Life is tough at the bottom!!
Printable View
Trading Halt this morning pending a material ann. Must be significant.
Strategic move into financial services - http://research.iress.com.au/ids/old...089400000&ppv=
Institutional placement for what. Cant open Karens link.
Capital Raise
In support of the Financial Services Strategy an equity raising is being undertaken to strengthen The Warehouse Group’s capital base. This consists of a $115M capital raising underwritten by Deutsche Craigs Ltd, comprising:
• A $100M institutional placement at $3.23 per share, a 5% discount to the ex dividend 5 day VWAP. The placement will be conducted on 6th March with settlement on 13th March. Placements shares will be issued ex Dividend
• A $15M Share Purchase Plan, available to eligible NZ resident Shareholders on the register at the record date of 18th March. Each eligible shareholder can apply for up to $15,000 new shares, with further details to be announced in due course
And Tindall and the Tindall foundation are participating in the capital raise to maintain their level of SH.
$3.23 Inst taking re 10% , S Tyndall re 5% re 1% for retail sh/holders ex 13 c div. Highly dilutive.
Hahahaha, oh dear.
Shorts will get out, LT holders will take this as an opportunity. I think retail investors have not fully understood the amount of time required to totally implement all the changes taking place at TWH. A total change in psychology and mantra by management.
hmm. They fail at Australia, they fail at Grocery, so now they try financial.
I thought their expansion into the broader retail (T7 and NL) made sense. Not so sure with financial. however, they have done lots of financial bits and pieces for a while so hopefully they have the market data correct.
Not good that they admitting growth in the red shed will be limited.
Think i will steer clear
Would you walk past a whole bunch of fat people buying discounted XXXL track pants in order to take out a mortgage, obtain investment advice, or ask about your KiwiSaver?
If you are a financial services company, would you want to lend money to and invest on behalf of the sort of person that would answer yes?
I think you guys have the wrong idea of what they are planning. Think more consumer finance like Fisher & Paykel Finance and GE Money.
Have a look at the Noel Leeming apply for finance page for a better idea. The 3 products offered are Interest Free via credit card (GE Money), Finance Now (SBS Bank) and Easy Lease (FlexiGroup).
They have also recently created a rewards/delayed payment card called BizRewards for business customers which gives you up to 55 days to pay. Look for them to create something similar to the Q Card by Fisher & Paykel Finance for consumers.
NZ is badly lacking in Credit Card competition compared to overseas so plenty of opportunity there as well. I was looking at credit card options yesterday and The Warehouse's current card compares pretty well with the lowest foreign currency transaction fees in the market. Not a big fan of Diner's which they have purchased but I guess it gives them the kickstart they were looking for. Hopefully they will continue to offer MasterCard cards as well.
Note Countdown in NZ have also recently released a branded credit card/onecard so the warehouse isn't the only one that has seen the opportunity.
The ultimate goal I imagine would be to build a business similar to that of Fisher Paykel Finance. When it was sold it had around $600m in receivables and $37.8m in operating profit. Like FPF after they establish the finance company they can apply to be a Non Bank Deposit take to sell debentures to the public and securitise their receivables. Both will help lower their cost of lending.
Successful examples of retailers bringing their finance offerings include Smith's City and Turner's Auctions. The Warehouse Group is bigger and more diverse so I think this move is overdue and likely to be very profitable. Maybe they could even get their finance products accepted in one or both of their shareholders, Woolworths and Foodstuffs.
I agree with Jaa.Makes sense for them to clip the finance ticket.
I think WHS are doing all the right things.
However, the market may not be happy waiting for the results,which will take some time to achieve.
Exactly Percy, which is why I will top up when that occurs and take up share of retail portion of placement.
I think they would be far better off to form a close relationship with Heartland.....
Not really perc..
I see Heartland pursuing the niche markets.. Ones with profits and less worries..
Why would " We " The share holders .. Want them to enter the " I want " borrowers ... As against the " I need " Borrowers..
It would involve more paper work and more office space just for the .. Chase the defaulters staff..
I take it that both Foodstuffs and Progressive were invited to take part in the capital raising to maintain their 10% holding
hold WHS but not a particularly knowledgable investor. I see it has dropped 5% today. Was this expected after the announcment or am missing somethign really obvious like xd?
Probably a bit of arbitrage by the funds - buying in the placement and selling a few on market at a higher price. Retail investors are looking to top up at the SPP price so it all amounts to downward pressure on the shareprice.
Bobdn
ex div date is 10th March.
Thanks kiwitrev. The WHS investor centre website needs a good update.
And Dilution will need to be factored in.
Shareholders Association all miffed
http://www.stuff.co.nz/business/indu...fair-treatment
And so they should be. The insiders (OK instos and sophistiticated investors) have just stolen 9% of the company. Small retail and unsophisticated / non professionals now only own 91% of what they had.
Most NZ companies don't give a stuff about small(er) investors. More of a burden than value I reckon. The Warehouse obviously is one.
What The Warehouse forgets is that those they pissing off are probably customers as well.
What a disappointment, share price down and diluted. No interest in the small investor. Will sell on Monday at a loss, will not hold companies that do this.
Yes, disappointing but this seems to be the fashion for raising equity these days - a placement to instos followed by a modest SPP for "retail" shareholders. Of course, depending on the uptake for the SPP, a small shareholder could come out on the right side of the deal if enough shareholders are sufficiently p****d off to ignore the issue!
Isn't the problem that they can only raise a set amount by way of an SPP? Any more and they have to have a rights issue which is considerably more expensive. A quick placement to insto's and an SPP to keep the retail investors happy. The people who get diluted, who have most to complain about would be the larger private investors. I think the NZX is working on changes to the options for raising capital at the moment.
I'm going to put in an order for 1500 shares which I assume I will get.
I'm really pleased that they're bringing in a dividend reinvestment plan next year. I'll join up straight away as I always fritter my dividends away when I get cash.
WHS has over 10,000 shareholders so $15m worth of shares at $3.23 won't go far if most of them apply. Something like 427 shares each! Of course, it all depends on how many do in fact apply but I would think that applications are highly likely to be scaled.
Looks like WHS gets a beating today - already 13 cts down to $2.27 and hardly any buyers around. Wait another couple of hours and maybe we can purchase the shares cheaper on market than the institutions did in the placement last week?
Discl: holding and bought in too dear :angry: ... one to learn from!
Can someone explain what this actually means to the average investor? I bought a small amount of shares a few month back and have read all of the announcement, and I don't really understand how this affects me (apart from seeing the SP dive). Are they just selling off a whole lot of new shares at $3.23 and giving us first option to buy?
You can only purchase up to 15k worth of shares max at $3.23 about 4600 odd shares at current price so if you want to take up the offer you could do what I did today and bought 15k worth at $3.22 which works out slightly better than the offer even allowing for brokerage(With DB online anyway) and no paperwork to fill out of course if you can pick then up even cheaper then even better in your favour
Yeah, still sucks that they decided that $3.23 was good price. A long road back to the price I paid.
It does seem like a good price to buy at, but I am just a small time player who is trading for a bit of fun and can't be droppin' $15k. Especially since the NZD is getting stronger every day and killing me when I send money back. So $3.23 NZD = $3.50271 SGD (worse than that if you factor in the international transfer fee and the actual exchange rate that I will get), normally the exchange rate is ~1:1, so a bad time for me at the moment to be buying.
Sorry SK didn't see the Singapore location
Well, the issue price of the SPP is not yet decided. Quoting from memory but the price to be calculated from the average closing price for the 5 working days prior to the relevant days in April. Check today's announcment.
Goodness gracious - Rod Oram writing something positive
In that respect this is a glowing endorsement of WHS strategy ...A GROWTH STRATEGY
http://www.stuff.co.nz/business/opin...on-the-upswing
opportunity to question Sir Stephen Tindall about the Warehouse strategy (and anything else you want to know from him): Wednesday pm on NBR - bring it on!
http://www.nbr.co.nz/ask-sir-stephen
Lots of unlocked potential in WHS. Im not into retail but this could be a good investment. Good to see them cleaning up their stores and investing in the NZ market. Recent experience tells me they dont understand retail outside of NZ so long term investment potential might be risky. Not sure if they can improve their margins but if they gain exclusive supply agreements that dont translate well into online retail they may be able to work on it. Still its a high risk industry for investment.
In the financial year to July 2013 WHS sold a big chunk of their land and buildings, netting sale proceeds of $194.1m and booking pre-tax profits of $77.3m. Directors' assessment of fair value for the remaining land and buildings dropped from $284.8m to $183.8m. Still a big chunk there but clearly the company sees the value better employed in the business than tied up in property. Whether the remaining property value is reflected in the SP and/or whether the divestment process continues ...?
Didnt a few well known Australian retailers spin their property assets out to "better reflect the underlying business". I remember reading about this. Was it Woolies or Harvey Norman? I think it was to unlock value of the property that can get lost in an under performing retailer.
Yes, it was Woolies who floated the rather grandly titled "Shopping Centres Australasia Property Group". Now listed on the ASX - SCP.
Gerry Harvey has argued in the past that his company's properties value isn't fairly reflected in the company's shareprice. The counter argument is that changes in the retail scene may cause purpose-built retail properties to lose value in future.
Yes along the lines I was going to say macduffy.
Unless the property can be converted relatively cheaply to something else say warehousing/storage or housing area, as shopping moves to internet based what use is a large number of actual brick & mortar shops
Will be interesting to observe market behaviour from 2-8th April as I would not be surprised to see some sort of tactics employed to get the average CLOSING price of WHS down, as it's guaranteed that the max. SPP price is $3.23.
I think I have a solution...if you sell some at an asking price of $2.85 or so I'd be happy to buy them for you to help reduce the average price.....its a sacrifice I know but for the greater good I am prepared to help out.
Yes it would be a tricky game to play as it is only the CLOSING price of each day that is of importance.
Not sure I understand - what would be the point in playing games with the share price? If it goes below the SPP price, than people don't need to wait for SPP, but can just buy the cheaper shares on market anyway. Who would gain by artificially depressing the SP?:confused:
I agree, BlackPeter. Much more likely that the SP would be supported over the pricing period to maximise proceeds from the SPP. Not that I'm suggesting that this will happen here.
Everyone in the stockmarket is a trader..its just the frequency of trades that varies. To get the best dividend yield you need to buy at the lowest possible price...my avg buy in price with WHS is 2.84 so not so many opportunities to buy more come up. Buying at the "special" price on offer is not particularly enticing!!!
Non qualifying for SPP are taking up the opportunity to grab what they can at current capped price. So far today 70 trades avg over 15,000 each, over 1m traded. Will be interesting to see how the market reacts once SPP completed.
Hi Mac
As someone once said there are more reasons to buy than to sell.
Just to complete the picture for today, total of 97 trades, 1,730,856 shares avg 17,843 ea. trade. The last 8 trades accounted for 356,453 at an avg of 44,555 ea. trade. This is not your avg mum + dad trading and abnormal trading in this stock, so one is led to believe instos and financials in play here.
positive article on stuff:
http://www.stuff.co.nz/business/indu...dailyheadlines
At least they are in the news:
http://www.nbr.co.nz/article/can-war...ents-bd-154717
Nothing exciting - really, but an analysts summary (and a quite substantial article) talking about plans for improved product quality, better staff training and increasing customer satisfaction. I guess, time will tell, whether the investment pays off.
Looks like somebody discovered WHS as a good investment - quite high volume this morning (1.34M @ avg 3.201) - and SP rising (now 3.24). Not that I understand anything about TA, but given the quite slim Bollinger channel: if it goes another cent or so higher, than it looks like a breakout ...
I tend to regard most TA as being for amusement only but I do have some regard for volume and relative strength. What's encouraging to me about this is the good volume & the current price being $3.24
This is a 4 cent rise on the only just completed SPP placements. Some want in or more shares even after the recent top up opportunities. My guess is that some think the recently outlined new strategies will work and are accumulating now to take advantage of this early on. Finance arms can be very lucrative!
At least WHS are doing things ... and not just moaning about the ever changing world
Good on them
gosh, their PR manager must be in overdrive ... another article about the Warehouse story: quite extensive report about Mark Powell and how he is changing the Warehouse culture - worthwhile reading:
http://www.stuff.co.nz/business/indu...dailyheadlines
and that article about the CEO saying he is paid an insane amount of money for being the boss .... may have mentioned the word embarrassed
Never mind that's a consequence of how the world has turned out
upgraded to "buy" and 12 month target $3.64.
http://www.nbr.co.nz/article/warehou...-buy-bd-155078
The price target ($3.64) is in itself not really news. ft.com lists the mean 12 month target since February hovering between 3.64 and 3.70, but news is that Craigs has it now realised as well. Seems to make quite a difference for the share price.
Discl: holding (and bought too dear ...)
I am a bit annoyed at Craigs - they could have waited a day.
I decided to diversify into WHS and come this morning the price has jumped a bit.
So anyway I bought a few thousand shares.
I am working on the assumption that the recent lows of $3.19/ closes at $3.20 provides good baseline support and thus the possible downside risk is low to match the fact that the upside reward in the near time is not epic [surprise me please!].
I seem to be buying more boring stuff at the moment - odd!
Best Wishes
Paper Tiger
Whats peoples thoughts on a Fair value for WHS? , I believe at current prices this stock is a steal based on EPS,Revenue and Equity growth?
Depends on your definition of "steal". Analysts predict a 12 months target between 3.25 and 3.81. P/E based on EPS over the past 4 years looks quite good (11.2), but is inflated by one off property sales. Predicted P/E for this financial year (15.1) is o.k.-ish, but does not look like a steal in my books.
Obviously - its up to anybody's best guess how the move into consumer finance works out. Personally I would think that they have a good chance, and yes, if they do it properly, this would increase their value. If we remember good old FPA days, than the attached finance company added sometimes more value than the rest of the firm.
As well - the ongoing upgrade of stores and the (claimed) refocus on quality and customer satisfaction can only be good.
For my feeling the medium 12 month analysts prediction (mid of 3.60's) is not too bad. If finance works out however, than WHS might get a nice push upwards, but I guess this will take longer than the next 12 months.
In my view at current prices still worthwhile to buy and long term hold (and I am holding), but I wouldn't expect the trees to grow into the sky ...
DYOR.
Yes I agree with everything WHS are doing,yet I think it will take a very long time to see results.We will have to wait to see whether the capital has earnt returns or just been spent standing still.
I still think retail is a very difficult sector to be in.
Not holding.Still watching.
Good announcement today https://www.nzx.com/companies/WHS/announcements/250198
No movement on the SP though :t_down:, still happy to be on board though.Quote:
THE RESHAPED WAREHOUSE GROUP REPORTS CONTINUED GROWTH
Group Sales for Q3 of $604.8 million
The Warehouse (Red Sheds) Same Store Sales up 3.0%
Warehouse Stationery (Blue Sheds) Same Store Sales up 6.1%
Noel Leeming Same Store Sales up 10.9%
I thought so too but the market commentator on the radio last night was pretty neutral on them. Personally I liked the chairman's comment regarding the near future "... a period of consolidation, where the emphasis will be more on leveraging returns from the base we have built..." Might buy a few myself.
Confirming the uptrend with the recent break-through the MA100? Or bouncing back on the top band of the Bollinger channel? TA can be confusing :confused:. Where will it go?
Looking at fundamentals I would think that the up potential is at that stage limited (btw - Financial Times downgraded the TP slightly to $3.45 - that's where we are now), but than - if the recent earning season shapes out well, who knows what's going to happen?
Discl: sitting on the fence ... but still holding
it needs to break above 3.60 to break the recent downtrend, but is uptrending short term
No news to discuss but thought it worthy to mention today a single trade 150k @ $3.40. Not your average everyday trade. Someone likes the Red Sheds.
The WHS charts are going to look like someone jumped off a cliff tonight bought some at $3.27 but closed at $3.24 and could possibly go lower looking at depth,hopefully she'll bounce though.