Maybe Ron read the Edison valuation and said why not.
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Maybe Ron read the Edison valuation and said why not.
Ok they have repaid debt with their money from Colombo road. Thats ok. Retail making profit again but at the expense of the finance company. Not glamorous... but at 56 cents a dividend of 3.5 cents per year (unimputed) and EPS (normalised at about 8cps?) is worth holding onto for now....
NTA of 90 odd cents as well gives a bit of a buffer.
https://nzx.com/companies/SCY/announcements/275603
Hard work indeed Percy, but with the finance company, if they can make $4 per annum (8cps) on a 56 cent stock, is still a 14.28% return on investment. And I am happy enough with that.
A good result on Friday.
Anyone still following?
I did see that, but what I meant was that if they can keep making profit from trading (and not taking $ from the finance business) then this will go over $1. The market will have to have a few years of consistency for this to occur though. But a lot better this time than what I was expecting :)
Cheers for the caveat Percy! (in the meantime I am happy with the last 3 or 4 years 3.5 cents fully imputed annual dividend)
Haha yes off course, thanks for pointing out. Got confused with another stock. Still not going to sneeze at the 3.5 cent annual, and if when they get consistent sales then all steam ahead. This is a good start, if the retail arm can break even or better the finance arm will pave the way. Cannot complain to now what SCY have done in the last 3 years, considering market conditions as well. Happy to hold for potential turnaround.
I seem to remember sales were about $205mil ten to fifteen years ago.
With such fine margins sales growth will add liitle to the bottom line.
As you point out the profits come from SCY finance.So they had better not give away margin trying to maintain sales.
They said Taupo store is going well,but I hear JBHiFi are opening in Riccarton Mall with whitware,so competition will only make an already difficult market even more challenging.
Today's announcement that Tony Allison will join the board as representative of UIL Ltd is positive step for the company.
A little more interest in SCY, I see Ron Brierly et al have increased their stake to 17.7% or thereabouts. So either they go to 19.99 and stop or they do the takeover thing. Wonder what their game is. Nice to see SCY in the 60's again though and cum a good 2.5 cent dividend.
Some media exposure for SCY...
http://www.stuff.co.nz/business/8294...er-smiths-city
Think Ron will make an offer for SCY
I see GFI are matching Ron share for share
Company performance improving.
Don't shop there any more seeing they closed the local shop that provided fantastic personal service (ex LV Martin store)
well they are now at 19.8 or so % so cannot buy anymore without an offer. You could be right, Sandon Capital really do like the prospects and think a shakeup at board and management level will help SCY, and the fact that SCY trades under NTA. (p.16 of attached PDF)
http://www.asx.com.au/asxpdf/2016111...prhhd5m0c9.pdf
Some fun things in the interin report.
Looks as though the usual yearly "one offs" will continue next year,should Roy Campbell get his way for a new information platform.
Roy has certainly upset the staff replacing loyal staff with his people.Now a them and us atmosphere.
Love the cash flow hedges in the accounts,whatever they are.?
Moving away from supplier rebates could be costly.
Still appears to me to be a not for profit retail operation, providing customers for their profitable finance company.
Offcourse the finance business would not survive without the retail customers.
Not owning any real property,I find it hard to see how the NTA could be realised.
Like other retailers SCY have to work extremely hard to make profit.
Is he concerned enough to sell out? Good price to do so if he wants to.
Thanks Percy, such anecdotal insights are welcome and I do not ignore them. Will see how it plays out in the coming year. Interestingly enough though Sandon etc are interested in this company and Duncan Saville who is astute also took a stake a whole few years ago. I cannot complain since I purchased shareprice has gone up and consistent dividends. Yes retail is breaking even but its tough everywhere so if they can break even and thus support the finance company that is all that is really required for adequate return on capital.
No he has been a holder for a good number of years,and just unhappy about "club Roy".
As you may remember I was a big holder of SCY a number of years ago.Today only hold a few.
However all these changes,ie selling Power Stores,Alectra and Colombo St property should have been done years ago.So it falls back to very bad decissions at board level.Years wasted in the wilderness.!
Yes I agree Duncan Saville is astute.
Value? The only value I can see is if SCY were to franchise the business,as per Harvey Norman.
Cheers Percy, yes I do remember and thanks for the PM conversation a while back. Cheers for getting back with my query. If "club Roy" is sowing seeds of discontent that is not a good thing. I will give them the benefit of the doubt for now.
Your reference to cash flow hedges got me doing some digging. Seems it is an accounting tool.....
http://www.accountingtools.com/cash-...dge-definition
Soldiering on.
Tougher trading conditions.No surprises there .
$5.7mil to be returned to shareholders via a 3 in 20 shares buy back at 72cents is interesting.
So shareholders will own a bit bigger slice of the cake, and have some cash to enjoy,but still the cake does not look very appetizing to me.
I bought some shares in Smiths City a couple of years ago when I read two companies connected with Sir Ron Brierley in Australia (Mercantile Investments and Sandon Capital) were accumulating them. They publicly advised at the time that the two companies would work together with their respective holdings, and they have now each accumulated 19.8% of the stock, so companies connected to Ron Brierley now control 40% of the company. As I understand it, they can not buy any more without launching a takeover bid.
Since they started buying, the share price has gone from 50c to the mid 70’s, and now after the buying from Australia has dried up, the price has inched back to mid to low 60’s. All on low volume.
The dividend at the current price is about 7.80% gross. Audited NAB of about 90c.
The company recently announced a 3:20 share buyback @ 72c. An extra-ordinary shareholders meeting is scheduled for November where share holder approval will be sought for this. The buyback is from insurance proceeds and a property sale, so as advised by the company will be a capital distribution. After the buy back (which is 15% of the total shares) the shares will be cancelled.
The company has just had it’s 99th year celebration, which they have reported was their most successful sales promotion yet. The finance company side of their business (78,000 active accounts on their books) continues to tick along, so I guess there is a good synergy whereby they sell the item and finance it themselves, so thereby getting two ‘bites of the cherry’.
They have recently expanded into Auckland and Northland.
I’m not aware of any NZ institutions or Kiwisaver providers with any relevant holdings.
Are there any other shareholders on this forum, or anyone actually, with a view as to what they think might happen going forward. The Ron Brierley of old is a well known corporate raider, and doesn’t buy stakes in companies for altruistic reasons.
There has to be an exit strategy for Brierley and the two companies. I have nothing to back this up, and it’s a bit of crystal ball gazing and fortune telling, but with the share price having been driven up when they were buying, and now drifting back down quite a lot after they stopped - maybe they wait for it to get as low as possible, then launch a takeover? At say a 10% premium to the then current share price. Everyone will think that’s really good considering where the price was before the takeover offer.
What they do after that is anyone’s guess, but they will certainly be trying to extract the 20-40c difference between share price and NAB.
Ideas anyone??
Brierley never had an exit plan with BIL or IEL,IEP,TKM,or Mt Charlotte..
Doudt he has one here.
NTA will quickly disappear should they show a loss,and with such slim margins the stock take,could result in either a profit or a loss.
The profitable finance company, depends on retail to supply the customers,so not a lot of value without retail.
Take care.
Thanks for that Percy. I appreciate your comments. I thought a few more people on here might have been holders and had a view, but I guess it’s not a widely held stock. Time will tell I suppose. And btw, you were one of the people I referred to in my first post on this forum. Cheers.
Hi Dubya, I do hold a few of these as well. Happy with the 3.5 cents per annum dividend to date, but watching with a wary eye as to how the company keeps performing. Its a tough market out there. The icing on the cake is the finance division which pretty much makes all their profit. So retail is pretty much breaking even. So can go both ways here. Can get a margin of a % or 2 and really do well or make -2% margin and really start to suffer. What Brierly and Sandon are doing I am not sure, Sandon say they are activist investors but to date have not really seen any "activity" from them. Good luck.
There have been some huge changes made to SCY's business.They should have been made 10 years or more ago.
Alectra service division divested.Was a loss maker.
Power Stores.Closed.Another loss maker.
Colombo Street store .Sold and leased back.
Finance Company.Being more active,ie offering customers personal loans,other than loans on products sold by them.
These are big changes for a company SCY's size and all done over chairman Craig Boyce's dead body.!!
So plenty of activity.
The only way I could see SCY making money is to do a Harvey Norman, and franchise parts of the business.
This doesn’t read like a very good announcement
Tough times
https://www.nzx.com/companies/SCY/announcements/309192
“Meanwhile, the rebranding of the former Furniture City store in Whangarei, is showing early signs of delivering on its promise. Indeed, in the period it has been operating under the Smiths City ‘live better’ brand, its weekly sales have been 26% ahead when compared to the same period last year before the rebrand.
The Whangarei store opened 4 September and it had opening specials so yes sales should have been up.
I went in one Saturday 2 weeks ago at 10am and I was the only person in the store. I wasn’t impressed and I would be unlikely to visit again just to browse.
I liked Furniture City, as it had a good range of quality furniture at reasonable prices and I was disappointed to see them close. I have bought quite a bit from them over the years.
Does not get any easier.
Damn, that's a painful 6mth statement to read. Its just a tough business to be in
If you care to read the out look statement, in every SCY annual report since 1991,26 years, you will note they have been cautiously optimistic.
We must keep in mind the share price of SCY and EBO, were very close in, I think, 1995.
So 10,000 SCY then had market value of $5,900.Same today,
while 10,000 EBO is worth $183,000 today.
Now that must focus any long term SCY shareholder's attention.
Actually well positioned - all those new houses Jacinda going to build will need stuff from Smiths City
Gerry Harvey said the best driver of sales was couples separating. ....ended up with 2 lots of most things. Maybe Smiths need more separations to happen.
Noticed an Advert. From Smith City today ( In passing . Not looking ).
78% off RRP.. Really ???
Disc. Not a holder
Oh dear.!!!!!!!!!!!!!!!!!!!!!
http://nzx-prod-s7fsd7f98s.s3-websit...845/277807.pdf
That’s a huge drop in revenues
Not big enough to be ‘big’ and will continue to struggle
Not surprised are we Percy
Alan Martin will be turning in his grave that his beloved Ngauranga store has closed down.
Unfortunately "no surprises there".
The long tail of lease commitments, for underperforming stores does not go away until their leases expire.Three years into a six year lease means another three years of pain.In SCY's case a $4.8mil store lease impairment provision is equal to about three years net profit.A very long time to work for nothing.
Then there will be store closures,with redundancies and other costs.?
Then landlords will find out the true rental value of their properties,knowing full well if Smiths City can not make the site work,who can?.
I see the number of empty retail stores around the country growing quickly over the next couple of years.
Craig Boyce would not be to happy either.
Never sell Colombo Street store.Core................Sold.
Must offer full service.Core....................Alectra sold/closed.
Gerry Harvey,JBHiFi,and I expect Leemings all face huge challenges.The amount of space they require for their stores means large rent commitments,the logistics of freighting large items,staffing,and advertising costs mean very slim margins.
Looking at their business models it is easy to understand why I love LOV.
The exit door for shareholders appears to be closing.
The share price has been in a free-fall for the past year.Each announcement is more bad news. Share price well below both 90 day and 180 day moving average.
Buyers have all but disappeared/.Today only 41,271 shares wanted from 39 cents to 32cents.Anyone selling 50,000 shares would find the exit closed.
Yes and a mate.
I can not see where there is value,ie nta is shown at 65.48 cents.
However, a non profitable retailer with on going staff and lease commitments is worthless.
Maybe some value in their finance company,however with out their retail side providing customers I see little value there either.
No property left,all been sold.
Wonder if they will ‘tactically buyback’ some of their shares now there some ‘short term distortion’ in the share price
Canned the return of capital thing a while ago ......what Ron saw probably no longer exists.
Today's commitment to a living wage is bold.
With a staff of 591 it could be called very bold.
I hope it is not the final nail in their coffin.
I certainly don't see shareholders getting a "living return" any time soon.
Jeez I'm soooo glad to be out of this company. Thanks Percy :)
In the 2½ years I had them I just managed (with dividends included) to break even on exit.
Share price now seems to be in semi free fall. Down another 20% in the last few weeks. Retail sure is a tough business!!
Saddens me watching their demise.
Staff give good honest advice.
Good quality products at fair prices.
Just not enough.
Would love to see them do well,but I just can not see it.
You wrote this 9 months ago:
Tended to focus mine lol. And what you said to me at one of the CHCH meetings too.
I don't follow EBO but the difference would now be even greater.
Yes it is a shame, and I think they will just continue to meander along as a company with the finance side of the business propping up the rest.
I rarely go into Smith's City, but when I do (especially the Colombo Street store) there just never seems to be many customers there, but always lots of staff. Whereas places like Harvey Norman are always busy and the stores seen much more vibrant.
Percy ...you Mr Kerr ...or did you just tell him all this and that he had to get the house in order
http://nzx-prod-s7fsd7f98s.s3-websit...412/286152.pdf
Steve’s more of an IT guy but he’s probably right.
SCY will never be cheap as
For education purposes always worth watch train wrecks .... even if it’s only to recognise the next one when it comes along
Steve Biddle (@stevebiddle)
5/09/18, 4:38 PM
Smiths City will be like Dick Smith by early 2019. History. Can't turn around a failing business that doesn't even know what it wants to be or who it's target customers are. stuff.co.nz/business/10682…
Yes the English execs have a poor record here and in Australia .Great at talking the talk,but can not walk the walk.
The South Africans are performers.
Store staff engaging the customer is difficult, when the customer does not come into the store.
Looking for a bar fridge for over Xmas.
Google. Leemings ………….45 litre...$249 and $269.
…………..Mitre 10...…….....112litre.$299.
…………..Harvey Norman...115 litre.$295...50 litre.$249.
…………..Smiths City...…...Haier 50 litre.$349...75 litre.$319
…………...Warehouse...…….Daewoo.140 litre.$239.
Yes you have guessed right.Looks as though Warehouse will be engaging me as a customer.
The battle continues and does not get any easier.
I see your morbid fascination with this stock continues :). I had a good read of the announcement and a glance at the financials. Was initially tempted to get in at 27.5 (I exited a while back in the 60's and high 50's) but after glancing the financial realised I have plenty of time to get back in if I want to and may not need to at all.
Hi Percy. Probably a stupid question but i'll try anyway.
As of 1st July 2019 SCY had a tangible asset backing of .77 per share, and is currently trading for .25 per share. The top 3 shareholders own a controlling stake in the company, so what is stopping them buying up another 25% if the sp continues downhill (or talking to minor shareholders) and liquidating the company for an approximate 300% return (which they have no chance of getting if they continue to hold)?
Now down to 67 cents.I very much doubt there is any realisable value.Value has been in Smiths Finance.However it relies on retail to originate deals.Without retail they have no originators.Smiths no longer own the Colombo Street store property.
Gerald .Welcome to sharetrader.
Hey percy ...hope history not repeating itself
http://nzx-prod-s7fsd7f98s.s3-websit...819/319821.pdf
Someone on reddit shared that the CEO sent a thank you email to employees today for their "resilience and continuing loyalty" and that he can't tell them more about the ASB discussion until the shareholders are informed. :ohmy:
Good ol Smith’s City
Putting up a good fight for survival and refusing to put up the white flag
https://quoteapi.com/resources/da986...w_Covid-19.pdf
PS: NTA is 77 cents I believe so no worries but ... the company recognises the current capital structure is not sustainable given the outlook
Strong loyal customer base in the South Island, I believe?
Expansion in recent years has obviously not worked for them so back to basics. Scale back to their loyal base and they should survive.
Only time I ever bought something from them was Boxing Day 2019 - and will never again! The customer service and follow up were abysmal.
They advertised they would beat anyone else for price or match them. Well, so happened I wanted a new wall oven and rangehood which they had in stock, and other outlets had sold out that day. I pointed out that their oven was $150 more expensive than Noel Leeming - which they checked and confirmed as correct.
But no, they will not match as they had the item in stock and the others do not! WTF! So I told them to forget it. Ordered from Noel Leeming instead.
Gets worse, believe it or not!
I ordered the rangehood as their price was same as other outlets and they had stock in another branch. Pick up in 2 days, they said.
Well, I went to pick up 2 days later and get this, after mucking around trying to locate my order, they found that they had ordered the wrong item from the other SCY store! So it had to be another 2 days.
Meanwhile, Noel Leeming has delivered the rangehood that very same day.
If I had SCY shares, I certainly would have sold them after that most unsatisfying shopping experience with them.
NTA at 77 cents,????????????????????????????.What tangible assets???????????? Stock at firesale prices.????????????
The current capital structure is not sustainable given the outlook.Agreed.
The BUSINESS MODEL is not sustainable either.
Pigs could fly before Landlords will agree to rent relief.They will only focus their attention when talking to receivers.
They still putting up a good fight percy
Talk of strategic investors - that doesn’t sound like good news for existing shareholders does it.
Hope nobody has been seduced by the 77 cents NTA
http://nzx-prod-s7fsd7f98s.s3-websit...684/322004.pdf
I am sorry to say I do not think "talking to landlords" will be constructive,particularly when taking of store closures.Staff have never been "over paid",so little, or no savings there,as each store already has few staff..A good number of years ago I did suggest they put in cafes in their larger stores,but that idea was dismissed.I also felt they should have "franchised" their operations ie like Harvey Norman,but that also was very much against directors/management's vision.
Landlords only focus their attention talking to receivers or liquidators.
In my opinion the business model is past its best by date.
Going forward their finance company does not have a future,as they have relied on Smiths retail for clients.
There was an old saying in retail "your business is only as good as your lease".
I doubt there are few retailers today with good leases.
Any guesses on what could follow out of this -
https://www.nzx.com/announcements/352684
"Smiths City restructuring process to begin"
Cropping some stores & staff seems to be being hinted at
Perhaps a Cap Raise of sorts -- but then the SP is well south of the equator
Perhaps hock off all or part of the Finance Division ?
Speaking of munted, we bought some outdoor furniture from Smiths City that was munted in less than a year.
Good to deal with.....could get a refund, or hold a credit and wait until new season stuff comes in.
No surprises, we took the refund......otherwise we would have been the ones that were munted.
PS - munted is a such great word! :p
As a restructuring etc etc seems to be the prescribed SCY mode forward, it seems like the major SCY shareholders & their mates may have been a collective 'No want to know' .. but not surprising - as they probably haven't seen sniff of dividend recently, while all things SP continued sliding southwards ..
Good to know the refund process is solid. Went to buy a phone a few days ago after being shown on the website that there were 4 in stock. Wanted to get hold of customer service before purchasing to confirm the location, but waited 90 mins with no answer. You don't get to see where the stock is located on the website, a bit strange. Ended up just buying anyway online. No indication of when it would be ready so have to go down to a physical store to ask.
Turned out they were all display models, luckily one was in Auckland. But THEN, turns out that model was a demo and unable to be sold. Had to can it and get a refund.
Contrast to Noel Leeming yesterday -- phone picked up immediately. She checks the stock availability to be super sure. Hop straight into car and it's in my hand as I arrive 20 mins later. Hmm...
I've heard of another mate have a similar experience with SCY. I would expect they have lost a few Level 3 sales as the online process seems a bit unco-ordinated.
Marlborough rate payers might have a big empty building soon ....or heavily subsidising a distressed tenant
https://www.stuff.co.nz/national/pol...city-uncertain
Management is failing this company. I have been trying to buy goods from them, but website is inadequate the wait time to answer the phone is over an hour at times. Apparently they only have five people answering emails. They are swamped with people trying to buy, but have not employed enough people to answer the phones or emails. A tinpot takeaway can organise a click and collect and are open for business. This large retailer is obstructionist in almost every way. From what I have heard staff at click and collect are only working a few days a week in many stores, if at all. Staff have been told there are job losses coming, yet tens of millions of dollars of orders are going to waste due to inadequate staffing. If you are "lucky" enough to give them your retail dollar good luck collecting it, even if it is your local store.
They need only look at their Logo - that should give them an indication of where they're going wrong
If they have problems making things go well easier (as the track record suggests is the case), then Management & Directors should step aside to allow new more energised blood to do what they have failed to..
The current mob staying stuck to their seats will probably (on recent year's performances) only dig the hole bigger & likely in the process put the whole shooting box into Receivership or worse. Furniture & Appliances is a competitive game & requires talented achievers who can & will perform, not an entrenched bunch of bods who can't recognise potential grief & disaster sneaking around the corner, whether brought on them by their own making or otherwise..
It looks like the Sydneysiders are steering a wide berth
Why did this one attract Brierley's interest - any guesses ?
The current mob not many years ago replaced long serving Chairman Craig Boyce,director John Dobson and CEO Rick Hellings.
I expect they were Brierley and Co appointments.
Brierley has at times seen hidden value in companies.Was often right but destroyed BIL,IEL and others when he was wrong.
Smiths City names 'turnaround specialist' Roy Campbell as CEO - April 2015
https://www.nbr.co.nz/article/smiths...-ceo-bd-171399
Trading Halt @ 1.22 pm today
https://www.nzx.com/announcements/353206
The trading halt has been put in place pending the release of an announcement by the company
While the sale gives the Smiths City business a strong foundation on which to build, Directors believe Smiths City’s ordinary shares will retain no value following the sale.
Sold ..or given away
No value remaining for shareholders ...warned of that a while ago
Never never fall in love with a share trading at a big discount to NTA ...wasn’t Smiths reported NTA 77 cents. Hope none of you were tempted ...PERCY and me tried to warn you off.
http://nzx-prod-s7fsd7f98s.s3-websit...225/322677.pdf