Interesting that retail sales in the UK have held up much better than expected , the "budget" they had overnight was also very proactive , ie cutting VAT etc.

Key ought to axe GST on food , that would do wonders for his popularity and give the poor more money to squander in the shops

[upside_umop]

axing gst on food will still make the poor complain....
relative food prices would be considered 'regressive' because rich could still buy proportionately more with the same proportion of income...they will never be happy. but yes...even though it will complicate the tax system, key should think about making a fruit/veges gst free system before labour does as part of their next election bribes....

haha getting a little carried away on the PPL thread...

[Crypto Crude]

hey upside...
you do realise that Pumpkin patch, is not related to fruit and vege...
:D
.^sc

[upside_umop]

Not anymore shrewdy...they started exporting pumpkins fromt their patch :rolleyes:

[_Michael]

I vote Rod Duke or Jan Cameron for Chair-person.

Greg Muir has to go, how can anyone take the company seriously by the investment community with his name associated.

Execs that oversee and cover-up corporate scams need to be removed from the NZ capital markets - end of story.

We need investors to have confidence in the things that are good about capitalism.

[winner69]

Still can't fathom the rationale for the share buy back ..... except for the ego trip in telling the market hey our shares are undervalued.

But that is only in the eye of the beholder anyway and many companies over the last year or so have found to their dismay that buy backs have not been a good investment but have conveniently forgotten about that.

It's only 5% of the shares (hardly going to do much to eps is it) anyway but surely $8m-$10m of 'spare cash' could have better used somewhere else.

Hardly anbody selling but they found a million of them the other day .... didn't seem to go through the market though .... wonder who they belonged to?

[winner69]

Hardly anbody selling but they found a million of them the other day .... didn't seem to go through the market though .... wonder who they belonged to?


The notice said they bought on market 1,000,000 at $1.08 on Dec 2

NZX price history shows 1,001,300 that day with oepn/high/low/close of $1.11 and only the 1,300 parcel at 1.11 was listed

Doesn't make sense unless it was Belg up to hos old tricks of doing special deals .... belg did say he was going to book his profits so must have sold his ahres back to the company.

[Lizard]

Hardly anbody selling but they found a million of them the other day .... didn't seem to go through the market though .... wonder who they belonged to?

That is very interesting - I am surprised the buyback rules allow for that. I thought it was called "on-market" buyback.

And I thought there were limits to the % of average daily market volume that could be bought - though I can't find details in the NZX listing rules (http://www.nzx.com/asset/sxdx_lr_7.pdf) - possibly covered in the Companies Act?

[winner69]

To get a feel for how bad times are for retailers like Pumpkin Patch in the US and Europe go to the Billabong website and have a read of the transcript of an analyst briefing.

The BBG announcement said eps might go down slightly in half one but over the year expect to see a 10% odd increase (instead of previous guidance of 12-16% increase) ... not too bad and the market didn't react too bad .... but when the cheif honcho started talking about footprint in NY being down 30% in October and 20% drop in comparable sales and the degree of discounting going on another 20% taken off the BBG share price

BBG and PPL are retailers relying on their brands to drive value so a lot in common ..... headlines don't always tell the real story

Saying .... maybe the PPL story is still optimisitic for the short to medium term .... watch this space

[Dr_Who]

The only thing holding this one up is the share buyback. A company with debt would be better off using the money to reduce debt than to artificially hold up the sp.

[Anna Naum]

The other interesting point about the BBG result is that if they are hurting that much (and they are a known brand) what does it mean for a brand like PPL. However remember that PPL main profit centres are AU and NZ....might be a reason for the 50% discount they are offering on some items in NZ

[Dr_Who]

This is how bad it is for the retailers out there.

Harvey Norman warns of store closures

Retailer Gerry Harvey is warning that some of the Australian stores in his Harvey Norman empire will close during the next six months because of the economic slowdown.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10547156

[winner69]

NBR's Shoeshine reckons the PPL share buy back is stupid or something like that .... fancy giving hard earned shareholders money back to a few who don't want to be shareholders

[Balance]

NBR's Shoeshine reckons the PPL share buy back is stupid or something like that .... fancy giving hard earned shareholders money back to a few who don't want to be shareholders

That applies to all share buybacks then?

Fisher Fund is just about all out of PPL so watch the price action then ....

[Nevl]

Yeah not too sure about the buyback. Put the money in the bank and pick up some good cheap assets in the New Year would be my vote. Interesting move by MHI today. I wonder if PPL could make a similar shift for the same benefits.

Anyway cash is king and i think that they could be missing opportunities for future growth by this buy back. In this environment there must be some outstanding assets in the UK and US that they could be looking at or even Ireland.

[Stranger_Danger]

Cash is king, but only if you use it. Otherwise you're just an idiot with cash.

You want lots of cash immediately *before* a downtown.

Once you're well into a downtown, you want to utilise that cash to do things. What "things" entail is up to management. Pumpkin Patch has chosen to use part of the cash to do a buyback.

The million dollar question is how far into the downturn we are, and whether now is the "perfect" time to do a buyback, or whether hindsight will prove they should have waited longer.

You can't manage with hindsight. You have to pull the trigger. If unsure, fire a bullet, wait a while, fire another. They're not buying them all back on one day.

Cash is king, but the reason for having it is to take options on a rainy day. We have a lot of rainy days now, and a buyback is an option.

Options are only useful if you take them. Otherwise you're a cashed up idiot throughout a whole economic cycle.

[Dr_Who]

Cash is king, but only if you use it. Otherwise you're just an idiot with cash.

.

Tell that to PPP and NZO. Two of the best performing oil stocks on the market. :)

[Nevl]

As you say. Cash is great as long as you use it but what PPL is saying is that the best investment in the whole world over the next 2 years is in PPL shares!! Really? Not sure about that personally. Expanding the PPL format into new markets I feel would be a better investment over the next 18months. There is a lot of uncertainty but people will still have kids!! And Grandparents will still be keen to spoil them.

[Stranger_Danger]

Nevl - expanding the PPL format around the world - in this environment - is one of the reasons the shares are a buck each.

If PPL closed down UK/US, my guess is the shares would go up by 30-40 cents in the short term.

That said, I'm happy for them to keep trying over there (as long as they contain cash burn as much as poss) but now is a time for focus, cash generation, debt repayment and capital management. That, in my view, is what PPL are doing.

[Nevl]

Given the amount of distressed assets around the world at the moment and given that it takes 18months to get new stores established and running then now is about the time they should be looking for new opportunities. By 2011 I think things will be improving so if you want to ready to go at the start of the recovery now and the next 6 months is a good time to be preparing. There must be a few retailers owned by private equity groups in which they could be doing due diligence. MHI's purchase in the USA is a good example of what can be acheived. A small investment in which they can learn about the new market while containing costs and the benefits of access to experienced staff and Management. Will be interesting to see how it is going.

I agree with the comment about cash generation and inventory and capital management. As for the debt repayment they have done pretty well with that in the last 6 months.

[Nevl]

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5404090.ece

As I said there are some quality distressed assets coming on the market which Pumpkin Patch could look at acquiring. This should be good news as the end of a major competitor should help the survivors. Hopefully PPL can pick up some of the best shops and customers. The Mini Mode Clothing brand could also play to there strengths.

Anyway I think this is a positive for PPL.

[Dr_Who]

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5404090.ece

As I said there are some quality distressed assets coming on the market which Pumpkin Patch could look at acquiring. This should be good news as the end of a major competitor should help the survivors. Hopefully PPL can pick up some of the best shops and customers. The Mini Mode Clothing brand could also play to there strengths.

Anyway I think this is a positive for PPL.

PPL has no cash! They have debt of over $40m!

They have debt and now using more debt to finance a share buyback... Hahaha. I just took PPL foff my watchlist when they announced the share buyback. Not interested in a company artificially holding up the sp in a recessive enviroment. Money better spent on reducing debt or possible acquisition of cheap assets.

[warthog]

Cash is king, but only if you use it. Otherwise you're just an idiot with cash.

Presuming the "idiot" got the cash from somewhere, and it is discretionary investment cash as opposed to the proceeds of bank heists and the like, the hog is puzzled by your use of the word "idiot", and suspects your view is just a recycled, context-less throwaway line.

Some very wealthy (successful? some would consider so) people - do what they do and simply stash their cash where it safely grows by inflation plus a small margin. Sure, they don't become super-rich, buy football clubs and massive leisure boats, but many of those who do didn't get their wealth from investing in the markets either.

[macduffy]

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5404090.ece

As I said there are some quality distressed assets coming on the market which Pumpkin Patch could look at acquiring. This should be good news as the end of a major competitor should help the survivors. Hopefully PPL can pick up some of the best shops and customers. The Mini Mode Clothing brand could also play to there strengths.

Anyway I think this is a positive for PPL.

I don't hold PPL but I'd have thought that the biggest thing going for them is their brand name/reputation which they have in NZ and Aust and are slowly building in UK and USA. The last thing they would want to do, even if they could afford it, would be to buy someone else's struggling operation ( and brand).
PPL is not a big company and just couldn't afford the diversion of executive time and attention. And that's just for starters.
All IMO. of course.

[Nevl]

PPL has no cash! They have debt of over $40m!

They have debt and now using more debt to finance a share buyback... Hahaha. I just took PPL foff my watchlist when they announced the share buyback. Not interested in a company artificially holding up the sp in a recessive enviroment. Money better spent on reducing debt or possible acquisition of cheap assets.

$40mill is not so bad given the size of the company and the quality of the assets. I am also disappointed in the share buyback and would prefer that they keep the cash so they can take advantage of these situations. They could easily get another 40mill and cherry pick some good assets from the receivers in the same way that MHI have done in the states. They should also be targeting the customers of Adams wholesalers to push their own brand.

[Nevl]

I don't hold PPL but I'd have thought that the biggest thing going for them is their brand name/reputation which they have in NZ and Aust and are slowly building in UK and USA. The last thing they would want to do, even if they could afford it, would be to buy someone else's struggling operation ( and brand).
PPL is not a big company and just couldn't afford the diversion of executive time and attention. And that's just for starters.
All IMO. of course.

Not suggesting that they take over Adams in total as PPL is as you say too small. But 8 or 9 stores in good areas could be ok. There are over 300 to choose from. All depends on the receiver but a good offer would not be ignored. Since the UK operation is already up and running it would not require massive management time to take on some extra stores and also hopefully some quality staff as well.

[winner69]

Note that Adams was broke less than 2 years ago and was taken from the admnistrators for GBP15m .... and marginally profit but broke again ..... not a good look eh .... and the new administrator is likely to get less this time around as you need to wonder about the viability of the Adams concepts and propositions relative to the cost of doing business .... hell running 260 stores in the UK and 116 overseas and having 2,000 employeses costs a lot of cash.

Adams revenue at 150GBP puts them (as an organistion) about the same size as Pumpkin Patch

Times real tough in the retail world in UK .. and clothing seems to be one of the worst affected sectors

Might be opportunties for PPL to get a few sites with 'cheaper' rentals than last week but I would more worried about what is happening to PPL sales in UK and US at the moment. They did say that some(most?) of the stores that had been opened for 2 years or more were now EBIT positive but things can change rather quickly

Buying 'distressed retail assets' in the UK .... just ask Eric Watson what can happen!

Interesting times ahead

[winner69]

$40mill is not so bad given the size of the company and the quality of the assets. I am also disappointed in the share buyback and would prefer that they keep the cash so they can take advantage of these situations. They could easily get another 40mill and cherry pick some good assets from the receivers in the same way that MHI have done in the states. They should also be targeting the customers of Adams wholesalers to push their own brand.


I'm still puzzled about that share buyback .... only used $1m so far and by the looks of it that was 1 transaction (with a friendly party at 108 .... conjecture that is) ... so can't say they are actively holding up the share price .... maybe waiting for the 85 cent mark again

[Nevl]

Note that Adams was broke less than 2 years ago and was taken from the admnistrators for GBP15m .... and marginally profit but broke again ..... not a good look eh .... and the new administrator is likely to get less this time around as you need to wonder about the viability of the Adams concepts and propositions relative to the cost of doing business .... hell running 260 stores in the UK and 116 overseas and having 2,000 employeses costs a lot of cash.

Adams revenue at 150GBP puts them (as an organistion) about the same size as Pumpkin Patch

Times real tough in the retail world in UK .. and clothing seems to be one of the worst affected sectors

Might be opportunties for PPL to get a few sites with 'cheaper' rentals than last week but I would more worried about what is happening to PPL sales in UK and US at the moment. They did say that some(most?) of the stores that had been opened for 2 years or more were now EBIT positive but things can change rather quickly

Buying 'distressed retail assets' in the UK .... just ask Eric Watson what can happen!

Interesting times ahead

Thanks for that winner. 2 ways of looking at that. One that the new owners did all the hard pruning and they got run over by the credit crunch or that the assets were always crap and still are. Still 150mill is a lot of money and looking for a new home. That demand has not all disappeared even 15mill would be nice to get for PPL.

I am looking forward to seeing what is happening to sales as well. Still most people will keep there jobs and have children.

[BRICKS]

BEEN in there store at OTAKI if that's there best in NZ you can leave me out
hard stock to love and being overseas is WORSE..

[Dr_Who]

Not suggesting that they take over Adams in total as PPL is as you say too small. But 8 or 9 stores in good areas could be ok. There are over 300 to choose from. All depends on the receiver but a good offer would not be ignored. Since the UK operation is already up and running it would not require massive management time to take on some extra stores and also hopefully some quality staff as well.

I tend to agree. If you can get basement prices for the stores, then it is worth a look. You acquire the location and stores and re-brand it Pumpkin Patch. That is assuming the stores have great location and good lease terms. Saves alot of time and energy to acquire stores set up with good locations... eg: WHS with Woolworths interest.

I am reluctant to buy any PPL at these levels and in this climate. Just have to wait and see what their strategy is and what the macro picture brings us next year.

[BRICKS]

I tend to agree. If you can get basement prices for the stores, then it is worth a look. You acquire the location and stores and re-brand it Pumpkin Patch. That is assuming the stores have great location and good lease terms. Saves alot of time and energy to acquire stores set up with good locations... eg: WHS with Woolworths interest.

I am reluctant to buy any PPL at these levels and in this climate. Just have to wait and see what their strategy is and what the macro picture brings us next year.

TOLD you before don't wast with PPL come and BUY PPG you get the baby cloths thrown
in for FREE..

[macduffy]

I tend to agree. If you can get basement prices for the stores, then it is worth a look. You acquire the location and stores and re-brand it Pumpkin Patch. That is assuming the stores have great location and good lease terms. Saves alot of time and energy to acquire stores set up with good locations... eg: WHS with Woolworths interest.

I am reluctant to buy any PPL at these levels and in this climate. Just have to wait and see what their strategy is and what the macro picture brings us next year.

I don't see any similarity with the WOW/WHS situation.
WOW is an extremely strong and profitable company who are interested in WHS as a way to expand their Big W operation to NZ. And they can afford to do so.
PPL is a tiddler by comparison and still struggling to achieve consistently strong profitability. They don't have the resources or the management capacity to do much more than they are at present. Picking up a few extra UK stores is nothing like what Woolworths had in mind, and maybe still do, for WHS.

;)

[winner69]

So Jan Cameron bought the 3 mill that changed hands on friday taking her interest to more than 9%

Her continued buying as well as the company buy back some platform under the share price now

Take it the 1 million parcel the company bought back and the 3 million last week was same seller ..... surely Fisher not given up .... another reason to buy

[Balance]

Sell when Fisher buys and buy when Fisher sells.

Been right since 1992!

[Dr_Who]

So Jan Cameron bought the 3 mill that changed hands on friday taking her interest to more than 9%

Her continued buying as well as the company buy back some platform under the share price now

Take it the 1 million parcel the company bought back and the 3 million last week was same seller ..... surely Fisher not given up .... another reason to buy

I recall JC bought some PPL at $1.40 a few months back. Did you also follow and bought some at $1.40?

It seems like she is just a passive investor looking at her holding in PPG.

[Balance]

She bought some at well over $3.00 as I recall.

But with her kind of money, $300m odd, she probably invests with much longer term view and she can afford to lose the whole lot so can take big risks. Remember people buying FBU at $3.00 years ago and it dropped to as low as $1.80. Several years later, who is the smart one and who is the ones who missed out?

PPL is too tough to buy currently. Better to wait and buy the last lot off Fisher. Fisher is being played like a hooked fish.

[bull....]

Wouldnt be surprissed to see ppl close operations in both the us and england this year as both will be making big losses.

[winner69]

I recall JC bought some PPL at $1.40 a few months back. Did you also follow and bought some at $1.40?

It seems like she is just a passive investor looking at her holding in PPG.

No I didn't follow her and buy some at $1.40 ... and haven't followed her yet and bought some at $1.01 either

As Balance says not the best time to buy ... wait and see what eventuates

TA wise the OBV still not looking all that good .... and the big volume days have been down days which Phaedrus reminds us is a bad sign

[winner69]

Dr Who -- Cameron bought her 1st lot at $1.60 and the 15 million she now has has averaged $1.42

Rod Duke bought 14 mill at $1.58 early last year as well

As Balance says probably passive money and in a few years or so will look back and say wasn't that a good buy

But me personally I'd hate to be 30% and $7m down after a few months but then when you as much as she has to spend you ahve to take your opportunities and buy when the large chunks become available

Maybe she not buying from Fishers cause they do seen to have filed any SSH notices since they said had 6%

[Dr_Who]

I am also keeping a close eye on PPL.

There will be much more pain before any gains. There has been rumours that it is a potential T/O target, but I cant see it in this climate. All the other retailers in similar PPL sector are also struggling and have little to no cash to splash.

I hope PPL can ride out this environment. But I do have a funny feeling the next few announcements can be ugly.

I have voiced my dislike in PPL increasing debt to fund a share buyback. This is shared by the market with retrenchment of the sp. The company would be better to spend the funds reducing debt and seeking opportunities to add value.

I am also starting to question managements ability to strategise and prepare the company for a tough environment.

[bull....]

19-01-2009 03:47 AM
bull.... Wouldnt be surprissed to see ppl close operations in both the us and england this year as both will be making big losses..

Nice gains from last year for those that hold.

[Stranger_Danger]

Yep, looking good. Management making the right calls. Still hold.

[Balance]

TOLD you before don't wast with PPL come and BUY PPG you get the baby cloths thrown
in for FREE..

Good call on PPG - stock has performed very well.

Likewise, PPL.

Lesson learnt - when everyone gets negative, it's time to get interested!

[BRICKS]

Good call on PPG - stock has performed very well.

Likewise, PPL.

Lesson learnt - when everyone gets negative, it's time to get interested!

WE live in very negative times just look at the NZX if it was any slower it could fall over
that would even go down as NEWS..

[ratkin]

Looks like the management are on the ball. This downturn has sorted out the good from the bad and i suspect pumpkin patch are going to emerge leaner and meaner

[bob.not.a.builder]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10581592

I would of thought that this would of caused negative impact on SP

[winner69]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10581592

I would of thought that this would of caused negative impact on SP

Bob ... stops the bleeding .... like losses from these stores recuced from $13m to $3m in 2010 ..... PPL bottom line better off by $10m from what most expected

Also signaling debt being reduced in line (if not better) than stated is good .... and probably a few punters are pleased that management is being strong and doing something ..... even though a costly exercise.

In these times the more jobs you get rid off the higher your shareprice goes.

[winner69]

Its just as well that sharemarkets are forward looking because today PPL said they are going to write off an amount equivalent to the last 2 years profit.

Most of the $40m odd is non cash items -- at least non cash this year .... was cash once though wasn't it ... and don't forget that this $40m reduces PPLshareholder equity.

A studt a few years ago came up with more than 25% of reported profits on the S&P500 were subsequently written off ... and no doubt with what has happened over the last year that number is even higher.

Just a rave ..... though looking forward PPL should be able to 'report' $35m plus profits which would support a shareprice today of at least $2.50 on reasonable multiples .... thats how the markets work ... good stuff eh

[winner69]

Bugger! !


...... I trusted the management but the charts said "be careful". Bugger TA ... Stuffed me again. (waiting for Ph to tell I read the entrails wrong again!)

discl: hold just 1000 :( to keep my hand in the game!

I thought at the time that you must be running some pretty tight stops ... esp for you belg who usually prepared to give and take a bit

Price didn't look too weak around the time you sold out

Better get back in again quick in case you miss the ride to $2

[Balance]

Reminding me of RBD. Beaten up stock and ignored by most in the market.

But company keeps delivering positive surprises and share price sluggishly moves higher in reaction to the news.

[ratkin]

Wouldnt be suprised to see the irish stores closed down next.
They are very wise to terminate sooner rather than later.

[Phaedrus]

Belg, you are one seriously conflicted individual! Here is a post of yours from August :-
I've been buying PPL over the last two months but always on down days and never such that I push the price above its opening. (not a TA'er as you all know) Later the same day, you further elaborated.... "Fundies buy value or situation plays. At present I'm a very temporary holder in that on any sign of weakness I dump the lot." (!) Belg, fundies hold until/unless the fundamentals change. In any case, a down day on which the price never gets above the Open is the embodiment of weakness. So, you are buying on weakness.... in a downtrend.... and tell us that you are going to SELL on "any sign" of weakness!!!! Huh?
There is enough to justify a valuation of over $2.00. Will sit and hold and buy some more if we get back down to the 1.40 mark which.... should be soon).Belg, you said you were going to Selll if the price dropped - not buy more! You were continuing to buy a downtrending stock, adding to an "investment" that was already underwater. You clearly don't believe in the use of Stops!
I'm not averaging down (!)... I'm taking a long term position and whether the average price is 1.60, 1.50, or 1.40, or even 1.30 ... It'll take a lot more than TA alone to make me change my mind. I'm a very patient buyer when required and will be quite happy to continue buying for the next six months. A great company establishing an international brand ... and at this price (1.45?) an absolute steal! Belg did indeed continue buying, adding to his losing investment. PPL fell to 80 cents before the trend reversed, triggering Buy signals.
Bugger! I trusted the management but the charts said "be careful". Bugger TA ... Stuffed me again! Belg, when PPL was in a steady downtrend you were breaking all the TA rules by buying. Finally, after a 2 year downtrend when PPL is in a clear uptrend (and still short of your valuation of "over $2") Belg, the patient fundamentalist, sells!.... on the purported use of Stops, no less!! Go figure! Where were your stops when you really needed them - when you were buying a downtrending PPL at around $1.60!

A fundamentalist that runs tight stops is a chimera. There is no such animal!

http://h1.ripway.com/78963/PPL71.gif

Here is a PPL chart with two simple indicators such as might be used by conservative longterm investors.

[ratkin]

Why have some of your charts from earlier in the thread dissapeared? Page 19

[winner69]

There's even one of those Golden Cross things about $1.15 odd mid May as well

Jeez a 30% since a Golden Cross in a month or so ain't too bad ... those Golden Cross's must be good

Even keeping an eye on the 50MA line since the price went above it in March (at just under a $1) would still have you in PPL

After yesterday announcement that $2 Belg mentions is almost a certainty

[BRICKS]

There's even one of those Golden Cross things about $1.15 odd mid May as well

Jeez a 30% since a Golden Cross in a month or so ain't too bad ... those Golden Cross's must be good

Even keeping an eye on the 50MA line since the price went above it in March (at just under a $1) would still have you in PPL

After yesterday announcement that $2 Belg mentions is almost a certainty

WILL not happen that means that 2 KIWI`s would have to BUY had to find these FELLOWS..

[Phaedrus]

I use Ripway as my webspace provider. You need to log-on at least once a month to keep your account open. Last year, while on an overseas trip for a couple of months, I forgot all about this and Ripway bumped hundreds of my charts. I am able to reproduce any of them, but it is a lot of work so generally I haven't bothered.

W69, this chart shows the "Golden Cross" that you mention. They certainly are "in" at the moment! The "Death Cross" gave a reasonably good exit as well. Crossovers of these 2 moving averages give quite late buy/sell signals, though. They are even later than those generated by a 200 day ma used in isolation. Very conservative investors (some even fundamentalists!) use a 200 day ma to keep them on the right side of major trends. Such an indicator keeps them out of all the short/medium-term "countertrend" trades that they have no interest in.

http://h1.ripway.com/78963/PPL71gc.gif

[winner69]

Quote from sharechat - "Some investors will be concerned by the use of Chapter 11, but it offers Pumpkin Patch with the best structure to conclude what is clearly an earnings and value-accretive restructuring," Doak says.

Irrespective of the moral/ethical issues of using bankruptcy laws to your advantage saved PPL a lot of cash .... and good to see a little old kiwi company screwing greedy mall owners in US

Makes you wonder what would have happned to US operations if the parent company hadn't guaranteed one expensive lease and if Westfield hadn't come to the party for a bit of rent relief in other sites ... maybe a total withdrawal

Good stuff eh ... Pumpkin Patch and General Motors have something in common .... given another life by US bankruptcy laws

[Stranger_Danger]

....Yet it couldn't buy a bid at $1.00 a share when you could pretty much buy whatever you wanted.

Markets huh?

Disc : happy holder

[ratkin]

The upsurge in retail spending will see the price rise

[ratkin]

There has been for a few years now

[Balance]

Sell when Fisher buys and buy when Fisher sells.

Been right since 1992!

And yes! You double your money buying off Fisher Fund.

This is TOO EASY!!!!!!

[Stranger_Danger]

I agree, money for jam.

I'd send Fisher Funds some wine to thank them, but I wouldn't want them to get drunk and thus improve their stockpicking and market timing.

[Balance]

A scenario is that the private equity players will take this company out now that economies are turning around. Buy cheap now and flick back to the market in 2 years' time.

That's the game.

Be there or be square.

[macduffy]

Me there ... ridden the wave ... Bal, me old mate, can't see the PPL founders selling out for a very long time. They love this baby.

But they might be tempted to go into partnership with a private equity firm, rather than with the investing public, if the right deal is offered to them.

;)

Not holding.

[Balance]

Those who laughed at Rod Duke and Jan Cameron now looking stupid.

Big laugh on Fisher Funds - BUy High, Sell Low!

[macduffy]

I wouldn't be too hard on Fishers, Bal.

All funds are vulnerable to having to sell Low in a market downturn. That's ususally when the big rush for the exits (redemptions) happens. One of the reasons that I don't invest in managed funds.

:)

[kizame]

Those who laughed at Rod Duke and Jan Cameron now looking stupid.

Big laugh on Fisher Funds - BUy High, Sell Low!

I find that remark really childish.
People make mistakes no matter how professional,or knowledgible they claim to be.
I bet you have made some yourself you thought were pretty stupid,I know I have many a time,the fact you are in the public eye,and managing their money makes it no easier.

[Dr_Who]

I find that remark really childish.
People make mistakes no matter how professional,or knowledgible they claim to be.
I bet you have made some yourself you thought were pretty stupid,I know I have many a time,the fact you are in the public eye,and managing their money makes it no easier.


They are not paid huge fees to make mistakes that cost huge amount. I recall the reason most small cap stocks sp went up was because Fisher was buying and pushing up the price...lol

I was very close to buying PPL near the bottom, but decided to stick to resources instead due to the appalling unemployment figures.

I agree with Balance, hence I am abit like Mcduffy and would never ever invest in managed funds.

[Balance]

They are not paid huge fees to make mistakes that cost huge amount. I recall the reason most small cap stocks sp went up was because Fisher was buying and pushing up the price...lol

I was very close to buying PPL near the bottom, but decided to stick to resources instead due to the appalling unemployment figures.

I agree with Balance, hence I am abit like Mcduffy and would never ever invest in managed funds.

Precisely - Fisher has blown big bucks buying stocks like PPL, Sealegs and Creditcorp very very high and then, sell out very very low. And they still charge management fees to do so.

One mistake is ok but 7 out of 10 ?????? Buy PPL at $4.00 and sell out at 70% loss?????

[Stranger_Danger]

Balance - you in CCP too? I'm up 4-fold on that one - thanks Carmel!

[Balance]

Balance - you in CCP too? I'm up 4-fold on that one - thanks Carmel!

We need to shout her a meal soon ... she is such a predictable 'buy high, sell low' fund manager.

[re@der]

Comvita is another that fisher funds bailed out on only to see a 30% gain.

[ratkin]

They handled the recession very well, look set fair for the future

[ratkin]

At the time they couldnt give them away. I bought some just above that price but even i was irrationally anxious.

[kizame]

2.00 breached again on good volume ... All Good! :)

Are you trying to re-convince yourself,or the many anonymous eyes that read these threads,that you made a timely purchase.

This stock will be huge IMOP,it normally takes a retailer 12 years to spread across the US,but the pumpkin already had a head start with aus & nz,so had cash flow and momentum.

[Balance]

Those who laughed at Rod Duke and Jan Cameron now looking stupid.

Big laugh on Fisher Funds - BUy High, Sell Low!

Be careful as Fisher Fund may be buying!

[buns]

Oh this Katmandu result couldn't have worked out better for me! I've been considering getting back into PPL for some time now and was impressed with Katmandu's sales figures,I'm totally ignoring their stupid bullish forecast.

I'm expecting a decent result is on the way, and look forward to growth in Aussie with this huge chunk of cash in the bank (after an increased divy).

This one ticks all the long term investing boxes for me, now just to time my entry

[Sauce]

Oh this Katmandu result couldn't have worked out better for me! I've been considering getting back into PPL for some time now and was impressed with Katmandu's sales figures,I'm totally ignoring their stupid bullish forecast.

I'm expecting a decent result is on the way, and look forward to growth in Aussie with this huge chunk of cash in the bank (after an increased divy).

This one ticks all the long term investing boxes for me, now just to time my entry

I'm starting to come the same conclusion Buns.. PPL looks like it might be going cheap. In five to ten years many people may well wish they had the fortitude to buy up while the going was at its toughest.

[buns]

Hmm for those people to potentially look back in 10 years time, PPL will need to be doing Farley handy in the UK and USA. They seem confident about things going their way in the UK, and expect to break even in FY11, these seem in reach (unlike katmandu's projections) after looking at their previous results. A small bit of traction in the UK, with a now 'under geared' balance sheet looks like a good thing for growth in a big market.

If they maintain a decent margin similar to the one pre recession from these 30/40 new Aussie stores, plus this potential ‘lucrative wholesale deal’ with China (entrance into 400+ stores), I think there is enough value in PPL without the UK and US at this stage.

I think the other possibility is, in the medium term for this dividend to go up again.

[upside_umop]

Hi Buns and Co,

PPL caught my attention a few days ago, too.

Re your comments regarding UK: Have PPL updated impact of the fiscal changes in the UK? I'd expect this to be negative for PPL given the increase in VAT etc. Consumer loses short term but economy will gain long term. Also, NZD:GBP isn't the greatest.

USA: Hit the bottom of the trough? Nothing new to report really.

AUS: Good NZD:AUD and should continue into the future. Australia...well, no more said. Its the 'lucky' country.

NZ: We should ride off the back of Australia, but there are still risks.

China would be huge. Was this in the last update/report? Sorry, I have just starting having a look. I was impressed on how management acted in the GFC in maintaining cashflow and reducing debt.

Still, we don't buy into downtrends do we? haha

[Sauce]

Hmm for those people to potentially look backin 10 years time, PPL will need to be doing Farley handy in the UK and USA. They seem confident about things going their way in the UK, and expect to break even in FY11, these seems in reach (unlike katmandu's projections) after looking at their previous results. A small bit of traction in the UK, with a now 'under geared' balance sheet looks like a good thing for growth in a big market.

If they maintain a decent margin similar to the one pre recession from these 30/40 new Aussie stores, plus this potential ‘lucrative wholesale deal’ with China (entrance into 400+ stores), I think there is enough value in PPL without the UK and US at this stage.

I think the other possibility is, in the medium term for this dividend to go up again.

I think thats spot on buns.

[buns]

Hmm, never took into account the pound, yeah not ideal. Will we see the impacts of those fiscal changes in FY10?

FY11 is a huge year for them. If they can land any one of these new activities ahead of them we should see PPL enter higher grounds.

These new activities being the 30/40 Aussie stores, the test of the new low cost/high turn over stores under a completely new name (are they going to wholesale this stuff?), UK break even? New wholesale deals in Asia?

[percy]

I would be fearful buying a retail stock at present.Retail is terrible at present.PPL has quiet large stores and any down turn will hurt profits.Malls do not bring rents down to met the market.Retail has slowed down not only here but in Aussie,US and UK.

[buns]

Retail in NZ/Aus is terrible? I'm not seeing it. Sure WHS had a bad 3rd qtr but put that one mainly down to electronics. Hall/Glassons and Katmandu both produced increased sales figures on pcp. PPL also did very well during the recession when retailing was very grim.

I think any huge drop in sales figured will be from the continued move to cheap kids clothing.

[percy]

Retail in NZ/Aus is terrible? I'm not seeing it. Sure WHS had a bad 3rd qtr but put that one mainly down to electronics. Hall/Glassons and Katmandu both produced increased sales figures on pcp. PPL also did very well during the recession when retailing was very grim.

I think any huge drop in sales figured will be from the continued move to cheap kids clothing.

The other day Whitcoulls came out and said sales were very slow,particulary in Aussie.Harvey Norman said sales have slowed.Michael Hill sales have slowed.Briscoes cannot make Living and Giving work.Big turnover in mall shops with more and more cheap Asian **** shops.Smiths City note that furnishing sales and floor coverings sales very poor. Leeemings owners having to put up more dough. Naomi B ladies shop in Aussie struggling.Sales every where.Empty shops every where.Postie Plus sales slow.Retail is terrible at present.Empty Malls in US.Dan Carter's shops closed.Ali Williams" shops closed.Eric Watson US brand in trouble.

[buns]

The other day Whitcoulls came out and said sales were very slow,particulary in Aussie.Harvey Norman said sales have slowed.Michael Hill sales have slowed.Briscoes cannot make Living and Giving work.Big turnover in mall shops with more and more cheap Asian **** shops.Smiths City note that furnishing sales and floor coverings sales very poor. Leeemings owners having to put up more dough. Naomi B ladies shop in Aussie struggling.Sales every where.Empty shops every where.Postie Plus sales slow.Retail is terrible at present.Empty Malls in US.Dan Carter's shops closed.Ali Williams" shops closed.Eric Watson US brand in trouble.

Thanks for that percy, I only did a quick search on NZ retailers of a similar size, and brand to PPL. I'll consider this when weighing up an entry price.

Reasons for the aussie market to drop though? You mention some aussie retailers outside of PPL's sector, I can't think or any reason clothing outlets would drop during the winter periods..

[Sauce]

The other day Whitcoulls came out and said sales were very slow,particulary in Aussie.Harvey Norman said sales have slowed.Michael Hill sales have slowed.Briscoes cannot make Living and Giving work.Big turnover in mall shops with more and more cheap Asian **** shops.Smiths City note that furnishing sales and floor coverings sales very poor. Leeemings owners having to put up more dough. Naomi B ladies shop in Aussie struggling.Sales every where.Empty shops every where.Postie Plus sales slow.Retail is terrible at present.Empty Malls in US.Dan Carter's shops closed.Ali Williams" shops closed.Eric Watson US brand in trouble.

Things might be bad for a long time, but they won't be bad forever, and you have to take your hats off to management they have done an exceptional job in dire conditions. I don't own any, but I am looking closely. Percy - when retail was going nuts in 2007 was that a better time to buy?

[Sideshow Bob]

Silly question and these things are quite rare these days, but with a recent arrival in the household, do they offer a shareholder discount?? :-)

[percy]

Things might be bad for a long time, but they won't be bad forever, and you have to take your hats off to management they have done an exceptional job in dire conditions. I don't own any, but I am looking closely. Percy - when retail was going nuts in 2007 was that a better time to buy?

I think your statement is correct.It is allways very hard to buy against the trend,and often very costly.My posts were meant as a warning for those posters who may be unawere of the problems retailers are having at present.I would hold off buying until the tide turns.

[Snow Leopard]

because I bought some today :scared:.
I also hope that is a long term relationship :eek2:.


regards
Paper Tiger

[percy]

sorry to be negative on retail.Retail is always very poor during elections.The Aussie election result will mean uncertainty in both the finnancial markets and retail sales.

[buns]

sorry to be negative on retail.Retail is always very poor during elections.The Aussie election result will mean uncertainty in both the finnancial markets and retail sales.

Never heard this one, I'm always interested in these weird macro relationships. Can you explain how this one works Percy? Either way, PP are presenting on 30 June right? So any impact from this won't be shown in these numbers.

I've got no idea how this result is going to look, to tell the truth. I can't find any hard or solid trends to help me understand what is happening in retail right now, so many in-consistencies. This is keeping me away from re-entering pumpkin patch; I'm also keen to possibly wait this one out another 6-10 months to see how these new store trials turn out.

Disc- none held, but only share on my NZX watch list

[ratkin]

Up 14 today , must be a good result around the corner

[Snow Leopard]

Up 14 today , must be a good result around the corner

Serious buying. Volume as high as it has been for a year!
Let see where it goes from here.

regards
Paper Tiger

[Balance]

Or takeover in the offing?

[ratkin]

They are releasing their results on wednesday , price rise bodes well

[winner69]

Might need to come back for more Belg

[ratkin]

Seems a decent result


Key Highlights
- Net profit after tax up 76% to $25.5m
- Net profit after tax (from continuing activities) up 38%
- Total dividend for the year up 27% to 9.50 cents per share
- Improved EBIT margins across all retail markets
- Launch of the new brand Charlie & Me
- Entry into 4 new Wholesale markets
- The Company is well positioned for when trading conditions improve
and to take advantage of growth opportunities across markets

The launch of the Charlie & Me brand and the ongoing development of new
wholesale markets is expected to open up a new phase of long term growth for
the Company. Add to this the growth opportunities the Pumpkin Patch brand
already has in its existing retail markets and the Company is well placed to
deliver long term rewards to shareholders

[winner69]

AA true blue chip that should be on a PE ratio that reflects how well this company grows and performs.

Maybe they are already on that PE belg .... it's just that a lot of other stocks are over valued

[ratkin]

They seem very well managed , they have performed very well in difficult conditions . The exit from the states was well handled and they have been able to improve margins and cut out the fat. Should be very lean and mean when conditions improve.

[buns]

Not sure if that was a great result or not.

Sure everything is pointing up, but that is compared to last year when they took a lot of one offs (closing USA) - would have be nice for them to exclude those.

Where you see the proper compairsons is in sales, which were down everywhere, and near 6% in there main country in Aussie. UK up a tad, but hit on the FX.

Amazes me that pp has grown in a market which only covers 25% of kids clothes, this new line could be make or break. chances of them nailing it? I think high, for all reasons stated above, i.e managment..

[ratkin]

ceo was sounding very confident on telstra buisness this morning. Didnt seem worried by the revenue drop , putting it down to the recession and being similar as other retailers.
Was talking up a big future for the wholesale division and the new charlie and me range

[buns]

Yip I'm sold, and picked up a package yesterday. Intending to hold very long term.

[h2so4]

Yip I'm sold, and picked up a package yesterday. Intending to hold very long term.

I think it's a good choice.

[percy]

I brought a few HLD in aussie.Will be interesting to see whether their Mothercare stores will have an effect on PPl.

[winner69]

So Muir been given the message by shareholders that they don't want him tainting the board any more

Reputation is important and he did a pathetic job at Hanover .... so his association with Hotchin et all has ruined his reputation .... maybe send some time in the clanger with his mates .... now that would be setting an example

[percy]

So Muir been given the message by shareholders that they don't want him tainting the board any more

Reputation is important and he did a pathetic job at Hanover .... so his association with Hotchin et all has ruined his reputation .... maybe send some time in the clanger with his mates .... now that would be setting an example

Not funny winner69.I have the misfortune to have some TruTest shares.Yes Muir is running that.It has been so badly mismanaged he will feel quiet at home there.If he goes to the clanger I wish he would take some TruTest directors with him.If you want a good laugh at my expense have a look to see who the chairman of TruTest is.

[winner69]

Not funny winner69.I have the misfortune to have some TruTest shares.Yes Muir is running that.It has been so badly mismanaged he will feel quiet at home there.If he goes to the clanger I wish he would take some TruTest directors with him.If you want a good laugh at my expense have a look to see who the chairman of TruTest is.

Percy ... funny how the same old names keep popping up .... imagine the old boys club talk with this lot .... how much we lost this year? Any clues how we can actually run a company properly?

Betcha they are happy with their pay packets and as long as she'll be right you will OK .... just remember we are going through the deepest GFC for decades so its not their fault is it .... ha ha

[percy]

Percy ... funny how the same old names keep popping up .... imagine the old boys club talk with this lot .... how much we lost this year? Any clues how we can actually run a company properly?

Betcha they are happy with their pay packets and as long as she'll be right you will OK .... just remember we are going through the deepest GFC for decades so its not their fault is it .... ha ha

Where they have the section in the annual report where they state how many were earning over this amount etc,I think even the tea lady was paid over $120.000.I suppose she/he is a specialist laffe blender.Do not think they will ever earn enough to consider anything for the shareholders,while the company is loaded up with overpaid underperformers.
You are right about the same old names.I may not be very bright,but I have a good memory.
Back to Pumpkin Patch.I can only think of it being a "win,win"situation and feel this great company will attract a capable replacement for Muir.

[forest]

Muir is on the way out !!http://www.sharechat.co.nz/

[winner69]

Gaynor pretty tough on Muir and who can blame him

Even with Muir gone things prob won't improve

With the shareprice still lagging at $2 odd (which doesn't make the 2004 IPO much of a success) all the indications are that unless things change at the top maybe what Gaynor says will come true - quote

These fund managers took the view that shareholders could either endorse Pumpkin Patch's inward-looking culture and head down the same route as Tourism Holdings or vote for a new era of excellence that would start the company on the same path as Fletcher Building.

It can be argued that Pumpkin Patch is already looking more like Tourism Holdings than Fletcher Building as the retailer and the tourism companies have both substantially underperformed on the benchmark


Thats awful -- PPL compared to THL -- sad really

[Balance]

Gaynor pretty tough on Muir and who can blame him

Even with Muir gone things prob won't improve

With the shareprice still lagging at $2 odd (which doesn't make the 2004 IPO much of a success) all the indications are that unless things change at the top maybe what Gaynor says will come true - quote

These fund managers took the view that shareholders could either endorse Pumpkin Patch's inward-looking culture and head down the same route as Tourism Holdings or vote for a new era of excellence that would start the company on the same path as Fletcher Building.

It can be argued that Pumpkin Patch is already looking more like Tourism Holdings than Fletcher Building as the retailer and the tourism companies have both substantially underperformed on the benchmark


Thats awful -- PPL compared to THL -- sad really

Gaynor is the master of use of selective statistics to prove whatever point he wants to make - against the facts.

Compare PPL with NZ50 since it listed in 2004 - and that's a fairer comparison and PPL has outperformed many other retailers.

Also, whatever happened to Gaynor's "NZ should follow Ireland, the Celtic Tiger,"???????

Or for that matter, avoid NZ market as it was missing out on the IT boom in 1999/2000 - another Brian Gaynor special?

[bull....]

Brian Gaynor is correct and MP of PPL is incorrect.
I get over 24 quarters NZX50 + 7.46% and PPL - 34% and over 12 mths NZX50 +5.36% ppl - 2.6%

Actually THL has outperformed PPL over the last 12mths with an 8% return.

[Balance]

http://file.nzx.com/000/308/4376308.pdf

The above shows PPLs since listing 20 years ago and the last 2 years ... Lies, damn lies and statistics :)

Irrespective, Greg Muir is gone and that is a big positive for PPL, whether Maurice P agrees or not.

It's the series of bad judgement by Greg which makes him unsuitable to chair PPL and be a director - allowing Hanover to lend as it did (after lending his name to the company along with Richard Long, making related party loans to Eric & Mark, then agreeing to paying out huge dividends to same two, then recommending and supporting the moratorium which allowed Eric & Mark to park some problematic loans and assets with Hanover, and then there's the Allied Farmers deal.

The audacity of the guy to stand for re-election as Chairman!

Oh, I forgot to mention that Greg had the full hearted support of Fisher Fund (buy high, sell low - PPL, RAK, BGR, TUA, SLG etc). So that makes it alright.

[buns]

Falling again, the depth here is shocking.

Interesting to see how they cope over Xmas.

Overall - This has to be some of the best value on the NZX right now.

[winner69]

Falling again, the depth here is shocking.

Interesting to see how they cope over Xmas.

Overall - This has to be some of the best value on the NZX right now.

Still about the same price as when you posted ... suppose that is good eh

So still the best value on the NZX at the mo?

Punters seem to have taken miff it lately ... so maybe investors need to step up

[buns]

Everyone hanging in there? Down to $1.59 now. Not far off my entry price during the recession!!

I suppose this quarterly is a big one, being the summer/xmas periods, coupled with the results from these new store roll outs. Seems the insto's aren't expecting to much as One Path and Fisher funds have reduced their holdings quite a lot.

Tough for these guys to sell this stock, always poor depth and tough to get out. Good buying times?? At these levels. I think so.

[winner69]

Maybe some punters spooked by HLG downgrade this morning .... mind you they did OK as far as the guys shops went but found it really tough to make a bob in the womens fashion scene where it seem tooth and nail out there

[winner69]

Everyone hanging in there? Down to $1.59 now. Not far off my entry price during the recession!!

.

Dangerous comment to make here mr buns ..... you might trigger a special post from Mr P with your comments notated on it.

Hope you haven't seen your investment go into the mi2 200;s before falling back to the present price

In Lizards NZX competition I picked 5 dogs of the NZX but couldn't find room to put PPL in the five ... as it has turned out it has turned out to be the biggest dog since entering (others were WDT, ALF, FPA, PGW and THL)

[Stranger_Danger]

Forgetting about charts, fundamentals and the like, if you view Fisher Funds as a contrarian indicator, they are currently selling.

(No, I'm not buying. Watching though.)

[buns]

Dangerous comment to make here mr buns ..... you might trigger a special post from Mr P with your comments notated on it.

Hope you haven't seen your investment go into the mi2 200;s before falling back to the present price

In Lizards NZX competition I picked 5 dogs of the NZX but couldn't find room to put PPL in the five ... as it has turned out it has turned out to be the biggest dog since entering (others were WDT, ALF, FPA, PGW and THL)

Ha thanks for looking out winner

This is my one remaining stock (tiny amount held) from my sole NZX investing days, and for some reason I carry on holding and researching the thing as it falls, whilst my asx/rest of my pf prospers.

Time to sell I think..

As i age and become more risk adverse, this is a stock ill come back to (at least research), as I still think the company is the goods.

[ratkin]

Fisher funds have done terribly with this stock. Several times now they have bought high and sold low. There selling is probably the main reason the stock is falling . The price will probably stabalise or even increase once they are out.

[h2so4]

Yes I have noticed this with a few shares. Investors not holding shares through reporting announcements. RBD another similar share.

[winner69]

PPL always takes a bit of a dip leading up to HY results (at least for the last few years). When released, everyone is pleasantly supprised. Recent analyst report says NP will be down about a 1mill this year. He may be right - other predicting the same over the last few years have got it way wrong tho. Quite happy to hold as the divie is about 10% from my entry price. Won't stop me trading a few here and there tho ...

Whoops ... things not going to plan

Last year H1 $14m odd NPAT ... this year only $8m odd

That recent analyst saying only a $1m down might have to redo his numbers .... esp as Prendergast paints a pretty gloomy picture for the rest of the year

Another opportunity coming up belg ..... although a lot of the damage has been done to shareprice already (by those 'guessing' this was happening)

[winner69]

At least they don't expect 2nd half of year not to bad as bad .... last year H2 NAPT was about $11m ... this year about $9m .... so going to make more in 2nd half this year than first year .... they don't usually do that do they?

Never mind only looks like a temporary blip on the radar .... Muir did say one would have expect volatile earnings from this outfit

At $17m and a PE of say 12 (lets be generous) gives a mat cap of $210m .... ie about 130

[buns]

After fighting to sell this thing from the 1.70's, i luckily got out minutes for this news today at 1.58.

Agree this is cheap for someone who wants an income/growth share on the nzx

[Snow Leopard]

Win some, lose some, jetsam, flotsam.

I have a good mind not to buy gift cards from them anymore :p

best wishes
Paper Tiger

[winner69]

Probably won't be seeing the long term chart share price chart in this years annual report ... you know the one they put in last years report that touted the huge returns since floating

Muir always said this was going to be a bumpy ride .... one needs faith in the long term strategy he said and you will be rewarded in due course

[Phaedrus]

Sorry Phaedrus, won't be waiting for the normal TA triggers to indicate that this is a buy.You never do, Belg! Don't apologise though - it's your loss. The upside is that you continue to provide a perfect case study of the folly of ignoring prevailing market sentiment.

Belg, those who do not learn from the past are doomed to repeat it. You didn't learn anything from your PPL mistakes in 2008 and now we see a replay of the same errors.

The same buying of a down-trending stock.
The same adding to a losing position.
The same averaging down.
The same dogged holding of a stock that continues to fall.
The same buying at supposedly "Bargain" prices.
The same perverse disdain for technical signals.

I have covered all these points before in PPL posts such as this. (http://www.sharetrader.co.nz/showthread.php?461-Pumpkin-Patch&p=262885)

Belg, you are fighting the market.

Again.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/PPL33.gif

[Contrarian]

I'm no expert, but I'm starting to like the Warren? criteria of 7% yield & 7 p/e all I can see at the moment is BRM overachieving these benchmarks.
Regards


At least they don't expect 2nd half of year not to bad as bad .... last year H2 NAPT was about $11m ... this year about $9m .... so going to make more in 2nd half this year than first year .... they don't usually do that do they?

Never mind only looks like a temporary blip on the radar .... Muir did say one would have expect volatile earnings from this outfit

At $17m and a PE of say 12 (lets be generous) gives a mat cap of $210m .... ie about 130

[_Michael]

This thread is really interesting.

People are fixated on where the stock has previously traded but missing the point.

The point is on main street.

Pumpkin Patch WAS a great retailer ten, even five years ago.

What is happening to them now has little to do with the economy and everything to do with failing to reinvent themselves, their value proposition and merchandising strategy.

Go to Australia and watch how every retailer is changing and adapting to keep relevant and go to a PPL store where nothing has changed in ten years.

There are many new entrants in their market running circles around them and they are losing market share - sadly after a promising start are showing all the hall marks of an irrelevant brand that could end up history like the "Stubies" you used to wear whose only value today as at retro dress up parties.

Just look to Michael Hill or Mc Donalds for proof that even in the most simple industries constant change and improvement of self is critical in staying relevant and growing shareholder wealth.

PPL were leaders but the management team and board are lazy and apparently still rebelling in former glory so much they missed the world changing around them.

Phaedrus noted in his charts that common investor sentiment is against the stock and will remain true until consumer sentiment starts to go in favor of them.

[h2so4]

1st half reports inventories stand at $92.2m. Cost of goods sold $65.3m. PPL is a low turnover low profit business. I hope the future is brighter.:)

[h2so4]

People rushing to buy kids clothing once the economic cycle turns?

Maybe, maybe not.

[Toulouse - Luzern]

Based on H2so4 info PPL have 8.5 months stock.
More stock than I would have expected.
Stock turn about 1.4 times per year.
Opportunity for marketing and channel mgmt ...

[h2so4]

Stock turn maybe higher and inventory maybe normal but it's the profit margin that's tumbled.

[percy]

I think your statement is correct.It is allways very hard to buy against the trend,and often very costly.My posts were meant as a warning for those posters who may be unawere of the problems retailers are having at present.I would hold off buying until the tide turns.

Would appear the tide is still going out.The above was posted 5/08/10

[winner69]

Operating cashflow negative $20m ... hope they sell them of those huge stockpiles of clothes soon

Had to borrow $37m this half to fund all that working capital (a la stock) and to spend another $12m on growth .... and still another $8m paid out as divies.

One would hope that things improve fast or things could get a bit nasty here

Percy has been warning for some time that retail is not the place to be at the moment .... even the best retailer in NZ who has increased his cash in the bank to over $80m sounded some some pretty grim warnings the other day ... like using tipping point for retailers coming soon as petrol heads to $3.30 plus

[winner69]

Downtrend continues ... Broker's valuations all well north of current SP ... Go figure :)

Sure is belg ... if Liz started another compo PPL would be first the pick

HLG were pretty gloomy this morning so maybe some of that sentiment will rub off on PPL

Mind you HLG said Aust was doing OK and PPL are over there .... would assume the rest of the world is hopeless for them .... and NZ .... no growth here for them for a while

And i believe that many have given up on them because of their past poor governence

Got to be worth something one day

[JayRiggs]

You're right W69. Placed target buys today to catch the turn around.

Hey belg, how are those target buys coming along?
PPL operational update today. US stores closing and all sorts of other bad news.
I'm in pretty deep at an avg price of 1.49. Wonder what to do now...
Hahahaha, good ol pumpkins.

[Anna Naum]

Would have thought most of this was already in the shareprice. Below $1 it is a prime MBO/PE target.

[winner69]

They're going great :) ... The shareprice needs to rise before they fire and with today's 10% fall I get to set them down again :)

So with a bit of luck you may never buy into this dog ....

[Balance]

So with a bit of luck you may never buy into this dog ....

You are losing it, W69!

Whatever happened to your trading instincts?

[winner69]

You are losing it, W69!

Whatever happened to your trading instincts?

I still interested .... money to be made here sometime ...... just Belg is waiting for it rise (from somewhere) before he buys and sort of knowing his target buying levels he might never get the opportunity

[yabster]

yielding over 10% now too.

[percy]

You may enjoy article net result;malls going to the wall in www.theaustralian.com.au/business

[percy]

Anybody here still buying Pumpkin Patch goods for their family.? If so, was the store busy? Were the goods you purchased "on special" or full price? Did you buy from a Pumpkin Patch store, or was it from a department store.?

[buns]

I can't see Pumpkin patch lasting to tell the truth.. They needed to introduce Charlies and me (a low cost seller) before the Cotton on kids stores etc opened.

Pumpkin patch really only has its brand, and in these cases where the company suffers and the brand all of a sudden falls out of the conversation for a while.

Young families have it tough right now, luxury kids clothing is well down the list.

A recovery will come, but the break in between drinks will deter consumers from this old, once known brand.

just my thoughts

[macduffy]

I can't see Pumpkin patch lasting to tell the truth..

I wouldn't agree with that. Certainly, PPL is suffering at present but so is practically every other retailer here and overseas. PPL's overseas expansion has been unluckily timed, in retrospect, but the core NZ and Aust operations remain profitable and we're told that their online business is doing ok.

Much now depends on management proving that they are up to the challenge of shaping the business to meet changed conditions, especially the increasing emphasis on online shopping. Early signs are that management will be up to the task.

I'm not joining belgie in buying just yet but PPL is on my watchlist for what I think will be an eventual recovery.

[Blendy]

Anybody here still buying Pumpkin Patch goods for their family.? If so, was the store busy? Were the goods you purchased "on special" or full price? Did you buy from a Pumpkin Patch store, or was it from a department store.?

You make a really good point. I have young kids and still shop at PP. However, I only bother to buy things when they are on special (which seems to be every time I go in there). The stores are usually busier that the other kid's stores in the malls, so that's a good sign. Also, as far as mall-type kid's clothing stores go, PP still has the image of being the preferred brand, and if I was to give or receive a baby gift, PP items would be far more desirable than the other store's.

Although I must say I'm sure the quality of the fabrics and definitely shoes has gone down over the last couple of years....

There are always going to be new mothers that have to have their children dressed in the 'right' clothes, so I can't see Pumpkin Patch doing any worse than they are now, surely?

[buns]

This is all speculative right. But that is what these fourms are about.

My prediction is bold, and I hope it doesn’t come true because pumpkin patch has been a great NZ company.

I just think there environment has changed - The combination of more low cost clothes producers/retailers, and the new generation using avenues such as trademe, and harsh macro conditions affecting its customer base which aren’t going away.

Sit back for 2 mins, try and be independent or objective and have think where pumpkin patch has a competitive advantage. These guys never really had one for a long time, produced good returns which in turn has attracted new players.

Maybe as a business unit (PPL could become an attractive take over prospect) for another retailer where there distribution channels automatically expand and margins increase. As I said earlier, I think Pumpkin patch could have done better being a BU in its current structure, sitting beside another low cost kids clothing BU.

Stand alone high cost kids clothes retailer in its current structure? Long term - I don’t think so.

[buns]

You make a really good point. I have young kids and still shop at PP. However, I only bother to buy things when they are on special (which seems to be every time I go in there). The stores are usually busier that the other kid's stores in the malls, so that's a good sign. Also, as far as mall-type kid's clothing stores go, PP still has the image of being the preferred brand, and if I was to give or receive a baby gift, PP items would be far more desirable than the other store's.

Although I must say I'm sure the quality of the fabrics and definitely shoes has gone down over the last couple of years....

There are always going to be new mothers that have to have their children dressed in the 'right' clothes, so I can't see Pumpkin Patch doing any worse than they are now, surely?

Also

I see they have just opened a large store on the corner of Willis and Bond st in Wellington.

[macduffy]

Chalkie's article on PPL, first published yeterday.

http://www.stuff.co.nz/business/opinion/5177942/Patch-across-the-ditch-best-for-harvest

[h2so4]

Chalkie's article on PPL, first published yeterday.

http://www.stuff.co.nz/business/opinion/5177942/Patch-across-the-ditch-best-for-harvest

With the economy and consumer spending screwed things surely can get worse for ppl.

[Blendy]

Disagree ... It can't get any worse for PPL ... This is the bottom :)

Love your optimism - I'm with you on this!

[h2so4]

I guess we all look at different things, and I'm not looking at bottoms:). I'm looking for the next period of growth.

At this point in time that just seems more than a few years away.

[moimoi]

Don't look too hard H2...or you'll be needing a day off.. ;-)

[Silverlight]

Agree with belg, chalkie touts closing all the UK stores!

16 of 41(?) are losing money and will close if they can't make money but that means 25+ are making money, why would you close the profitable stores.

Current 7 - 8 cent dividends, the market is pricing zero margin for any growth, when things go well in the UK.

Chalkie also mentions australia revenues dropping yet margins have improved since 6 months ago, go figure? getting worse or getting better?

Also says they need new blood, and mentions the long serving designers and compares this with the companies strategies? That makes no sense, the clothes designs while impacts sales can't change the cyclical environment.

Overall a poor quality article. Never held PPL but at these levels, the yield is attractive and you get growth for free.

[GR8DAY]

.......the divis are historical SILVERLIGHT, they may in fact be history (for a while anyway).....dont count on them continuing into the near and medium future.

[Silverlight]

Current divs sure, but profit for year end 30 June will still be $4m+ (normalised for ones offs you get 12m or 7+cents per share).

PPL's own forecast for year to Jun 12 is $15m+, EPS 10+cents plus. Past divs have been 75% payout so maybe they opt for a reduced div at full year 2011, but I would expect to see PPL paying out 6+ cents div for full year 2012.

There divs carry full imputation, so gross of 9% at $1, but by then though the stock will be back at $1.50 - $2.

[percy]

I word of warning.The stores are quiet.They are trying to unload stock.They are not making the sales.Yet they have large stores in expensive malls.Rent costs high,lease commitements on going,staffing costs high. Very high overhead business.Near impossible to cut costs when things go wrong,as they appear to.Extra debt at this time would appear foolish.

[h2so4]

Exactly right percy.

Just looking back over the half yearly report. Sales down 14%, inventory turnover down 20%, sales and admin expenses up .64% and the $20m reported operating cashflows were wiped out by a huge increase in inventory. It's no wonder they are closing stores.

[JayRiggs]

Price been rising lately, closed up at 1.13 today.
Seems to be a bit of buying interest, any explanation for this?

[Silverlight]

Price been rising lately, closed up at 1.13 today.
Seems to be a bit of buying interest, any explanation for this?

Oversold, great dividend yield, closing unprofitable stores, CEO buying 250k on market, what more do you need? ;)

[ratkin]

Price been rising lately, closed up at 1.13 today.
Seems to be a bit of buying interest, any explanation for this?

Silly people who think because its gone down its cheap. The buisness is not a good one imo
Too much competition , and they will even be competing against themselves when they launch their cheap range

[Anna Naum]

Price been rising lately, closed up at 1.13 today.
Seems to be a bit of buying interest, any explanation for this?

CHA takeover reminded a few that these guys might be on a few Intl operators radars

[lou]

PPL still downtrending but could be a good buy when it breaks out. One to watch.
PPL chart 3596

[lou]

Thr problem with you graph is that it shows price but not volumes. If you want a decent stake then action between 0.95 and current 0.87 has been thin indeed. discl: still accumulating and others are beating me to the trades.

My graph did have volumes at the bottom.
Updated graphs:
3598
3599

[winner69]

Those red lines you drew on the chart suggests that PPL is definitely trending down .... bugger I nearly put PPL in Lizards stock picking compo but didn't think it was as bad a dog as the 5 I did pick

Belg building another pyramid ... so watch out for some real price action

[percy]

Those red lines you drew on the chart suggests that PPL is definitely trending down .... bugger I nearly put PPL in Lizards stock picking compo but didn't think it was as bad a dog as the 5 I did pick

Belg building another pyramid ... so watch out for some real price action

Looks more like he is digging a ditch.May still suit you for next year's comp.!!!

[Nigel]

Results out tomorrow. Up 12% today.
Does someone know something, or is there some wishful thinking?

[lou]

I think it is the big spread and low volume that has contributed to the price jump.

[winner69]

I think it is the big spread and low volume that has contributed to the price jump.

almost right .... but this is what happens when Belg is building his pyramid ... I warned you guys last week about this

[JayRiggs]

Result just out.
https://www.nzx.com/companies/PPL/announcements/214251

Net profit down 50% odd percent, no dividend and CEO Maurice Prendergast has stepped down :(
Not sure what to make of this, I bought some at 1.49 a while back. I haven't been accumulating at these penny prices lately.
What do you guys make of this?

[JayRiggs]

Will mrkt like it? Nope. I doubt it. Will continue accumulating.

Ooooohh, really keen to know what Phaedrus would say to that!

[Blendy]

Not sure what to make of this, I bought some at 1.49 a while back. I haven't been accumulating at these penny prices lately.
What do you guys make of this?

Same here. I topped up a bit at 98c, but still I'm not in a very good place. Might just sit on them for ages and hope they eventually pick up.

[winner69]

Talk about shonky reporting ....

http://www.stuff.co.nz/business/industries/5691276/Pumpkin-Patch-profit-plunges
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10754700

... if you read either of the above PPL made a "annual net profit" of 12.6 mill ... Really?

Announcement reads ...

Pumpkin Patch Limited today reported its underlying profit before tax for the
year ended 31 July 2011 was $12.6m.

No wonder mum and dad investors get screwed! The primary news sources are in cahoots with the thieves and misfits :)

Bryan Gaynor on the matter: http://www.nzherald.co.nz/brian-gaynor/news/article.cfm?a_id=14&objectid=10749064

Did you copy and paste correctly belg

The presentation says Underlying trading profit after tax $12.6m

Take into account all the crap and stuff and total result was a loss of just under $2m

All those crappy bits are non-recurring so why worry about them ... until the next disaster we have more non-recurring crap (or ongoing recurring crap)

Belg - you just get it - looking forward the base is $12.6m for this year (4.5 cents a share I think)

They will heaps when they increase their razor thin NPAT (before non-recurring crap) margin of 3.5%

They will make heaps when they reduce debt -- love the comment that net debt is lower than forecast but jeez it went up by $35m to $61m over the last 12 months (equity down to $32m as well)

And when they reduce that enormous pile of stock that is now worth $85m (sakes were $356m) the cash will start to roll in

When they get the admin costs down from the current $20m they will make even more

And now Prendergast has gone things might get going again - even though worried they have promoted from inside (the man in charge of those low margins and high stock levels taking over)

I still pissed I didn't put PPL into the Lizards NZX stock picking compo .... but on this years years and the prospects ahead a certainty for next year

No wonder you are pyramid building Belg .... this dog is about to turn .... cause it can't get any worse

[winner69]

Sorry Belg - you are right - the short ann does say before tax

Unless another secret set of books I am confused - the only consistent number that is right is they lost just under $2m .... even thougn if you look at the changes in equity there is another $34m reduction in equity not going through the P&L that clarifies why equity has fallen to $30m odd

And that stock figure is about 8 months stock - I thought the rag trade liked keeping stock levels down because of the changes in seasons .... jeez they still ahve last summers stock in stores .... or maybe seasonality doesn't matter in their business

[h2so4]

I'm with you winner "it cant get any worse", this is the bottom. (ha!)

Average stock turns down by 15%.

Profit margins plunge like an Acopulco cliff diver.

[winner69]

Shoeshine in NBR got stuck into PPL this morning .... hoping that Rod and Jane really need to do something to stop this disaster continuing .... and noting that mark to market things throught he balance sheet knocked the best part of $40m out of shareholder equity which as I had pointed out before has fallen to $30m odd

More to come methinks ... Prendergast being replaced by the man who did the day to things wouldn't inspire punters either

Keep building that pyramid Belg .... that inevitable takeover/recovery will happen one day ... but at what price we ask

[percy]

Still a big lack of customers in their shops.

[JayRiggs]

I've been wanting to accumulate some PPL for a while now, but have held off because it's been downtrending for some time and it's looking quite risky.
I'm quite new to technical analysis. What technical things do we look for before it's safe (or safer) to buy?
I see that the OBV has been sliding downwards for the past year.
Fundamentally this company is in a bit of a mess and I guess we won't get a clearer picture of things until the AGM, which I plan on going to.

Thanks to all!

[percy]

I've been wanting to accumulate some PPL for a while now, but have held off because it's been downtrending for some time and it's looking quite risky.
I'm quite new to technical analysis. What technical things do we look for before it's safe (or safer) to buy?
I see that the OBV has been sliding downwards for the past year.
Fundamentally this company is in a bit of a mess and I guess we won't get a clearer picture of things until the AGM, which I plan on going to.

Thanks to all!

JayRiggs. Try and visit a store.Used to be colourful,bright and busy.Go today,stores look flat,staff bored and no customers.When you see the shops looking exciting,full of customers waiting at cash desk,staff busy,then look to buy the shares.At present they just seem to be trying to clear over stocks.Just another rag trade retailer fighting to stay afloat.

[JayRiggs]

JayRiggs. Try and visit a store.Used to be colourful,bright and busy.Go today,stores look flat,staff bored and no customers.When you see the shops looking exciting,full of customers waiting at cash desk,staff busy,then look to buy the shares.At present they just seem to be trying to clear over stocks.Just another rag trade retailer fighting to stay afloat.

Thanks for your advice percy. Makes alot of sense. I didn't realise Pumpkin Patches were busier in it's heyday as you describe.
I walk by the Pumpkin Patch in Ponsonby quite often. Most of the time it's pretty empty and there have been "Sale" signs on the window ever since it opened earlier this yr. It's very rare to see someone walking out of the store with stuff they've bought. The Ponsonby one is probably a bad example, because that area doesn't have much foot traffic. Westfield Glenfield and Albany branches are pretty empty too. Westfield St Lukes had a few more people. The only busy Pumpkin Patch I've seen is the one in Dressmart. I overheard a couple in there saying "they opened a new Pumpkin Patch in Ponsonby!", "ooooh"... at least someone is excited... a tiny glimmer of hope.

PPL does seem like a value trap at the moment. Deteriorating fundamentals, deteriorating share price.
I'm quite keen to see what their plans are to turn this around. Surely they must have something. A brand new revolutionary line of kids clothes perhaps?

[percy]

JayRiggs,In their heyday you could walk around an empty Mall until you came to the Pumkin Patch store,which was bright,full of activity,happy customers buying nice children's clothing.Busy,busy store. Not today as you have found out for yourself.
Hold onto you money as turnarounds either do not work,or take a lot longer to work than anyone thought they would.
belgarion.Still quiet between 10am and 2pm weekdays.I can only speak for Christchurch Mall shops.

[percy]

Chalkie's article "Pumpkin Patch lands itself in forex pickle" in this mornings The Press makes for sober reading.

[traderdude]

Hey percy any link to the article? cheers

[Balance]

Suspect PPL may not be with us much longer ......

[percy]

Hey percy any link to the article? cheers
try www.stuff.co.nz/business
then click onto opinion and headline pumpkin patch in foreighn exchange pickle should appear.

[traderdude]

Legends, cheers Guys

[Xerof]

Not another company that badly needs assistance by way of an in-house Treasurer. These companies skimp on costs, and pay through the P/L big time because they assign this sort of policy setting and decision making to unskilled (in the ways of markets) CFO's and directors who wouldn't have a clue.

The issue here is not to fight with the FX rate, but to make sure their FX policy is aligned with WHAT THEIR COMPETITION is doing. It's like match racing - if you tack away looking for a good breeze, you could end up in a hole, and the competiton sails away from you.

As with the offer I made to NZOG a while ago, for a few hungie a year I am available (in the new year) :p:p

But as Balance says, perhaps it is too late

[h2so4]

Chalkie's view of PPL's hedging losses is opposite to management.

In the annual result announcement they said "At balance date the after tax mark to market losses on all foreign exchange derivatives totalled $36.0m. However since balance date movements in exchange rates have led to a $17.7m improvement in the after tax value of those derivatives and a corresponding increase in total shareholders funds."

Reading that you would think that things were now working in favour of PPl, however when it's reflected in the share price who knows.

[winner69]

Chalkie's view of PPL's hedging losses is opposite to management.

In the annual result announcement they said "At balance date the after tax mark to market losses on all foreign exchange derivatives totalled $36.0m. However since balance date movements in exchange rates have led to a $17.7m improvement in the after tax value of those derivatives and a corresponding increase in total shareholders funds."

Reading that you would think that things were now working in favour of PPl, however when it's reflected in the share price who knows.

Chalkie acknowledged that they were this $18m less worse off. All these gains/losses go through the balance sheet and you don't see the impact on the P&L anymore - as such probably no one bothers to worry about it as it doesn't affect eps or things like that - and the reason why shareholder equity came close to being wiped out

As Xweof points out the profitability impact is felt in their competitiveness - PPL are essentially buying stuff from at USD0.66 rate whereas their competitors are much better off. Chalkie pointed out The Warehouse are buying at 74-77 cents

Big problem for PPL is that they have the same problem through 2012 and 2013

Hell if balance is saying the end is nigh and if Chalkie says if they don't get some new blood to stop the rot they 'will be struggling to stay afloat' the inevitable looks like it is going to happen

[percy]

[


Big problem is a very real problem,and with the "brand" loosing its gloss,the challenges grow.

[h2so4]

I get it that they booked massive non cash losses due to hedging contract losses but it seems they have other hedging contracts that gained in value after balance date which created some sort of turn around?

My view of PPL is still unchanged - crap.

[winner69]

[


Big problem is a very real problem,and with the "brand" loosing its gloss,the challenges grow.


PPL was a great company that was exciting and vibrant and understood what their customers wanted and delivered the offer with enthusism etc etc ... but then they became a corporate and was run by MBA and professional who knew all about marketing and all about successful supply chains etc etc ... and got shareholders who demanded growth, increasing profits, greater efficiecies etc etc.

PPL might become great again --- if it gets rid of all those evil shareholders and goes private and does all those exciting things they used to do without that corporate collar around thir neck

You are right percy -- the brand is slowly being destroyed ... it needs to go back to its roots eh

[Balance]

PPL was a great company that was exciting and vibrant and understood what their customers wanted and delivered the offer with enthusism etc etc ... but then they became a corporate and was run by MBA and professional who knew all about marketing and all about successful supply chains etc etc ... and got shareholders who demanded growth, increasing profits, greater efficiecies etc etc.

PPL might become great again --- if it gets rid of all those evil shareholders and goes private and does all those exciting things they used to do without that corporate collar around thir neck

You are right percy -- the brand is slowly being destroyed ... it needs to go back to its roots eh

Bang on, W69.

Be very surprised if someone is not casting a close eye on this company.