Balance have you forgotton that Foodstuffs have Blocking stake & they are not going to let Woolworths do anything. So realistically with two blocking stakes The Warehouse is not going anywhere that would upset either Foodstuffs or Woolworths
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Balance have you forgotton that Foodstuffs have Blocking stake & they are not going to let Woolworths do anything. So realistically with two blocking stakes The Warehouse is not going anywhere that would upset either Foodstuffs or Woolworths
No need to rattle cages - Woolies already said they are interested if he wants to sell.
http://www.nzadviser.co.nz/newslette...warehouse.html
So far, they have played the better game - Tindall will not get the $7.15 Woolies was offering a few years ago but maybe, $4.50?
The question for Tindall is - what will WHS be worth in 2 years' time if Ian Morrice still runs the WHS into the ground like he has been doing?
Look at the Warehouse now - it's a confused entity with some seriously slow moving lines of stock - power tools which nobody buys (cheaper at Bunnings), appliances (who buys Transonic when equivalent branded appliances are similar in price) etc. Then, there's the awful display and totally disinterested staff. Yeck!
Balance would Woolworths be happy to hold 90% as no way will Foodstuffs let them have 100% That was why they both bought their holdings to stop the Warehouse getting any bigger in food & stop either Foodstuffs or Woolworths geting 100% of Warehouse. Because with 100% of Warehouse some stores could easily convert to supermarkets without much hassle.
Warehouse sales havedrifted from $1.88 billion in 2006 to $1.68 billion in 2010 and look to continue their downward trend this year .... and the shareprice has followed eh
All this in spite of stories about growth and how they are going to improve margins etc .... unfortunately Norrice et al don't seem to have grasped the fact that the Warehouse model is broken and that competitors like Bunnings and Mitre 10 now rule the big box segment and that competitors like Briscoes do a better job with homewares and that with all the appliance retailers cutting their throats Warehouse doesn't have a credible offer in this segement and that even the likes of Postie Plus and T&T do a better job with cheap clothes
I went into a $2 shop (or whatever they are called) and they even had better products than a Warehouse.
In saying all that just becuase they have the footprint Warehouse will still heaps and make about $70-$80m this year ... and most of this will go back to shareholders with a 24 cent odd divie so a pretty good return for shareholders
Maybe a bit more for shareholders one day if Foodstuffs / Woolworths work out what to do with their stakes but if I was them I wouldn't wait too long
WHS not a dog yet
Confirmation that things are under way to get rid of Morrice .... as always hear it first on Sharetrader
http://www.stuff.co.nz/business/indu...house-shake-up
Off course the board has not discussed recent performance .... yeah right
Morrice gone by Xmas .... retirement by the sounds of it sounds better than being give the boot
http://www.nzherald.co.nz/business/n...ectid=10700521
Good piece by Fran.
Interesting article, haven't owned any WHS shares for quite a few years having come to the conclusion growth for the company
was going to be difficult to find. That there was a greater prospect of a sales decline than increase.
I have a suspicion more of the problem lies with Tindals controlling shares than the CEO. I have no doubt Tyndal is a hardworking, trustworthy
gentleman, but suspect his business plan is yesterdays ideas ,that he can't see beyond them. He can either privatise the companany,
carry on with the same plan and continue to stagnate, or radically change board and management, give them all the room they need
to make changes. Won't be cheap or quick though I think, or sell out which would surprise me.
I wonder what plans Woolworths & Foodsfuffs have? Must be a worry for them.
WHS is a great investment right now IMHO. Put it this way - the SP really can't get any lower... you truly are getting a bargain. I have absolute confidence that you will earn a steady 10% return on this stock holding for 5 years inc divis and cap gain when bought out.
Sure it may take a year or 2 or 5 to turn this company around or have it bought out - but until then you can collect the dividends and relax. Leave the worrying to Steven, WOW, and Foodies, and WHS management and Board. It'll all sort it self out eventaully and i will take my cheque and say thanks.
Impatient investors need not apply!
That's what people said about Telecom at $4.50 - cannot get any lower.
Warehouse cannot stand still - it has to do something more radical than simply rejigging store formats and product lines.
One gets the feeling that Tindall and the Board are totally lost for ideas and are presiding over the steady and soon, accelerating decline of the Warehouse.
I realise that you can draw comparisons with TEL and TLS but the difference is the Warehouse doesn't need to make vast capital commitments in the face of government regulation. They are really quite different.
WHS is still a very profitable company and will continue to be so. I know some of us here have complaints about their lack of growth (-ve growth) but this is priced into the SP and is quite pessamistic. I think predicting an accellerated decline is probabally a bit outlandish.
From today's NZX market report:
"Warehouse Group, the country's biggest listed retailer, rose 1.8 per cent to $3.49 after media report quoted Grant O'Brien, chief executive designate of Australian retail group Woolworths, as saying he was still interested in growing its stake in company but has no immediate plans.
Woolworths currently owns a 4.4 per cent stake in WHS through its Foodstuff subsidiary."
NZX surely has this wrong. Foodstuffs is the opposition! And don't both Woolworths and Foodstuffs each have stakes of approx 10% in WHS?
Possibly, but it's a poor choice of wording in that case, particularly the use of a capital "F"; the fact that "Foodstuffs" is the big opposition; and the 4.4% stake?
Well the long slow grinding down of the WHS shareprice continues .... close at 310 today ... only 4 cents of the previous low this century of 306 ..... jeez another 11 cents and the shareprice will have a 2 in front of it
Forecast earnings of $70m so still on a PE of nearly 14. They say 90% of the earnings to be paid out in dividies so about 6% plus credits which not too bad.
Maybe the market still spooked by the new guy wanting to spend hundreds of millions on doing the stores up ... jeez this outfit is capital intensive isn't it .... where's that cash come from ... some suggestion of more debt at the ASM.
Shareprice probably still has some takeover premium in it ---- while a billion (would also have to tke on the debt as well) is petty cash for Woolworths it probably isn't much in Tindalls eyes and there lies the problem
So it all comes down to how much is one prepared to pay for $70m NPAT .... most wouldn't pay a billion for it at the mo .... at that is what the chart is saying
For a retailer who has lost market share and faces poor growth prospects I would think a PE of about 6 or 7 would be about right.
god your mad percy - i disagree with you on alot all over this board.
10-15 very resonable for a company of this size in NZ with its high yield, strategic position and defensive earnings.
Look around - what are AIA, FPH, SKC, TPW, CEN etc trading on - i dont even have to look but I am betting the average of these would be 20+
WHS on a PE of 7 - what planet are you from?
Would pay to compare with other retailers.The top retailers are BGR on PE of 11.8 .... HLG on PE of 11.8 .....Kmd PE on 12.6.
MHI on PE of 10.2 .....SCY PE of 11.7.
Other than warehouse stationary I see a group which has lost direction and has a poor outlook.
Disagreeing with me helps make sharetrader more interesting.Keep it up.!!!!
Modandum - WHS was below 300 but closed the year out at 300 .... you will be pleased to see on the charts that 300 has been pretty solid suppport level in the past ... like in 2005 when the computer broke down and OZ went all wrong ...and 2006 when the GFC pushed all shares down .... 300 was as far down as it went
Myabe 300 a low as well ..... maybe not in light of the recent comments on this thread .... WHS has lost its may and seems directionless in what it wants to offer ..... and still wants to spend hundreds of millions in doing its stores up .... expensive business this big box retailing eh
Do you think the divie might be cut this year .... jeez that would sink the share price eh
Good post, Winner. I just got around to looking at WHS again - discovered I hadn't actually looked at it seriously since 2006... and still didn't find much to excite. You seem to have covered the main points in your post. Div a definite to fall a little (20cps ?). However, there is a good platform here for a turnaround. Part of me would like to see them seriously attack the div to upgrade the stores rather than take on more debt - but if they can get the transformation right, more debt is probably not a killer and some consideration for shareholders income needs doesn't go amiss.
Last few visits to the local store have been okay - no stand-out irritations anyway, so perhaps things are improving there. And, as percy says, the Warehouse Stationery seems better, and the current MD was previously overseeing that, so not too green.
Still not a huge fan of retail and, short term, need to at least get the foreshadowed lower first half result out the way to see where this ends up... but may be looking for a bottom somewhere in the next 3-9 months? I might like it at $2.40....
Btw, is it just me or are vouchers for Christmas presents gaining popularity in these recessionist times? Warehouse always a popular choice in this regard due to the wide range of goods and omnipresence in most townships. Hard not to spend a bit more in there while spending those vouchers too.
Oh dear - WHS not going to meet expectations again .... the $70m guidance is now $62m (they did gave a range but we will give more credence to the lower number eh)
Seems a trend developing here .... (adjusted) profit 2010 $83m / 2011 $76m and now $62m in 2012 .... seems like it is falling year after year
And little reaction from the market after a 11% downgrade ..... and still she trades at 15 PE .... surely far too high .... and too much for a takeover premium
Based on othe retailer valuation WHS should be $2 .... not around the $3 mark
Never mind this slow giant which has lost its way will be reawakened and all will be OK again
At least the press have picked up on that they will still achieve 'reported' NPAT of $80m ... silly me
But they rave on about this (adjusted) NPAT which seems the normal operating profit ..... does anybody know what the other $18m between 'adjusted' NAPT and 'reported' NAPT of $80m
Got me stuffed ..... who do I believe .... or do they jsut throw all these numbers around to confuse the punters .... after all most of us are stupid anyway
I thought the $80m was supposed to include surpluses on sale of non-strategic property. Don't recall seeing any announcements about actual sales, but guess they must have sold some in the first half to be including it.
I'm sure you're right, Lizard and if so this is one instance where I think there's value in reporting the two numbers - one being the actual NPAT which includes the non-trading profits/losses and the other the "underlying" profit from trading. And in this case, unfortunately, the latter is the lesser of the two!
I don't know what to make of WHS. On the one hand I'd have thought that their bargain basement merchandise would be insulated to some degree from economic problems as consumers trade down. And less susceptible to on-line purchasing impacts. On the other hand, perhaps NZ consumers have had their fill of cheaper goods and are being more discerning in their choices. Buying less but better quality?
Who knows!
Problem is most the warehouse clothes buyers now buy their tat from ezi buy
CDs etc now being downloaded for free
Electronics have reputation for poor quality
Household goods are now at least as cheap at briscoes
and the real cheap tat can be had at the two dollar shop
I have a view that for a number of years WHS stole a march on other retailers.If you wanted something cheap you went to The Warehouse.Over time the other retailers have worked to get their customers back.Farmers,Briscoes,Halensteins,Noel Leeming,Smiths City,Whitcoulls and Paper Plus now offer excellent products,and have been a lot better buyers,passing on savings to their customers.
WHS have found the "cheap rubbish" is no longer profitable,and left that to $2 shops,so they are now competing in a very crowded market place.That is without Trade Me or internet sales,which draws "the bargain" shoppers.
Yes, I was thinking the same. What is more, if I go to Paper Plus and buy the kids stationery, not only is it as cheap as warehouse stationery, but I also get to chat with my friendly local staff who recognise me and rack up points on my new Paper Plus Card, plus Fly Buys.
At Briscoes, I can buy the same cheap towels as at The Warehouse, but I also get to see what paying a bit more will get me - that way, I can make a fairer choice between quality and price. The surrounds will feel nicer. There probably won't be a 10 minute queue while they find the price. Nor will I get charged if I want a bag because I bought more than I can juggle.
As the price gap narrows, it's much more about the shopping experience.
The Warehouse needs to decide on it's strength again, as it's not consistently cheap enough to be sure of getting a bargain any more.
As the price gap narrows, it's much more about the shopping experience.
The Warehouse needs to decide on it's strength again, as it's not consistently cheap enough to be sure of getting a bargain any more.[/QUOTE]
I think we are very much in agreement Lizard.You can't be everything to everybody.Play to your strenghths,and give service.I deal with Bunnings and note they always have experienced people on hand.Even have a person to direct you when you enter the store.Compare that with The Warehouse,no floor staff and poor store layout.Just try finding a tube of superfix glue.I came unstuck.!!!!
Pleased to note you enjoy shopping at Paper Plus.My wife comes home with nice things from Briscoes too.
Well, that certainly sparked a response or two!Quote:
Who knows!
I think you're all on the money there. The Warehouse has lost its way in today's marketplace. Will it regain its niche or has it had its day, both as a merchandiser and as an investment?
:confused:
I decided 2 years ago not to step in a Warehouse store again and I am still not missing anything! Warehouse is a junkyard.
I am thinking it's like a bottle of lemonade.Once you have left the top off overnight it is impossible to get the"fizz" back in.
Retail markets change.When WHS first started NZ was starved of selection.Prices were high.WHS rode that tide,NZ public were hungry for "bargains",and WHS did well.Today ,the market is flooded.Go to any mall before Xmas,and they were like "Asian flee"markets.
Warehouse stationery focused on selection,value,service and have done well. As far as WHS as an investment,the SP will depend on retail sales.Poor sales = poor investment.Great sales = great investment.If you like shopping there buy their shares.If you don't ,don't .!!!!
So true! Bunnings staff are super friendly, super helpful and seem proud to work at Bunnings.
Warehouse staff are unfriendly, often rude, disinterested and obviously would prefer to be somewhere else. You can avoid this problem by avoiding them right up until the checkout. Sucks to queue for ages only to be greeted (or not) by someone who doesn't have a clue how to provide customer service.
I used to own Warehouse shares but sold out a few years ago when I thought they had lost their way. Until they sort themselves out, assuming they aren't broken, I won't go near them.
With the now new low as of the moment of $2.82 you would think that Tindall would have to seriously look at the company's prospects and the path outlined under the current capex for expansion etc. It seems to me this company now has inherent issues which the current regime are unlikely to resolve without a change in direction and some really serious $$ which would be beyond WHS. Does this current S/P get WOW's attention? I would be interested to hear views from other posters.
Ever since WOW bought that 10% holding in WHS I thought that they would eventually make an offer as the basis to replicate their BigW chain in NZ. It was also, of course, a counter to Foodstuffs who held a similar number of shares in what became a Mexican standoff where neither was prepared to sell out in case the other made a move!
Must say though that I've changed my mind as the retail scene has evolved; WOW planning to become big-time in hardware in Aust; growth of internet shopping; WOW's plans to quit Dick Smiths, etc. I reckon now that WOW would be happy to cut their losses and quit the WHS shareholding if they could get a half-decent offer for the shares.
Macduffy I think you are right.
After posting on this thread I thought about who would be a natural owner of WHS.I thought about Foodstuffs,but I keep coming back to WOW.After reading your post ,it is hard to see a takeover at a premium.
Just to be a bit contrary in the mix, the new stores look really really good. They feel bright, and the new environment has a positive impact on staff.
The online store is very easy to use and well designed, if I want to compare items at bunnings, their website doesn't tell me prices, and their beat by 15% only works if items are the same brand/ model.
Silverlight.
Nice to hear some one positive.
I think retail is all about presentation and a bright store not only has a positive affect on staff,but customers enjoy it,and happy customers will spend.Activity breeds activity.
The day of just looking for a bargain has gone.Today people expect good products,good prices,good service in a pleasant environment.
If you like the new stores I am sure others will too.I look forward to visiting one,as I thought they were well past their "use by " date.!!
I will also try out their web site.
Yes Farmers did and are doing a great job.Got rid on non-core areas and focused on what they are good at.Reinvested profits into the business.
I was in Postie Plus Auckland shopping centre store yesterday,and could not help thinking how hopeless they are.Shop was flat,dull,and boring.As I posted earlier bright,interesting stores are what customers want.If WHS can follow Farmers, then they will have a bright future.
They are really a big force in NZ retail,even with low sales growth they still move a mountain of product.If they don't they will follow Postie.
The basic problem I see with WHS is the product range. From their earlier days they were true discounters offering a huge range and today they still want to be all things for all people. Just consider the thousands of product lines they carry, which is the old philosphy. They are just not specialist enough.
Biggest problem as I see it they have an enormous number of shelves to fill up ..... far too many to be a specialist in anything ..... and following Farmers would be a dangerous game to play
Only real strategic asset they have is that footprint .... but the real value of that is being diluted as Mega and Bunnings keep buiding their big boxes .... just down the road in many cases
In saying all that they don't do that bad ..... makes heaps of money ..... more than their cost of capital .... but for the market not making even more heaps of money is precieved to be bad
They need to find a new blockbuster category to own, through which to people back to the stores. Music sales used to do this but not any more.
They still do seasonal merchandise well, easter, fireworlds, xmas etc.
Snapiti Stop dreaming they will both say NO at board level. That is IMHO why they both bought 10% stakes
WHS once was a 1 stop shop for most things ..... even if it was for 'cheaper' brands .... a true dept store
My local would be the Warehouse out by Wgtn airport .... it is part of a whole complex
Want TVs and other stuff .... Dick Smiths next door and a Noel Lemings
Want clothing .... KMD might have a 70% sale
Want shoes ... heck No 1 Shoe Warehouse is next door .... yippee
Want sports gear ..... heck Rebel Sports is there as well
Want lights .... Lignting Direct always have good deals
Want homewares .... good choice at Briscoes as well as Bed Bath and Beyond
Odds and ends for the car .... hey there is Super Cheap Auto in the complex as well
Tools and garden stuff ....... Mitre 10 (not a Mega) next door to the car park and Bunnings 100 yards down the road
So what competitive advantage does WHS have at this complex?
Just my observation
and i see the sahre price down to 270 this morning ..... eek
A lot of negative comments here which are shortsighted in my view. Sales for group are up 4.2%. NPAT is online for 80 million. They return good dividends. I dont believe competition is going to hurt them unduly...business's are not going to have an easy time matching WHS buying experience and proven ability to buy the right goods at the best price. Its the margin between buying and selling which in the end run will make a business succeed. Rents, payroll, overheads are roughly the same for everyone but the company that buys best has a big advantage. From what I have read over the years WHS has always done this very well. Buy it now if you are a holder..and even if you are a trader could be some good money to be made. Low share prices to me in this case are an opportunity not a call to abandon ship.
Disclaimer...obviously I hold these shares.
So why are their profits falling? How does they compare with Briscoes? Don't they have good buyers too? And improving sales? And improving profits? And no debt and big bucks in the bank? Lower dividend though, although that may change considering their surge in profit?
So I am interested to know why I should buy WHS over BGR? Perhaps why buy either? I am interested in your thoughts. Cheers :)
Mate the only negativity about WHS is that most see little growth potential in WHS .... they have reached a point of saturation in the NZ market and at best probably can only consolidate their market position while doing their best to maintain margins
Financially WHS performs bloody well .... but the punters say not well enough .... at least those punters with a growth mindset .... hence the shareprice drifting down
For all their (perceived) woes last year WHS returned a 20% on invested capital .... bloody fantastic and a return that most companies would envy .... even this years guidance (is actually $62m-$66m and not the $80m you mention) will result in a ROIC in excess of 15% - a company making excessive returns on capital .... truly wealth creating
So how do you work out what WHS is really worth? Even at 10% cost of capital and building no growth MVA is about $400m .... add WHS equity of just under $300 and market cap should be about $700 on this basis (8% cost of capital gives $770m). Market cap today $843 so reasonable if people still believe some growth is coming or a takeover premium.
Another way is look at dividend yield - say a 20 cent divie .... thats 7.4% or over 10% gross .... not too bad
So maybe current price is about as low as it will go .... or give it a few days for the growth punters to finally get out and it might be a little lower
The current discussion is similar to all the pages and pages on sahretrader about how a dog RBD is ..... RBD sales have always been around the $300m mark (slowly creeping up now) and except for a couple of years a while ago have always made decent returns on the capital invested ..... these days that return is over 50%. The point making is that RBD has for years seen as a dog ..... except for astute investors who recognise that high returns on capital will always lead to high dividends (even with pretty large capex requirements). Growth per see is not always necessary to make above average returns
So maybe look at WHS as a bond and if you can get 10% plus a year thats pretty good ..... if you want growth maybe WHS is not the place to be but in saying that the face value of the 'bond' will at least keep up with inflation
BGR returns a dividend of approx 5.9% on your money...WHS at current price is returning 9.6%. If you are buying for mid to long term investment its obvious which one is looking good. I dont buy for growth or trade for profits in the share price since my primary focus is only for dividend yield...probably different than most people on this forum. "Share TRADER" is after all what its called. I see WHS as one of a dozen of my investments that will hopefully always keep me ahead of the battle against inflation and dropping term deposit rates.
What chance slightly better news in the (H1) result tomorrow from WHS ,up 8 cents today in a pretty flat market ?
Could be, stoploss.
But it's only a recent upturn on pretty average volume. I'm inclined to think that it's more a case of speculative buying on hope, rather than expectation.
I'd be surprised if this result marked the turning point. Looks a little on the low side, terrible cashflow and big debt position (maybe larger than expected). Div about where I'd have picked, but maybe cut further than some analysts hoped.
I think it will still get down below my earlier $2.40 target and I have yet to review whether I'm sticking with that one after this result. At least their presentation recognises some of the key things we've talked about, e.g. mentioning that improving store experience is the critical enabler.
Nice to see Te Awamutu getting a star mention .... good old Te Awamutu leading the way the WHS evolves into a more vibrant business .... good stuff
Today's SP rise looks a little overdone to me. The result wasn't that good, as Lizard has suggested.
I put the reaction down to a combination of :
- A little better than expected.
- Market looking for reasons to rise.
- General firmness today.
I'd be surprised if the gains are held on Monday.
Disc: I hold a few, courtesy of speculation that WOW or Foodstuffs would make a bid.
:(
Don't bother, Liz.
First impressions are usually pretty good!
:)
I want to buy a few more retail shares. Can anybody suggest some reasons why I should buy WHS over BGR (which I already hold a small number of)?
Cheers
Eme
I have been buying WHS down here as I see it as a free hit. It was not too long ago Woolworths wanted to buy them and were happy to pay somewhere around $7.00 per share.Our friendly local supermarket chain took a 10 % stake to block them between 5 & 5.50 from memory.The competition commission whatever it's called denied the bid in the end anyway.In the meantime they make between 60 & 70 mio a year.Imagine the cost with resource consent etc to replicate their buildings & infrastructure in todays market.... So I have been buying with the hope Sir Stephen Tindall decides to tidy it up or Woolworths or someone like Aldi comes and has a look.Just because a bid was denied in the past doesn't mean it will always be so, just look at AMI and IAG ......
That's right, it's a different world now. But I 'm not sure that either Woolworths or Foodstuffs would be interested in WHS these days. Their 10% stakes were originally built to block each other in the days when WHS looked like it was serious about the food business, from which it has since retreated. I thought for a long time that WOW would want to expand their Big W business via WHS but this now looks increasingly unlikely given the lacklustre performance of Big W and WOW's recent heavy investment in hardware in Aust.
I'd therefore discount the chances of a takeover in assessing the investment merits of WHS but would be very happy to be proved wrong in this!
Perception is everything in the retail game which is NZ.
Looks like the Warehouse has lost the perception that it is a place to get bargains and the best deals.
http://www.nzherald.co.nz/business/n...ectid=10791832
In every category, there is a competitor which easily beat the Warehouse - Bunnings, Briscoes, JB Hifi etc.
Meanwhile, the company continues to pay high dividends - now only maintained using debt!
Lots of red lights flashing.
[QUOTE=Balance;370225]Perception is everything in the retail game which is NZ.
Looks like the Warehouse has lost the perception that it is a place to get bargains and the best deals.
http://www.nzherald.co.nz/business/n...ectid=10791832QUOTE]
Often wonder about the value of on line surveys of a few hundred or so people. How do you compare the brands like "maggi " or " homebrand" for example against a relatively big business like " The Warehouse".
As you say perception is everything but doubt if it will have any long term effect.
Was thinking of buying a few but will wait for the next drop in price.
Westerly
Thanks for the comments. Dividends out of debt to stop their share price falling further/faster doesn't strike me as a great long term plan. Briscoe's with their 90 million in the bank seems better in this regard.
As posted elsewhere, WHS is to delist its shares from the ASX. Shareholders on the Aust register will be transferred to the NZ register or may opt to have their shares sold through a share sale scheme. Only 2% of WHS issued capital is held on the Aust register so any selling pressure resulting is likely to be minimal.
Two page article in the Dompost today outlining the last 30 years of WHS. yes it is there birthday
One telling comment was an admission by the company that five years ago they changed their focus to shareholfers and forgot about the customers
Always interesting question as to who should be at the centre of the universe in the stakeholders model ..... And WHS found out the hard way
Big problem when (greedy?) shareholders demand more and more. Wrong decesions that impact the long term are made. Let's put it down to the fact that insto's think they know best and do act in the best long term interest of the punters who give them their hard earned cash to 'invest.
Was at AGM and the point made by a few shareholders is that there's no new blood on the board or new ideas from the management. It was all too much of "back to the future".
Latest results show the company increasing sales at expense of margins - any retailer can that!
Meanwhile, some of its competitors/other retailers are capturing increased market shares and expanding margins.
Totally agree but how often is that the case. Institutional shareholders have too much say ..... To the long term detriment of many companies
Interesting the Myers head honcho decided to forgo growth the insto's wanted and said he would spend more on service/on line.stuff ... Good on him even if a bit late but in Myers case the greedy shareholders of old have screwed aust big time
#Totally agree but how often is that the case. Institutional shareholders have too much say ..... To the long term detriment of many companies#
But Sir Stephan Tindall own nearly 50% and WOW and Foodstuffs own 20 %. The institutional shareholders hold only a minority of shares and I think WHS lost its sense of direction.
Sparky thats not fair
WHS no lemon .... jeez it still makes $60m-$70m a year after tax on shareholder funds of $320m .... thats pretty good I reckon
Problem being people think the lemon should produce more juice
Master 14 and Miss 17 went to the WH with vouchers they were given yesterday. Came home empty handed. "Clothes not appealing and expensive, DVDS and music handed round at school for free and books better off bought on Book Depository or borrowed from the library."
Thanks Percy, Mrs Whirly is indeed proud. So I then asked if not the WhareWurri what to buy shares in. Internet Service Providers was the quick answer. Both kids have cellphones and netbooks and Master 14's penchant for video making and uploading and occasional forays into online gaming see our broadband quota decimated in short time.
may pay to get them to look at Estar thread,or get them to go to www.estaronline.com web page.
The chart certainly shows the folly of the mythical buy and hold at any cost investor. However, I am a buy and holds investor and did very well out of the Warehouse. Basically I bought in a $4 and sold at $5 (plus accumulated dividends) a couple of years down the track (must have been mid 2006), into the first of the stake building takeover offers. I had no plans to sell before a takeover offer came along. As it happened I would have done better holding out for the later Woolworths offer which IIRC was higher. However, that's life and I really can't complain as I still made a good profit on the deal.
I don't think it is a fair assessment of buy and hold investors to say that they never sell at any cost. Obviously if a good takeover offer comes along then you accept it. That doesn't disqualify you from being a buy and hold investor!
SNOOPY
I usually sell into takeover offers that are recommended by the independent advisers.
Otherwise my grand NZX plan is to have 10 shares (at the moment I have 9) with a roughly equal amount of capital in each. However, my limit on the total amount of capital tied up in each share is quite loose. I will tolerate errors of 50%! I am a little nervous of some of my low liquidity holdings so have been managing those a bit more actively recently. But generally I trade an infrequently as practicable.
I don't buy shares unless I can be fairly sure I know where that company will be in ten years time. I find picking where that same company might be in two years time is much harder!
SNOOPY
P.S. I can only think of one case where I have a company on my sell list because it has changed so much since I invested in it.
Pretty impossible to answer, although the registry would know, however there were just over 5,000 shareholders in the IPO and today there are over 11,000, so you could conclude that many who had bought in the IPO still hold today.
Many bought as well, looking at the figures just has many bought and sold in the 3 years after the glitch as the price moved from $1 up to $4
Year Volume
1996 84,382,022
1997 78,140,288
1998 77,279,538
1999 77,073,838
And equally just as many people sold, however to quantify with figures, volumes were only 30% greater than in the 90's, except 2006, which is the outlier.
Year Volume
2003 112,031,464
2004 110,333,844
2005 116,917,686
2006 165,292,951
2007 100,008,664
Point being that anyone who held from IPO has done okay if measured from IPO, but not as well as if they sold out when stock rose above $5.00.
Point also that at this price, most who bought above $2.50 and are still holding are nursing losses now.
Good on those who saw the light and got out.
WHS is toast - no strategy and a piece-meal revamp of stores which has competitors laughing and rolling in the aisles.
I am going to make a prediction. In ten years time the Warehouse will be one of the three largest general retailers in NZ (they are number one at the moment so I think it is a fairly safe bet). Return on shareholder equity is strong and will remain so. All other observations on WHS are basically just noise. I have no idea how WHS will do over the next couple of years. As a long term investor I am not interested.
This is all the long term investor needs to know to be sure WHS will be a good investment at some point going forwards. At what point this will be I don't yet know. I do know to repeat the WHS retail footprint throughout NZ would be impossibly costly.
WHS may be slightly stale bread, but it is not toast. I don't know who the MD will be in 10 years time. But rest assured if the current management strategy doesn't work, he/she will not be following it.
Plenty of you guys get so caught up in the moment, you are blind to the big picture. All shareholders need do from here is wait for that MD who knows how to get more juice from the lemon.
SNOOPY
Percy walked through the recently revamped store in Albany recently. Big signage for Product on special but a different product on shelves. Staff did not know where the correct product was. Also people getting pissed off with setting the alarms off going out the front doors. because staff were not properly trained to deal with the security tags. Would be good buying at 50cents as the break up value would be more than this.
Isn't that the store you have to enter via a kind of cave? Have been to Barrington Mall a few times, but have always been too scared to go into the Warehouse store there. I would prefer to crawl into a real cave than go to Warehouse Barrington.
The store to visit is the Warehouse Extra on Blenheim Road. Big spacious with plenty of parking. Went in there last week, couldn't find what I wanted. Found an assistant who pointed me straight to it. Have been into Warehouse South City and found that OK too. I think you are visiting the wrong Warehouse Percy.
SNOOPY
Congratulations are in order Snoopy;Firstly you did well to find an assistant,secondarly you did well to find one who could understand you,thirdly you did well that the assistant knew where what you were looking for was,and forthly you were lucky you could find an assistant who could communicate with you,even if it was by sign language.Your lucky day.I have never been so lucky.
Yes, a bit of a 'non bet' really, Snoopy! I don't know who will be the two general retailers to displace WHS back to third - do we have any others apart from Farmers? KMart? - but a slip to that degree would be very bad news indeed for WHS shareholders, I would think. The NZ market is hardly big enough for three with the scale and scope of present day WHS. Third place would surely mean continued failure to adapt to changing reail conditions.Quote:
I am going to make a prediction. In ten years time the Warehouse will be one of the three largest general retailers in NZ (they are number one at the moment so I think it is a fairly safe bet).
Disc: Yes, still holding a few.
Personally I expect the Warehouse to be number one in 2022 Macduffy. My previous post had an ambiguity that wasn't intended.
Saying WHS will remain one of the three top retailers does not mean it will slip to number three! However I do note the rise of Briscoes. There is a lot of vacant land in CBD of Christchurch now. Perhaps an ideal situation for the likes of US based Costco to find a suitable site? Farmers are I think owned by smart people. They are already broadening the Farmers brand by opening a specialised farmers kids store at Westfield Riccarton. Just suggesting some out of the box possibilities here. Maybe WHS will not be number one in ten years time? But my bet is that it will still be there. But even if it isn't number one, it will still have scale and still have pricing power. For those reasons I see remaining amongst the top three general retailers as critical. But I don't think WHS has to be number one to remain a power player in the retail game.
SNOOPY
You guys are pretty funny :)
Being the biggest isn't the most important thing. Or being in the top three. Having the highest margins would be more worthy of a prize. Which NZX listed retailer wins that prize?
I am not going to disagree with you Emearg. So how does WHS stack up?
Operating profit for FY2012 is forecast to be between $62m and $66m. Sales for HY2012 were $938m. If we add on last years second half sales of $760m that makes a revenue forecast of $1638m.
Now 'Margin' is 'Net Profit'/'Revenue'
So the WHS margin is forecast to be somewhere near:
$64m/$1638m= 3.9%
How do other retailers compare to that in today's difficult environment? I invite owners of other retail shares to put their own case forward so we can see how WHS stacks up.
I own Restaurant Brands shares and they have just reported. I know RBD is not strictly a competitor for WHS. But they are a competitor from a shareholder perspective, competing amongst potential shareholders for their retail investment dollar. Restaurant Brands in FY2012 made a normalised trading profit of $18.4m on sales of $308.9m
RBD margin was therefore $18.4m/$308.9m= 6.0%
Anyone out there own a retailer that is doing better? It looks like when I was bought out of the Warehouse at $5, my decision to reinvest those proceeds to boost my RBD holdings was a good one.
SNOOPY