Disc: SCY :)
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Bricks you be pleased to know i spent a couple of grand on a TV at LV Martin just before Xmas .... screwed a few hundred of the price but knew too well that it would be cheaper in the Boxing Day sale but never mind that they do a have a 24 day price guarantee .... only hassle is you have to go back and ask for the extra few hundred thay took after
Its the old Newbolds store in Adelaide Rd .... seems to do OK ..... would have preferred to go to JB Hi Fi as a shareholder but parking and service does go a long way .... and the price was much the same after a bit of haggling
hi bricks
received scy interim report today.good stuff.
during december the company opened a new smiths city store in porirua.
the store has traded strongly since opening .,anticipates having a second store trading by the end of this financial year.in wellington market ps i note their year ends 30th april. cash flowfrom operating activities excellent $3.881mil.
Look forward to your positive posts when you have read the report.
I had a quick browse of their Interim Report, can anyone give comment on why SCY are trading for such a low price relative to NTA.
All in '000
CA
Cash 2,595
Trade 11,046
Property -
Inventories 34,956
TCA 48,597
SCA
Cash 686
Receivables 54,517
Receivables 34,900
TSCA 90,103
NCA
Property 24,603
Intangible 3,539
Investment Properties 1,220
Investments 636
Deferred Tax 3,793
TNCA 33,791
TA 172,491
CL
Overdraft -
Term Loan -
Borrowings 9,362
Trade Payables 22,720
Other Payables 597
TCL 32,679
SCL 80,477
NCL
Borrowings 14,375
TL 127,531
Net Aseets 44,960
With 52,956,884 shares on issue this gives a NTA of 78.2 cps. Last price 39 cents.
The largest asset at 54m is Smithcorp Receivables (its financing arm). So is the big discount due the the market believing that this money won't be repaid? or that a lot of the lenders will default on their repayements?
The revenue of 1,018,000 for 6 months gives a PE of 10.1, if they do the same for the second half of their financial year.
Year end Apr 2009 profit was 1m.
Year end Apr 2008 profit was 3.5m.
Year end Apr 2007 profit was 3.6m.
Silverlight.
I have been a shareholder since 1991 and have asked that question 100s of times.
here are the reasons; competition.
low margins.
retailers have large leverage liabilities with store leases.
scy have a large staff which means a large consta nt cost.
Interesting notes on cost, their profitability is there to see though, even in the horrible 08 -09 year they were still profitable.
They own a lot of their own property as well, so I don't see leasing as as issue, I also find it quite intriguing that they pay two dividends a year with no Tax Credit's!
It would be more beneficial for the shareholders if SCY did an on market buyback of shares and save up the tax credits, especially when such a discount to NTA exists, unless of course mgmt don't beleive their own figures on Smithcorp.
SCY have so many millions in tax credits its not funny .... they won't be paying incoome tax for years
Therefore your divies are 'inflated' by SCY not having to pay tax ... therefore no impuation credits attached
Expansion into Wellington could be interesting ... there is void of big furniture shops in the area as a result of a few casualties in recent years
Maybe void was the wrong word ... maybe less than there were
Big Save has a decent sized stores and Harvey Norman is pretty big in Porirua and Lower Hutt for furniture
Thinking that the likes of Radfords and Hazelwoods have gone in recent years
NEW STORE OPENING
Smiths City Group Limited (SCY) advises that it has signed an unconditional
Agreement to Lease with Trentham City Investments Limited to open a retail outlet in
a new retail development in Upper Hutt. The shop, with a foot print of 2,196 square
metres in area, will open for business in March.
The Upper Hutt opening supplements a successful opening of a 1,800 square metre
shop in the Porirua Mega Centre prior to Christmas.
The openings are the result of a strategic review by the board of SCY which has
identified Wellington as the best area for immediate growth.
As reported in the recently released Half Yearly Report as at 31 October 2009, it is
expected that the opening of stores in the Wellington area will make use of the
logistics already in place for the operations of LV Martin & Son without increasing
Group warehousing and delivery costs.
The company will continue to seek other opportunities in the Wellington region.
WELL @ 40 cents it would take NO effort to hit 50 cents a 20%+ in the short term and with the plan for 4 shops in the WELLINGTON area could all happen in the next 3 MONTHS..
But 50c is a brave call on a stock that's hit 40c a couple of times in the last 15 months without being able to break through.
Good luck. I don't hold.
Since May 2005, BRICKS has missed the fact that this is a forum, where posters offer opinions and perspectives from differing viewpoints, that won't necessarily, and very quite likely, agree with his opinion. Just because someone does or doesn't own the same shares, doesn't mean that they don't have a (valid) opinion or point.
IF anyone notice`s the new store @ upper hutt is going into action could you please
advise BRICKS..
I was in Timaru on friday. checked out new smiths city store.on same lines as their other stores.pretty big store with a good layout.
Will be back there this friday ,so will check out powerstore.believe it is in old smiths shop cut in two with kathmandu in the other half.
THANKS for the NEWS but is TIMARU a growth town it seems this the go in the South Island for SCY they have been expanding into larger stores for some time now in many towns
but the SOUTH does not make the profits according to the size of the shop.. Feel the NORTH Island expanding would have been better for profits just by the number of people
who live THERE..
You are right there Bricks ,still all regional stores and new stores have impressed me.I was thinking of Greymouth,but then I was impressed with Kaikoura,Ashburton.Oamaru,The huge one at Dunedin is a cracker.all done including north island expansion with out coming back to shareholders for more money!!! I look forward to north island posters to see if they are impressed with SCY stores.
hi bricks,
timaru revisited today.power store now very well located.with scy big store and now a good power store,we have timaru covered.my experience says regional stores do very well.it is important to remember your customer base.
FURTHER EXPANSION IN WELLINGTON
Smiths City Group Limited (SCY) continues its strategy to expand into the Wellington region with the opening of a new store in Queen Street, Upper Hutt.
At 2,196 square metres in area, it is the second Smiths City store to be opened in the Wellington region. The Upper Hutt store adds to the one opened in December at the Porirua Mega Centre. It will carry the full range of product traditionally stocked by Smiths City which includes appliances, furnishings and sporting goods.
The new store will make use of the storage, delivery and installation structure already in place for the LV Martin & Son retail chain, also owned by Smiths City.
As referred to in the Group’s Half Year report, the Wellington area has been identified by directors as the best area for immediate growth.
Smiths City will seek further retail opportunities in the lower North Island to increase its coverage in the region.
SMITHS CITY at last seems to be changing its approach to biz as to its past habits as 1 July 2010 cutting ties with F&P and change its whitegoods approach along with
better located stores it stands to move forward the full year should show better RESULTS..
NAUGHTY BRICKS been out buying more SCY for Xmas o what a feeling with all these new Wellington stores money for JAM..
Headline results look good even though management say that such a resukt would be unacceptable in normal times
Razor thin margins - $1.6m (no tax) profit on $230m odd revenues not much is it
From the accounts the retail arm continues to trade at a loss .... what profits there are come from financing arm
Wonder what 'normal times' would deliver?
WELL 69 profit up 60% and NTA a real 79 cents plus a 1 cent div along with expanding well into the North Island
and payed for as you go all you need now is customers like all the other shops find it hard to keep up..
Look at PPG they try every thing but does not work, how do you know Harvy Norms is doing well because they dont
have to tell any one, Noel Lemond who are reporting to so SCY is not that bad..
ITS the NZ public share buyer`s they dont support not that many companies in NZ, STU, GFF, and others so one day
you may have a better MARKET..
I see this morning's daily sharechat was SCY.Mcdouall Stuart value them at 71cents and their recommendation is Buy.
BRICKS asked Rick Hellings if a share buy back had been considered he said all options had been look at but at this point of time the company wants to continue its expantion in the Wellington area with two more stores making 4 in
number as he feels the increase in stores would produce more profit.
But he did say if the company could not find good sites or trading changed the buy back could be an option which BRICKS agrees with so this is the two alternates time will TELL..
AGM was held this morning.Chairman Craig Boyce and Chief Executive Rick Hellings spent a lot of time explaining the business,the finance company,NZ GDP,where they see SCY in the market place,and SCY's future growth prospects in the North Island.Pleasing to see director's giving shareholders so much insite and information about the company they own.Nice to meet mouse,and Boyce confirmed when asked by mouse that they intended to pay out half tax paid profit in divies,while retained profit will be used for expansion.No one asked about shareback.Last time I mentioned it to Boyce he had an adverse reaction to it, and I am not game to mention it again.We await your return to good health Bricks and look forward to you asking about it at next AGM.
will the share price drop on monday because of the earthqauke?
SCY may do well with people having to buy new carpets,new TVs and furniture.The Alectra service division will be keep busy.The SP could go up.Still very thinnly traded. With having their own finance company,a lot of customers will make use of it to replace damage possesions.
Well done SCY.Profit,paying a divie.Positive Colombo Street store will be rebuilt/upgraded.
Those 831 small (mom and pop?) shareholders will be in tiz when they get the letter from SCY .... hope they don't think it is Mr Whimp or whoever it is and ignore it ..... then SCY wil sell there shares for them anyway by the sounds of it
Good stuff .... made some money in the retail shops this year
Splendid in comparison with what they did last year. In real terms 'net margin' and 'return on shareholders funds' at SCY are well under half that achieved by 'The Warehouse' as a comparative example.
Now, how does the five year average dividend valuation for SCY stack up? The dividends declared over the last five years are as follows:
-----
2012: 1.0cps, 2.5cps
2011: 1.0cps, 1.0cps
2010: 1.0cps, 1.0cps
2009: 1.0cps, 1.0cps
2008: 1.5cps, 3.0cps
-----
That equates to an average dividend of 2.8cps. SCY does not pay tax because they are sitting on a large pile of tax losses. So in this instance, because the shareholders do pay tax on receipt of SCY dividends, the gross income for shareholders is the amount of the dividend paid.
2.8c/0.08= 35c
That may look low with buyers in the market at 50c. And if SCY can keep churning out results like they did this year then 50c is probably a more accurate valuation. But can they?
SNOOPY
I think one thing Smiths City has done well is recover from the Christchurch earthquake quickly. Their store in the centre is now up and trading, even as a grand redevelopment is planned, while rivals like Harvey Norman across the road show no signs of reopening. In addition the secondary stores at Upper Riccarton and Belfast have allowed Smiths City to continue tradiing through a visible platform right through the earthquake season. But as the competition comes back, then Smiths City will have to outmarket their rivals to maintain this momentum.
Also how much of the 'trading income' they declared for FY2012 was in reality interruption of trading insurance payouts, rather than real sales?
SNOOPY
Not only have Smiths City recovered well from the Christchurch (big) earthquake but of course they are "disproportionately" represented there, in that Christchurch forms a major part of their business. Seems they have captured a big chunk of the business in furniture/appliance replacement via insurance payouts.
Just took advantage of my Shareholders Xmas discount. Havn't been into the shop in Colombo St since it reopened, was pleasantly suprised at the range and variety of stock considering the smaller foot print.
Impressed with the quality of the sales staff and the product knowledge, quite happy to look in manuals and product books instead of pretending that it was the perfect product for me. Also felt they were listening to me rather than adding up their commission.
Pricing was pretty competitive I bought some kitchen items that were good quality and pricing less than Briscoes, Farmers or Stevens on sale. Checked out garden products similar to Bunnings prices.
Looking at appliances also comparable to NL HN and reasonable range, will probably take advantage of the discount on appliances by the end of this week.
Hope you put on the never never ..... financing is where they make their money
Cash is king, sometimes.......
Today's announcement that Smith's will end their finance company funding from FPF [F&P finance for 30 years] to ANZ is no surprise.What was a surprise was that they were paying 10% for their funds.New finance is from ANZ [National Bank have supported Smiths well] at 6%.Smiths will use the savings to remain competitive in their HP deals I expect.Must be no love lost with FPF as they are charging Smiths $1.4m break fee.!!!Bet Craig Boyce will be looking for a new whitware supplier.May cost FPA a huge "slotting fee" for Smiths to stock FPA appliances.Does $1.4mil sound fair?
Percy who in there right mind wants F&P appliances anyway. May be some of the reason for the split. They did not want to have to stock F&P appliances.
I really don't know more than I read.
I sold out my SCY shares a few years ago.
However F&P and SCY certainly had great respect for each other,F&P supported SCY through their receivership,so it is the ending of a very long successful partnership/business relationship.
Its been a while since anyone posted on this stock. But their Annual Report is out today. THey had a what I thought was reasonable profit announcement a while back (one off items accounted for 5.5m) and operationally they reduced their profit but we all know its been a tough time esp for retailers. But I am excited about the restructuring of their funding for their Finance Division. They now borrow the money from the bank (to speak colloquially) and this will give them savings annually of $2.5m which will go straight to the bottom line. THis is in itself 5 cents per share. For a stock trading at 65 cents this is material. Even if operational profits remain flat at about $2m total profit will still be in the vicinity of 9 cents per share and that I believe is a pretty good buy. Any detractors out there please set me straight about all the caveats investing in retail or this stock in particular.
please dont get pedantic about my figures... they are very approximate but its the story im trying to tell not amaze you with my mathematical genius :) ;)
In theory you are correct.
You just got to hope they don't give that extra profit away, by offering cheap finance deals to attract customers [as they did the last time they had a big interest saving]. The retail space they are in is madly competive.Harvey Norman often give very long interest free terms,which Smiths have to match to stay in business.Their margins are very slim.With price deflation,they have to sell more to stay where they are. You will note their turnover has decreased over the last few years.Fixed overheads remain very expensive.A large staff is a big liability.A large vehicle fleet is a big ongoing cost.
Radio advertising this morning some 'really good specials' and 40 MONTHS FREE CREDIT
Wouldn't know if his more than they normally do but from Percy's point tempting to do this sort of activity
You are excused from your native tree planting,so take advantage of those specials.I look forward to your Sunday morning rave telling us what wonderful products you brought.!!And the lovely 40 months free credit,!!
Money saved can be used to fly down to ChCh so you can take advantage of my offer to transport you to and from HNZ agm.
When I was in charge if the household duties when wife indisposed a few months ago blew up washing machine, drier, electric wok in. Week.
L v Martin got the business. Always bought everything from that shop back when it was a 100% outfit because of the service etc and price matching. Must say l v Martin do a good job as well ....all the purchase history still kept there and they say hey mr winner you good client we deliver and install free for you because we know you useless at putting things together and getting them to work.
So no need for anything today ....just heard the ad on the radio.
Do they normally do 40 months free credit ..maybe taking advantage of healer money
Great that you support L.V.Martin.Great business,great reputation.Great that it is owned by SCY.
I don't know about the 40 months interest free.
You will laugh at me.Wife and I have not been able to agree on a new lounge suite.Saw one we agreed on at Smiths in Tauranga.Went into buy it here in ChCh.Well price just kept going up,yes the leather is lovely,yes that leather is a lot softer ,etc.Silly old me paid for it.!! Yes we will deliver free when it arrives in about 100 days.So most probably using my free money for the promotion.!! I would only have brought more HNZ shares with the money.!!! lol.
Not sure how these Interest Free offers work (from a retailer point of view)
They are financed thru a finance company and the FC give the retailer a commission?? or do SCY have their own fnance arm and does the retailer get the funds straight away??
The finance company bank on alot of people not paying off within the interest free terms and/or buying more stuff with the credit limit.
I read recently that a lot of these big retailers are wanting you to buy on credit/interest free as they make more money this way??
Disc: Not a holder at present
SCY have their own Finance Company .... about half the company profits come from Finance
So all inhouse - so even if 'Finace" gives 'Retailer' the cash or not when things are sold are not not really relevant
The cost of finance comes off the retailer's margin.
The retailer must pay the say 40 months interest.The retailer offcourse pays a lot less interest than the customer would.
So the longer the interest free time is, the greater the cost to the retailer.It is a sales tool.
Same principal with cars.
However financing cars ,or furniture/appliances is very profitable,refer HNZ thread where we looked at UDC and FPF profits.
Smiths' Finance company borrows money from ANZ.ANZ will want their interest no matter if Smiths charge interest or not.
I take it Smiths charge booking fees and insurance,and if you have not paid the item off at the end of say the 40 months then you start paying the full [profitable] interest.
I note in this year's annual report they have approx. 64,500 active accounts.
I see in this morning's The Press that Smiths are still waiting for rebuild demand for their products.
I've recently gone over their figures for the last few years... I think on a macro basis they should be well placed with rebuilds and greater economic activity next year, yes they have small margins but their ROE has returned to acceptable levels and they're competitive in the P/EPS. chart activity would be a problem wit few trades...
The share price is testing the 200 day moving average,so take care.
but is that all that relevant if the liquidity is poor in the first place? traders obviously are more likely to invest in stocks with high turnover?
I have checked yahoo charts going back 10 years and find it very relevant.Take care.
Another reasonably respectable result from Smiths considering all the issues over the last few years
EPS of 7.7 cents so currently on PE of about 8
Finance book of $70m odd
Percy - you were a bit down on them .....things improving?
Me just a satisfied customer at nearby Martins ......match cheapest price in town, great service and install things for free (even TVs have too many wires these days)
Definitely an improvement on last year and if you dig into the cash flow statement provided you can see that the majority of the profit is attributable to the finance division. Rick Hellings confirmed that when I spoke with him yesterday but did say the retail operations were profitable but "bloody hard work". He also said the homeware division was doing better than the appliance division.
7.7 cents (after tax correct me if I am wrong) on a shareprice of 54 cents if very acceptable to me. A lot better than last year but you would hope that things are going on the up.
Thanks for those insights blackcap
Finance has been the main driver of profits for a while.
Must be hard selling product in this market. Plenty of choices where to buy and ultra competive.
As I said location and service makes me one of the loyal customers. They just look in the computer and say yep Mr Winner what can we do for you this time....and make friendly comments like did your son appreciate the new fridge Mrs Winner bought him the other day.
Rick Hellings is "a breath of fresh air." Good directors, top CEO in Hellings but "bloody hard work" sums it up.I note they have closed Riccaron and Invercargill Power Stores.Slim margins. I no longer hold.The reasons I sold out remain.And yes our family are loyal customers too.Good products,fair prices and you know they service what they sell through Alectra.
Thanks noodles.. I did see that tax paid was very small. But the result is still after tax but yes tax may impact more in subsequent years. Yes a credible result and I am happy that their finance division is doing well. I guess by having a finance division it helps you weather out the tough years and also means you can sell product at cost? if people are going to buy via finance. So that gives a competitive advantage. Dividend not imputed either this time around but once they get to paying tax again maybe they will pass it on. I might look to accumulate a few more as funds arrive but am wary of retail as the whole sector seems to be suffering.
They did have millions in tax credit.
Not sure what they have left before they need to pay tax ?
What you have to careful of is that they do not give away finance "profits" attracting or trying to stay in business.
The 2013 accounts showed tax losses carried forward of $11m odd. Goes back to their pre-receivership days
So a few more years of tax relief yet
Whre is the divisional result breakdown in the released results noodles? Or are you just looking at the cashflow statement?
Interest Received- Smithcorp Finance: $7.9m
Interest Paid - Smithcorp Finance: $2.9m
=> net positive cashflow from Smithcorp Finance $5.0m. That is rather a high proportion of the 'Trading Profit' of $5.5m!
SNOOPY
I think that is the correct way of looking at it.Farmers used to be the same before they had to sell their finance company to FPF.
They have very few problems with loans.Most hire purchase agreements are put in the wife's name.Welfare will assist with payments should Hubby leave the nest.! A lot of families always have something they are paying off.Smiths' have a reputation of working with people who face hardships,rather than against them.When Smiths went into receivership a great deal of people paid up their accounts trying to help Smiths.
Thanks winner69 for the up to date figure.It was amazing out come for Smiths.One of their auditors thought the way The Smiths City Group was structured, they could claim subsidiaries tax losses.The board then financed the cost of research and fees in claiming those losses. The rest is as they say history.
I queried Rick on the divisionals with reference to the cashflows. He did say the cashflows are a little skewed in that there are timing issues with recievables etc and that it does not paint a complete picture. But admitted that most of the profit came from the finance division. Annual Report should provide further detail.. out soon according to Rick.
There are actually three arms to Smiths City.We know the retail and the finance arms,but have not mentioned their third arm,property.
The property arm retains ownership of Colombo street,ChCh store.The property arm has also achieved good property development profits.These have been achieved by buying a property,upgrading it,openning either a Power Store or Smiths city,then onselling the property.New owner has a great listed retailer as tenant.Development margin gained by Smiths City.
Now I was thinking if they don't buy an existing Auckland furniture retailer they may start developing their own sites.Have done it very successfully in the past. Gore,Invercargill,and Gisborne come to mind straight away.
Blackcap.If you see them doing it in Wellington or Auckland you know they will make good money.
Just done a quick EBIT to segment assets ratio for SCY finance. Assuming:
1/ the finance division EBIT is $5m (maybe a bit high)
2/ Smithcorp Finance Assets are $1m + $42.2m + $29.1m = $72.3m
Then EBIT /Segment Assets = $5m / $72.3m = 6.9%
Using just the end of year balance to calculate this is suspect. But compared to the previous year the changes are small. So I think it is fair in this case.
Compare that to the equivalent figure from Dorchester Pacific and Turners (my post 983 on Dorchester thread). (I admit that comparing motor vehicle finance with household item finance is not an apples with apples comparison.)
------
So the FY2014 EBIT for the DPC finance division is $3.360m - $0.01014m = $3.350m
We also are told the segment assets for the finance division total $37,953m at years end.
So EBIT /Segment Assets = $3.35m / $37,953m = 8.83%
Now compare this with the equivalent TUA finance division result:
TUAF FY2013 ($1.861m-$1.151m+$1.926m) / ($10.684m + $14.916m) = 10.3%
------
Despite SCY making most of their profit through finance, - Smithcorp Finance is Smith's City's declared golden goose- , it does seem that the SCY finance division is not as fundamentally profitable as that run by Dorchester Pacific or Turners, both in the motor vehicle lending market.
SNOOPY
What's their leverage /equity ratio like?
Winner69, on a PE =8, even I might be tempted to have a stab at this retailer.
However, I think to get a realistic figure for operating EPS, we should adjust as follows:
1. Remove the insurance proceeds of $550K
2. Apply a full tax rate of 28%
So now we can calculate a normalised NPAT as follows:
(trading surplus before tax - insurance proceeds) *(1- corporate tax rate)
(4700-550)*(1-.28)=2988
So my normalised NPAT is $2.88mill
EPS=0.057
PE=9.52
Still not expensive, but perhaps not such a bargain
I agree with that statement.
My concern is using part of their finance company profits to drive retail sales,24 month and 36 month interest free terms,can be "set" against finance company rather than retail company.
Historically FPF made good profits out of comsumer lending.however Marac's motorvehicle lending was more profitable.
Both forms of lending have very few problem loans.
Well a few changes going on the Smiths City share register.Long term holder [former chairman/director] John Holdsworth has sold out.Holdsworth,was an excellent director.I really respected him.
The arrival of Duncan Saville's Utilico,will be interesting!?
Yes ; vaguely remember him doing well in Utilico i think but not shareholders?
Arvo,
Surprised no ones made a comment today about SCY's recent report they had Edison commission. Had a skim through and will be an interesting 24 months if there considering moving into Waikato and Auckland space. Agree that they would need to acquire a smaller operator with some sort of distribution centre in Auckland. Wonder how far the SCY team have developed this to date? Do they have half a dozen potentials lined up?
Thought exhibit 10: peer valuation was a bit rubbish (vary different retail groups compared) but other than that pretty respectable report with a steady as she goes mentality. Have kept a lazy eye on this one for a while.
Not likely to dip my toes in just yet but inching closer.
Would appreciate others thoughts.
Cheers
Loved the Edison report.According to it the future looks very bright.Share Price value over 80cents.More profits in furniture.....Yes great stuff...
Then read Rick Hellings agm address for a reality check;"We expect trading to continue to be tough and we have to absorb increases in interest rates".
It is not going to get any easier for them.
Presumably, they get the report written to try and get the share price to a point where they can reasonably use equity in some form to fund the purchase of an appropriate business in Auckland/Waikato?
I think any one reading it and acting on it would be making a big mistake.!!
"He who pays the piper calls the tune."
SCY commissioned this report.
But Percy me old mate Smiths say 'This report has been prepared using information that is publicly available. It should be noted that the opinions and conclusions in the report are those of Edison Investment Research Limited and not Smiths City.'
See, it is independent
Giday you grumpy lot...can you folk post any holdings please...just asking is all.
Above posted 08-07-2010.
I used to be a top 20 shareholder,as was my wife.A very successful investment, as I started buying them the day they were delisted from the NZX and going into receivership.I kept buying their shares off market from Christchurch brokers who had estate holdings to clean up.At one stage I was receiving in dividends what my original shares cost me.!!!
I sold out a few years ago.My reasons for selling were.Competition,low margins,increasing staffing costs [ie extra week holiday,and company having to contribute to staff Kiwi savings],huge costs with large fleet of vehicles.
Earlier this year I brought some SCY shares off one of my daughters as she needed some money.Sort of felt a traitor selling out of Smiths.Thought they would do well with the ChCh rebuild.They when I read the latest annual report I realised nothing had changed.The issues that made me sell were still ongoing.I then sold the shares I had brought from the daughter,so neither my wife nor I hold any SCY shares.The other daughter is still holding her shares ,so I still have access to the annual report.
You may think they are "well positioned",however I think they are still on the road to nowhere.
Always good to see the face of who is running the company.
https://www.youtube.com/channel/UCZ6...wG_IrR64NZAkOw
Sweet and sour. They sell Colombo Road store for $20m (38 cents per share) but then say they are going to put the money back into the business. Bye bye 38 cents is my initial thought. The retail division is still making losses, only supported by finance which keeps posting profits.
I am really disappointed they did not give at least half of the proceeds back to shareholders. Might consider whether its worth staying with this investment. Cannot see retail (in its traditional form) getting any easier.
ASSET: SCY: Smiths City Colombo Street Property, Christchurch 11:36a.m.
SCY
07/08/2015 11:36
ASSET
PRICE SENSITIVE
REL: 1136 HRS Smiths City Group Limited
ASSET: SCY: Smiths City Colombo Street Property, Christchurch
7 August 2015
SMITHS CITY COLOMBO STREET PROPERTY, CHRISTCHURCH
As advised to the shareholders of Smiths City Group Limited in its annual
report for the year ending 30 April 2015, the directors have engaged Colliers
International to investigate market interest in the Colombo Street property
including the possible sale and lease back of the property.
The company is pleased to advise that Smiths City Properties Limited (one of
its subsidiaries) and the owner of the Colombo Street property has entered
into a conditional agreement to sell that property. In addition Smiths City
(Southern) Limited (another of its subsidiaries) and the main retail trading
arm of the Group has conditionally agreed to enter into a lease in respect of
the property from the new purchaser.
In terms of the sale the subject property is located at 550 Colombo Street,
Christchurch. The sale price is $20 million plus GST. Settlement will be 18
September 2015 conditional on satisfaction of the further terms in the
agreement. There is a due diligence condition and lease approval condition
both inserted for the benefit of the purchaser within 10 working days. The
agreement also contains conditions requiring the approval of the transaction
as a major transaction by both vendor Smiths City Properties Limited and the
shareholders of Smiths City Group Limited. In terms of the latter approval,
this will be put to shareholders of Smiths City Group Limited at its annual
general meeting to be held on Tuesday 25 August 2015 in Christchurch.
With regard to the lease the commencement date is to be aligned with
settlement of the property and rental is $1.409 million per annum plus GST
and outgoings. The initial term is for 12 years with two further rights of
renewal of six years each.
This transaction is also subject to the approval of Smiths City (Southern)
Limited and the shareholders of Smiths City Group Limited as major
transactions.
ROY CAMPBELL
CHIEF EXECUTIVE OFFICER
0272239574
http://www.stuff.co.nz/the-press/bus...-and-leaseback
So Ron Brierley taken a reasonable stake in Smiths City
Must be after the shareholder discount for the fridge ....oops Smiths City don't have a branch in Sydney and going down to Harvey Norman would be a better bet.
Must see something in the business. Obviously not Colombo St seeing that's gone. Must be the finance part.