November retail data out this week (Stats NZ). Could make interesting reading.
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November retail data out this week (Stats NZ). Could make interesting reading.
Placebo - its not so much the topline figure that matters (even Postie+ sales are up)but the lack of sustainable margin that many are making on what they do sell
However any weakness in the top line figure only adds to their woes ..... as the expense base seems remains ... and keeps on going up
On the surface those PPG numbers look nasty. Who would pick similar margin contraction for WHS too on that basis? Some ugly numbers may be in the offering soon I think.
Somebody wants some....
A few million dollars worth of shares has changed hands to a unlimited bidder a $3.50. That's probably the only thing propping up the share price at the moment.
I'd say it is looking good to reach some new lows soon.
Could some one have shorted a while back and be covering themselves ?
Quote:
quote:
WHS
19/01/2005
FORECAST
REL: 0837 HRS The Warehouse Group Limited
FORECAST: WHS: Trading and Earnings Update
19th January 2005
The Warehouse Group Limited
Trading and Earnings Update
Red Sheds
The directors of The Warehouse Group Limited (the "Group") report that sales
in The Warehouse NZ (the "Red Sheds") during November and December 2004 were
2.8% ahead of the same period last year with same store sales down 1.3%.
Disappointing performance in seasonal categories such as apparel, sporting
goods, toys and gardening have impacted sales in the Red Sheds. Partially
offsetting this, the Red Sheds has experienced an uplift in sales in the
technology and entertainment sector, albeit these are lower margin
categories. The change in sales mix and higher fixed costs have resulted in
an overall contraction of operating margins in the period.
"There have been a lot of conflicting views about how retailers have
performed over Christmas. Until we can overlay our sales numbers with
industry data we are not in a position to comment meaningfully on our
relative performance over the Christmas trading period," said Ian Morrice,
Group CEO of The Warehouse Group Limited.
Group
While the first half trading period has yet to close, the Group expects to
report a first half Net Profit After Tax ("NPAT") of between $50m to $54m, or
3%-10% lower than that achieved in the previous corresponding period. Full
details of The Warehouse Group Limited second quarter sales and financial
results for the first half ended 30th January 2005 will be released on
Monday, 14th March 2005.
The Group expects full year earnings to be between $66m to $71m or 8% to 16%
ahead of that achieved in the 2003/04 financial year.
The directors confirm that the Yellow Sheds remains on target for a
substantial reduction in operating losses for the full 2004/05 financial
year.
The above guidance assumes no change in current trading conditions for the
balance of the financial year.
ENDS
End CA:00110480 For:WHS Type:FORECAST Time:2005-01-19:08:37:11
What a surprise ... the Red Sheds are the REAL problem with WHS
All that extra footprint and sales up a miserable few per cent .... and that margin contraction
So after seeing the Red Sheds profitability decline in the 2nd half of the last financial year another decline in profitability in this half year.
Anticipated eps this year about 20 cents ... heck that is what last years dividend was .... and they have over 33 cents of capex planned this year
What gives?
The dividend!Quote:
quote:Originally posted by winner69
...What gives?
That announcement was a shocker really
Not just for the lack of news it contained but the vagueness of the whole thing.
No mention of Stationery so presume doing OK ... I doubt it.
Everybody knew Aust losses were going to be smaller but at least we know the reduction is going to be substantial .... but how close to breakeven ... some time I feel.
Red Sheds are a real problem ... think about it .... overall NPAT down (lets take their best view) $1M ...... of which say a $10M improvement in Australia ........ leaves NZ operations NPAT declining by $9M
Announcement says the better the turnaround in Aust the worse the performance in NZ ... start fixing one and the other goes to the pack
Not good for shareholders ... maybe that Elliot Wave will see the shareprice down to 285 as posted by someone earlier
Here comes $3.00. OUCH !
Again, going to the WHS stores and noticed that nothing has changed on the ground floor.
Try here comes $2.00 OUCH
The trend is your friend and there's only one trend going on here
The announcement should not be a surprise. House prices have been very strong for 2 or 3 years, we have had a very bullish sharemarket for 2 years, and unemployment is less than 4% (economists consider 4% unemployment as full employment).
People are feeling wealthy (whether they are actually wealthier is a moot point) so they don't feel they have to buy the cheapest of the cheap.
The other revolution taking place is that NZers are beginning to appreciate the concept of 'value'. Previously people thought that value was buying the cheapest they possibly could; 'value for money' is a completely different concept. Instead of shopping at WHS, they are shopping at places like Farmers.
As an aside, have you ever seen what happens to the main shopping street in a small provincial town, in NZ, when The Warehouse arrives in town. It ain't nice.
Right now I'd rather be a JE Thomas & Co shareholder than a WHS shareholder!!
The downtrend to continue for some time yet.
JE Thomas & Co, yeah im sure theyre doing pretty damn well.... you a marlborough man skytower or know someone that works there?
as for whs, wouldnt touch it .... look at the trend, you would have to be near on crazy.
Floyd lets just say I come from the best part of New Zealand ;)
And another year or two of a bull market (prolly unlikely) and that holiday house in Lochmara Bay will be more of a reality rather than the present dream.
Christmas at Puna Cove this year was bliss (after a stressful year at work).
then that makes two of us sky tower, ahhh yes that lochmara bay bach dream....ive got it too....lol
wanna go halves? the dream will be a become a reality twice as fast that way - six months of the year each
They could be worth buying as a recovery stock once they hit $2.50...and they sell off the Silly Sollys and Clints Crazy Bargain stores in Oz (unsuitable sizes, designs and unWarehouse type locations)....and after the NZ economy has gone through its business cycle over the next two years and NZ retail spending recovers.....
I agree with The Major (surprisingly). I was kidding when I said $2.00. At some level it will find support and if I was a betting man I'd say something like $2.50. They will eventually sort out Aussie, the NZ business cycle will move in its normal cycle - and there will always be enough New Zealanders who dont understand the concept of 'value' for money ( a portion of the population will always shop at the Red Sheds...........so they find support somewhere - but the price will fall some way yet
The Red sheds - appalling service from totally uninterested staff, store layouts a shambles, cheap crappy products.
The Blue sheds - an utter disgrace. Staff haven't the faintest idea what they're about when it comes to high tech products (like an ink cartridge for a printer - lol).
I think the Warehouse is finally being found out by more and more discerning shoppers.
You only find me in one of their shops if I'm really desperate to buy something that will last five minutes, have hours to waste in one of their interminable queues, and am in the mood to tolerate the insolent shoulder shrugging from the gum chewing turkeys manning the checkouts.
Hmmm - is this too harsh? No.
No not too harsh Pierre - pretty much right on the button actually
Thank goodness for the strong NZ dollar.
The business would be a complete mess if the kiwi was trading at its long term average.
short term reversal (see candle sticks, stochastics - MACD crossover for confirmation), look to pick up 5-20 cents
as for the actual business, well i was gunna buy a cheap stereo from them yesterday but decided to buy a 300 from noel lemming due to it being far superior and more likely to last a few years - good times=bad times for whs?
Surprise to see WHS price holding up well after another profit downgrade. Whats up?
I have been to The Warehouse once in the past 12 months. Was looking for an ironing board cover. Given the product involved I thought quality wasnt an important issue so went to WHS to get it as cheap as possible.
So Ive spent $24.95 at the Albany Red Shed in 12 months.
Wouldn't consider making an important purchase there [:p]
So the real question is why is the WHS shareprice holding up so well against the force of gravity?
Who's their broker, what's he doing....are the institutions buying to protect their own backsides.....have the chartists discovered some silly pattern to keep it up...
In the end gravity prevails....
WHS is in the top 15, in the general public's mind it's a quasi blue chip, if the price drops then..."maybe it's a bargain"
Story says that ' after a (Millers) restructuring would occur in advance of possible moves on rivals The Reject Shop or even New Zealand's The Warehouse Group.'
and they reckon that 'The two (WHS and MRL)had held talks about a merger mid-last year as losses mounted but those discussions went nowhere and Warehouse redoubled its commitment to turn around the Australian operation. It is unclear whether Warehouse has been circling Miller's since those talks'
Yesterday WHS denied they were interested in MRL
Still believe, irrespective of any rationalisation, WHS are doomed in Australia. That middle ground is a hard place to be ... positioned below the likes of Target etc with thier huge resource and above the smaller more nimble 2 dollar shop look alikes
Whatever takeover and rationalisation speculation of Aussie things will keep the WHS shareprice up for a while
But isn't the real real problem declining profits in the Red Sheds .. far more important issue than Australia
http://www.theaustralian.news.com.au...%5E643,00.html
Meanwhile....
WHS has crept back up through $4. Well done to those who bought in at around $3.50. The question going forward is, is this a recovery with any momentum, or a dead cat bounce?
The share price performance of this puppy defies logic so who knows?
Maybe Australian trading is better than expected? I'd be surprised if NZ provided any growth.
I wasn't keen at $3.50 and still not at $4.00.
oh oh oh chart pleaseQuote:
quote:Originally posted by Placebo
Meanwhile....
WHS has crept back up through $4. Well done to those who bought in at around $3.50. The question going forward is, is this a recovery with any momentum, or a dead cat bounce?
lets see if the ta's have a signal in their crystal ball(s)!!!!
volumes up...price up...is there a buy signal just around the corner.
ta's ......open ya trousers and have a look (no pictures please)
Closed above the 100 day moving average - I know it is a pretty basic indicator, but still one I always look at first.
Wouls be good to see a good chart..... from a knowledgeable TA poster....
Hate the stores but it certainly looks like it is nearing a buy, if it is not one already.
THE KING says for information only, had a visit to Warehouse Gosford. NSW. its located in an old Coles Building in main street that mean nothing because its not in a shopping mall 10 staff pointed right away they where moving across the road and into a Mall in May,, the shop was stocked to the gunnels but above K Mart prices but very little customers this $4 price looks suspect as AUS to my mind is not making money.. [^]
FB,
WHS has still not broken above its 2 year confirmed long-term trendline. It is still in a long-term downtrend, though it has been in a "medium-term" uptrend for about 2 months. It is, of course, possible to trade these secondary trends. I have plotted the trendlines and their associated Buy signals in light blue. Such signals are quite unsuitable for the "Buy and Hold" brigade - you can see that you would have lost money buying at these points and simply holding. You are also attempting to trade counter-trend. (Going Long on secondary trends, when the primary trend is down). This can be profitable, but you are fighting the market. These signals are quite suitable for short-term trading, though. You need to have discipline and a system that works - and I don't mean just a trailing stop or somesuch.
When we look at the On Balance Volume plot, we can see that there is no unequivocal evidence of accumulation as yet. The OBV is still in a downtrend and still below its trendline. Notice, though, the high volume "Up" day of 27/1/05 (green arrow). WHS has never had such a high volume Up day before. Ever. This must be considered to be Bullish. In my opinion, WHS has bottomed out. I must point out that I thought the same when such good support appeared at around $4.00, but it went still lower, so what do I know?
In short, good for a short-term punt, but not for conservative buyers as yet.
http://img.photobucket.com/albums/v4...56/WHSf001.gif
An excellent posting made while I was off getting flounders to put on the BBQ for tea...
Thanks.....
THE KING says The Head man sacks himself a couple of hours ago and not a word from the MOB.. [^][^][^]
I note the appointment of two UK executives into key positions. Heh. Step 1, appoint your mates as lieutenants.
Well the market likes them at the moment. Thoughts of potential 10% cost reductions must be prevailing? If they acheive this it clearly serves to illustrate the differing qualities of their Australian and New Zealand businesses.
The share price is now up over 22% since their earlier lows. They also appear to have broken the long term downtrend line in Phaedrus' chart above. I'm happy to miss out on this rise. Still too many fundamentals out of wack.
-----------------------------------------
WHS
23/02/2005
DIRECTOR
REL: 1001 HRS The Warehouse Group Limited
DIRECTOR: WHS: Resignation of founding director, key appointments made
THE WAREHOUSE GROUP LIMITED
ANNOUNCES THE RESIGNATION OF A FOUNDING DIRECTOR
KEY APPOINTMENTS MADE
Auckland, 23rd February 2005 - The board of The Warehouse Group Limited has
accepted the resignation of Glen Inger as an executive director following a
highly successful 17 year career with the company, effective 6th May 2005.
Mr Inger has decided to step down from his board and senior management roles
with The Warehouse Group Limited to devote more time to his family and his
many and varied business interests, including farming and forestry.
-------------------------------------
One of the best things that could have happened to whomever is (still) a WHS shareholder.
Sure you are not born a CYNIC, Rocking?;)Quote:
quote:Originally posted by rocking
.. and other, less doomed interests.Quote:
quote:including farming and forestry.
mmmm very much in the food area...safeways and sainburys.....i like the cut of that type of jib.....how well did rbc do out of the petrol stations (ie challenging the big boys)???????Quote:
quote:Originally posted by stephen
I note the appointment of two UK executives into key positions. Heh. Step 1, appoint your mates as lieutenants.
Sub $4.00 WHS finding it hard to keep above $4.00!!!!
The numbers from this analysis encapsulates a 6 year period, shorter than my preferred 7 year measurement but the data I kept for 1998 was substandard to base this analysis on. I'm sure I won't offend anyone with my views...
Business Tenets:
Is the business simple and understandable?
Yes. They sell General Merchandise and Office Supplies through Bulk Retail format in New Zealand The Australian operation is a bit more complex though, a somewhat mixed up hybrid Bulk Retail / Deep Discount format.
Does the business have a consistent operating history?
The original “Red Sheds” have been the traditional drivers of the business but profitability stalled and inconveniently declined just as the Yellow sheds started to reduce their high losses. Returns on the core Red Shed operation in New Zealand are still high but the trends have been soft. The underlying strength of the NZ business is still apparent. Give it a weak Yes.
Favourable Long term prospects?
Yes. They are the dominant General Retailer in New Zealand and market share counts for a lot. However Australia was a turnaround the moment they bought. Prospects here are far from certain.
Management Tenets
Is Management Rational?
WHS has been a company in growth mode for 20 years. Often it takes a growth company a long time to get over the fact that they've reached a plateau in the “S” curve, resulting in a period, sometimes years, of over-investment. WHS has proved no exception. They have continued to spend capital like a teenager and this fat has flowed to the hips, not to shareholders, as operations have become somewhat pear shaped.
If you are a company with problems, particularly issues with profitability and Capital commitments does it make sense to borrow your dividends from the bank?
They also say the right things like “we'll manage Capex more closely” then spend the greatest amount the company has ever incurred ($120m 2004).
Rational has left the building – No.
Is Management candid with shareholders?
No. Small changes were promised at the Australian operations at the time of acquisition but it soon became obvious the plan was to turn them into the Warehouse Australia. Had shareholders been aware of this the risks and costs would have been factored into the share price a lot earlier. When problems arose they took a long time to filter to the market. Nobody seemed willing to face up. Also, see Capex comments above.
Does management resist the institutional imperative?
Management paid top dollar for two separate Australian deep discount retailers with small format stores in the hope of turning them into the Warehouse NZ success. Not only was this strategy hopelessly flawed and expensive, it diverted management attention from the core Red Sheds and the embryonic Blue Sheds. Results at the core business are now suffering. After problems became apparent a successful turnaround or exit strategy obviously proved difficult to execute. Despite the problems, management still failed to reign in Capex and consolidate. Emphatic No.
Financial Tenets:
Return on Equity
ROE calculated NPAT on end of year shareholders funds...
1999 30.39%
2000 41.19%
2001 32.04%
2002 31.66%
2003 23.86%
2004 17.64%
Note: These numbers a more Return on Net Tangible Assets than equity as I ignore goodwill in my calculations.
What can you say? The trend is not inspiring. A five year trend in one direction. 2005 is destined to be worse. One argument presented as to why WHS have value is that the loss making Australian operations can be sold or closed to restore some profitability. While this is true, its unlikely anyone would want them in their current state and redundancies, lease commitments and other liquidation costs would likely eat more than any remaining residual value. To restore value WHS is practically committed to turning around the Australian operation whether they want to or not. Irrespective of the ultimate success of this strategy,
Great analysis Halebop - keep it up!Quote:
quote:Originally posted by Halebop
I'm sure I won't offend anyone with my views...
I am a relatively new investor in the Warehouse, attracted by the first severe market slump after nearly a decade of share price outperformance.
It is very easy to design a mathematical model that gives some fantastic future valuation for WHS, based on a good management record over many years (before the last couple at least). Ultimately though, you have to sit back from your mathematical model and ask yourself:
"Is what I am projecting realistic?"
If the answer is 'no' then it doesn't matter how sophisticated your model is. The law of 'GIGO' (Garbage In Garbage Out) applies.
And so it has been over the last couple of years with 'The Warehouse'.
It is interesting to compare this investment with my other NZ retail investment - Restaurant Brands.
On a business level I would say the retail management talent in 'The Warehouse' knocks the socks off anything seen in Restaurant Brands. WHS has a successful record of growth over many years whereas RBD has a successful record of stagnation over the same time period. WHS has in the past shown how to convert retained shareholder earnings into real growth, whereas all the growth attempted by RBD management has been marginal at best.
To some extent this is still reflected in the respective share prices with WHS trading on a P/E of 21 and RBD trading on RBD on a P/E of 14 based on FY2004 earnings. IMO, and despite the latest problems WHS is the better retailer by a first round technical knock out. It isn't really even a contest.
Put my investors hat on though, and things change.
WHS is going to have to work very hard this year to justify its share price. For although the price is hovering around a multi year low in dollar terms , in P/E terms it is still high. RBD, OTOH doesn't really have to do anything but bumble along and avoid any (further) footshots to justify the share price being exactly where it is.
For the medium term, I like both of these companies which is why I am still in both. In the short term, however, I have this feeling that RBD is more likely to tread water than WHS is likely to get significantly better. For me, that is enough to make RBD clearly the better shorter term *investment* performer of the two.
SNOOPY
THE KING says Good thinking Snoopy.. [^]
I fail to understand anyone having shares in a company in trouble. Both WHS and RBD are in trouble why bother with reasons or waste your time wondering why or how they might get out of it STICK TO WINNERS. When they start losing, get out, and look for a winner. LOSERS ARE FOR LOSERS, AND WINNERS ARE FOR WINNERS.
Any one that thinks different is a loser. The whole retail game is in general to competetive, BGR with never ending sales wont go to far unless they change direction. The warehouse needs to get out of australia, and RBD needs to get its act going, infact the worst of the three is a hard one to pick. I will venture the opinion that RBD is the worst, followed by WHS and BGR third. macdunk
Who ran Forth for the Double..;)
Too simplistic Dunc. What about Hallensteins recently. Slogans are for losers methinks, investors look at value.
Define company in trouble.
Disc: No WHS.
GRYFFYN, It is simplistic Muck about with losers, and you become one.
Who cares what the company is worth if the promises ammount to nothing, and the profit drops. Stick to companies on uptrends with increasing profits. SNOOPY has done great analysis on RBD over the years which ammounted to nothing, with the share price dropping by half, in a bull run. Who cares about a divi when you watch your initial investment half in value. Stick on winning sectors first, winning companies second,and get the hell out of there at the drop of a hat. Never mind all the crap about working out what the company is worth, talk to the tea lady she will give out more usefull information than the accountant. Good news coming up buy. Bad news coming up sell very simple. MACDUNK
PS the tea lady has all the news
WHS (and CEN) seem to have dived at the end of the day.
THE KING says WHS is a great stock by the way it sticks, the saying goes for MORTINE spray is, " It keeps ON sticking ON " ..[^]
Sid's brother died and Sid came out of the bush for the funeral. While at the funeral he asked his sharebroker how his WHS shares were going ... must be heading back to $10 by now he asked.Quote:
quote:Originally posted by winner69
Amazing that WHS price is still the same as it was 5 years ago
Imagine some poor fella called Sid who went bush for 5 years in November 1999 happy that his WHS shares were $3.80 and came out today and found they were still about $3.80.
Sid asked his sharebroker what has happened to the WHS over the last 5 years - his sharebroker told him
**** Store numbers have increased from 87 to 351
**** Sales are nearly 2 1/2 times what they were - increased from $0.9 billion to $2.2 billion
**** Net assets have more than doubled - from $170M to $357M
**** Now have 15,877 empoyees - 10.262 more than 5 years ago
**** Spent $500M on capital expenditure
So Sid replies 'Thats impressive, they must be making heaps now'
Oh no his sharebroker told Sid - their profit has only increased from $54M to $61M in those five years ... and the earnings per share has gone from 19cents to 20 cents.
Poor Sid - he's incredulous. All that investment and all those extra staff and they are only making the same as they were 5 years ago.
Who does he blame? He can't blame investor sentiment because WHS is still trading at 20X earnings - it hasn't been rerated downward. Sid says to himself that is just as well as if they had been rerated down they might have only been worth $2-$3. At least he still has his capital and he has had a few piddly dividends put in his bank account but inflation has taken care of those.
Sid asks his sharebroker 'Have the WHS really stuffed up somewhere along the way?'
Sid's sharebroker tells him 'No not really. They are investing for the future and all should be right in few years and your WHS shares should be worth $10 each in 5 years'
Sid thinks thats good and decides going bush for another 5 years might be the caper
What will Sid's sharebroker tell Sid when he comes back to civilisation in 5 years time?
No the sharebroker told Sid .. they are actually worth about 20% less than when you came out of the bush last November
But don't fret said the sharebroker. They are changing the way they do business in NZ, going to go into groceries and think that Woolworths coming into NZ could be good for everybody. The shareprice will go back up to the old heights of old ... it just keep keep going down down down ....
And Sid has gone back to the bush happy as Larry his nest egg is going to grow ....
I see in the Herald this morning that Smith Barney have reduced WHS from a "Hold" to a "Sell". That's a Sell at around $3.11 - the lowest this stock has been for over 6 years. These guys are good!
Remember, it's time in the market that counts, not timing the market! Baloney.
Those that think you can't time the market might like to take a look at this post from July 2002.
http://www.sharechat.co.nz/archives/...msg00272.shtml
no impact on today's trading so far. either all the recent selling was those in the know, or remaining holders don't read.
Good point PhaedrusQuote:
quote:Originally posted by Phaedrus
.... Remember, it's time in the market that counts, not timing the market! Baloney.
Todays price is where it was back last century - looks like we need to go back to December 1998 when it was this low.
So anybody who has bought and sat on WHS since then is sitting on a capital loss ... mind you they have had some dividends in the meantime but 6-7 years worth of inflation has probably diluted those.
I then wonder how many of these investors are still sitting on their WHS invetment because they refuse to turn their paper loss into reality. Surely you can lose money on holding WHS stock can you?There has to be a turn around, doesn't there?
Isn't that how the buy and hold brigade think.
W69, you and C9 been on to it a long time
tell that to guys like Bungo66
$1.3b off the market cap and still the head remains in the sand.
150% later from $3.15 and some of these ostriches will get their money back:D
150% to break even! poor WHS divs have paid for what?
PPG:DQuote:
quote:Originally posted by THE KING
Who ran Forth for the Double..;)
Note Millers are going to writeoff $25M of stock ... probably going to have lots of sales by rhe sound of it
And close 80 stores and make a provision of $30M to cover this
And the discount variety business is deemed to be worthless and and write down the $31M they had it on the books at
Hasn't the WHS done well in stuffing this business in a big way
And of course WHS aren't affected by the actions they have taken to stuff the opposition .. aren't they doing well in Australia?
Hope making big writedowns isn't catchy
winner69 do you hold this stock.. [8D]
WHS? maybe at $2 sometimeQuote:
quote:Originally posted by BRICKS
winner69 do you hold this stock.. [8D]
WHS could well be the next Levene. It could disappear completely. I hope it doesn't of course, but...
IMO Cap raises a very real possibility. It is difficult to see how the WHS will be able to compete as Foodstuffs and P.E. expand store formats into hyper markets. WOW taking out P.E. will only hasten this transition. As a takeover target it's certainly attractive given its footprint; but current prices are still a fair way above NTA of $1.20 yet [:0];)
CAPITALIST, LEVENES was a well run operation that was sold off, so that the man could retire. The bunch of wallies that bought it ran it into the ground. The warehouse started off being a great company, until they had visions of grandure expanding overseas and taking Australia by storm. The company will go under if they dont change direction. macdunk
I don't think the govt will save WHS Belgarion...Perhaps I should say buy WHS?? Just in case eh?
Just kidding.
I am sure that the government would step in to save this national icon and then flog it off to some merchant bankers a few years down the road.
Not kidding
National icon? You must be joking. Only a third world or communist country would regard a bargain basement discount retailer as a national icon. Mind you, I haven't been to NZ lately.Quote:
quote:Originally posted by Paper Tiger
I am sure that the government would step in to save this national icon and then flog it off to some merchant bankers a few years down the road.
Not kidding
WHS may have to swallow hard, like Air NZ did with Ansett, and walk away from their Aussie loss making investment to focus on their core profit making stores in NZ. Watch the NZX announcements...
I know ya love it, my poor lonely martyrQuote:
quote:Originally posted by belgarion
p.s. Watch out W69 ... If you say $2.00 the rabid mongrel will start posting more rubbish.
WHS at $3.35 has a long way to go before Belgs "easily attainable" $2...and + 2.45% today
time as usual will tell, nothing more to say so....
no need to get excited about being wrong again for the 50th time airbusboy
watch the US and DOW if OIL rises!:D
((([^])))
Millers writing down the value of their discount variety division to zero indicates that getting rid of it is the way to go ... ie divesting it
Both WHS and Millers have been unable to compete in this market ... you only need to look at WHS positioning map they are so proud of to see why.
Other side of tasman view is that WHS will exit sometime ... image if dog took over dog
The following appeared in todays "The Australian"
Buyers eye discount chains
Katherine Jimenez and Michael West
June 27, 2005
RETAIL rivals Warehouse Group and Miller's Retail are holding talks about a potential $300 million sale of their combined Australian discount store chains.
About four private equity firms are circling the discount businesses of Warehouse, owner of about 130 The Warehouse outlets in the eastern states, and Miller's, owner of more than 300 Go-Lo and Crazy Clark's outlets.
As well, New Zealand-based Warehouse is believed to have approached Miller's with a proposal for the two companies to package their discount variety operations in Australia for a single trade sale.
Warehouse is believed to have started talks with four private equity firms - Allco Equity Partners, Castle Harlan Australian Mezzanine Partners, Archer Capital and Catalyst - to buy the merged business.
Analysts believe the network of the more than 400 stores could be about $300 million. One prospective buyer said benefits from the deal could be close to $50 million in terms of earnings before interest, tax, depreciation and amortisation.
Warehouse, whose board is believed to have considered the proposal at a meeting last Friday, has appointed investment bank Credit Suisse First Boston to pursue the deal on its behalf.
It is believed Miller's has not yet received a formal offer for its discounting business.
Miller's, which also owns fashion chains such as Katies, Crossroads and 1626, is close to finalising an emergency strategic review that could recommend the sale of the ailing discount business.
Miller's has been hit by three profit downgrades in the past 12 months. The most recent involved a number of one-off write-downs associated with excess inventory, 80 store closures and slashing the carrying value of the discount business from $31 million to zero.
Miller's chairman Geoff Levy declined to comment on any of the proposals for the discount business and said the company had provided no advisory mandate for a sale.
"A number of things are being looked at," Mr Levy said. "We've had a smorgasbord of proposals put to us by private equity firms."
The Reject Shop, with more than 100 discount stores in Australia, has apparently approached Miller's about some of its state store networks.
A merger of Warehouse Australia and Miller's discount variety businesses would reduce the number of players in the crowded and highly competitive $8 billion sector.
ABN AMRO estimates that Miller's and Warehouse, whose Australian operations are staging a significant profit recovery, each control about 7 per cent of the discount department store market.
The combined business, which would generate a combined income of about $1.3 billion and control about 400 stores, would be a more powerful force against retail giants Coles Myer and Woolworths.
Coles Myer, owner of Kmart and Target, has about 45 per cent of the discount market, with Woolworths' Big W holding 31 per cent. The Reject Shop is estimated to have a share of about 2 per cent.
Warehouse could not be reached for comment
Did\ the trick though, plus the 'continuous disclosure' announcement - up 28c today!!
FINISH $3.68!!!Quote:
quote:Originally posted by belgarion June 8th
You're right Cap ...
Nope, even kidding, I wouldn't suggest anyone buy WHS just yet ... although the dog seemed to think it was okay buying at $3.00 ... mind you he didn't admit to buying any tho. :)
Why take the stress ... Wait for the news ... [}:)]
UP 20% IN LESS THAN 3 WEEKS
Begarion must be the biggest loser!!!
stockcalls that is;)
:D:D:D:Dlovin it[^]
Great stuff ... at least WHS not contemplating buying another stable of dogs
Finally admitting defeat is good news
If Millers and WHS are going to share the $300M some hefty writedown for WHS coming up. Last WHS accounts showed Aussie assets about $240M ... lets say they get $100M of the $300M thats $140M to be written off.
But then thats only a few years losses anyway and as many have said WHS is worth more without Aussie.
Only have to sort out NZ now but those profits are going backwards as well.
Look to 700 sometime next year K9?
the combined outlets are only worth 300M wouldn't give WHS much
Has WHS commented on these rumors?
Hi Caesius
WHS's release to the ASX about "The Australian" article can be found at this link ..
http://www.asx.com.au//asxpdf/200506...gq4wwddbyb.pdf
Further article in "The Australian" today
Warehouse shops for Miller's
Katherine Jimenez
June 28, 2005
THE $8 billion Australian discount department store market is entering a period of consolidation, as New Zealand's The Warehouse Group yesterday confirmed talks with rival Miller's Retail.
It is understood the Warehouse board met last Friday to discuss a proposal that would see Warehouse merge its Australian operations with Miller's discount variety business. The packaged group would then be on-sold for about $300 million, with four private equity firms circling the business.
Responding to an article in The Australian yesterday, Warehouse confirmed it was in talks with Miller's and others and that it was reviewing its loss-making Australian operations.
Warehouse chief executive Ian Morrice said: "If you look at the structure of the discount sector in Australia, further consolidation could be an option at this point. It's very early days and we are looking at it."
He declined to comment on the options being considered.
Investors cheered confirmation of the sale talks, which, if successful, would put an end to years of pain for Miller's and Warehouse.
Both have had a disastrous time in the discount department store sector in recent years, brought on by internal problems and intense competition, mostly between each other.
Miller's discount variety business is made up of about 340 Go-Lo and Crazy Clarks stores, but it intends to close about 80. Warehouse, which entered the Australian market five years ago through the purchase of Crazy Clint's and Silly Solly's, owns 115 stores.
Miller's shares rose 7c to 77.5c on heavy turnover.
Warehouse's shares recorded their biggest one-day gain in several years, soaring 28c to $3.68.
Mr Morrice said the company initiated discussions with Miller's only a few weeks ago. "I think, from both our points of view, it's an option that we are at least prepared to discuss and consider and we'll see if there is any outcome or not," he said.
Warehouse has apparently begun talks with four private equity firms -- Allco Equity Partners, Castle Harlan Australian Mezzanine Partners, Archer Capital and Catalyst -- to buy the merged business. The enlarged business would generate sales of about $1.3 billion and have a market share of 14 per cent, improving its competitive platform against rivals Coles Myer and Woolworths.
Coles, through Kmart and Target, holds a 45 per cent share of the market. Woolworths, with its Big W banner, has about 31 per cent, according to ABN AMRO.
A Miller's spokesman confirmed that "various parties" had approached the group, which also owns fashion labels such as Katies, but said discussions were all "preliminary in nature".
The Reject Shop, with more than 100 discount stores in Australia, has apparently approached Miller's about some of its state store networks.
Industry sources believe that a successful divestment of Warehouse Australia would make its slimmer New Zealand parent company more attractive to predators such as British supermarket giant Tesco, which already has close ties to the company.
WHS $2 is "easily attainable" was your call...
currently $3.68!!!
no, laughing at YOU losearion[^]
WHS at $4.00 and not a single comment?
The market obviously thinks they've got a good chance of securing a reasonable price for the Yellow Sheds. If they got A$100m I'd pick $4.00 is about 14x Net NZ earnings.
What's WHS worth if they buy Millers discount variety business instead?
:D:D:D:D:D:DI`m happy
My revaluation of WHS met with ridicule from Belgarion.
[^] utterly satisfying timing, time to crack a nice red, sit back and enjoy.
It`s true, Belgarion is the BIGGEST LOSER!
congrats...well done...everytime
"$2 is easily attainable" now $4!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Barharhahahahafaraajhahaaraaaaaaaaaaaaaaaaaaaaaaaa aaaaaaaaaaa
BTW. WHS has put on over $275,000,000 since then too;)
add that to his sell call on AIA, it put on over $500,000,000!!!
and he`s delirious over a mouldy pumped up carpet roll:D
Aust to go ... only a matter of days now ... but the price is getting cheaper for the private equity guys ... a dog recognised as such at last
http://www.stuff.co.nz/stuff/0,2106,3386949a13,00.html
Hey K9, while a $2 call was crazy, you did originally out a $2.50 call yourself which you changed after a few posts of mine! Perhaps you are going a little far with your ridiculing methinks.
:D:D:D:D:D:D
what???
now you are trying to claim some kind of credit
...for my own posts?
maybe I should now claim I helped you hold for another 50c on MHI[:o)]
No, just that you reviewed your initial call after I asked what it was based on and suggested that it was a bit extreme.
Snoopy .. your post on sharechat
http://www.sharechat.co.nz/forum/showthread.php?t=78
Good stuff and keeps the thread going
Do I read it correctly that the new workings and assumptions are based on the future in NZ alone, ie assuming Austrlaia gone.
For those who don't go to sharechat Snoopys model says 380 would give a long term return of 7.6%
Snoopy, a question - if one wnated a Buffet like 15% return wpuld price would one buy at?
Interesting that your modelling comes up with about the current price ... sort of suggests that Mr Market has already priced in the 'good news' of an Australian exit
Yes that is correct. I have also downgraded the expected ROE to better reflect the fact that WHS is a mature NZ business. I see WHS as still growing and still generating above average long term returns. Despite recent difficulties WHS do have a very good record stretching back over ten years after all. I don't subscribe to the view that management have 'suddenly lost it'.Quote:
quote:Originally posted by winner69
Snoopy .. your post on sharechat
http://www.sharechat.co.nz/forum/showthread.php?t=78
Good stuff and keeps the thread going
Do I read it correctly that the new workings and assumptions are based on the future in NZ alone, ie assuming Australia gone.
That info you seek is on the horrible squashed up sideways chart I was forced to post as an attachment to the text I posted on 31st July 2005. If you look really hard at the top LH corner of the chart (relative to the orientation in which it is posted) you will see the figure you want. "$1.95".Quote:
quote:
For those who don't go to sharechat Snoopys model says 380 would give a long term return of 7.6%
Snoopy, a question - if one wanted a Buffet like 15% return would price would one buy at?
I think some WHS followers are of the view that once WHS get out of Australia their problems will be over. I don't subscribe to this view. It will be much harder for WHS to grow their business if restricted to the NZ market alone. And there are the profitability trend problems with the Red Sheds to sort out.Quote:
quote:
Interesting that your modelling comes up with about the current price ... sort of suggests that Mr Market has already priced in the 'good news' of an Australian exit
I was in the newest WHS last week, the new one in Riccarton Christchurch. Notable in that I don't go to the WHS every week like may NZers do!
I must say I was impressed with the new 'uncluttered' look. It did seem easy to make my way about the store to find what I wanted. I even picked up some WHS travel insurance for a short trip to Oz I have planned - how many of you knew WHS even sold that? Price compared very favourably with what I could get via my travel agent or my bank.
I picked up a three pack of long woollen blended socks ($9, not on special, but the regular price seemed to be cheaper than the 'special prices' at other stores for NZ made product). I also bought the toilet paper there. I didn't plan that, but there it was prominently displayed at the end of the aisle at a good price so I purchased.
As a concept I think the revamp will work.
SNOOPY
Bongo - interesting comments about a bit of panic at HQ.
Will look forward to the next announcement
I hope they don't do a Postie Plus and blame warm weather in July ... how original
Re sales / sqm ... what's new .... for a few years now sales/sqm in the Red Sheds has been declining
The more footprint they put down the bigger the problem seems to get .. revenues don't seem to increase at the same rate and expenses go up.
I am fascinated as to where you are getting these insider insights from Bongo!Quote:
quote:Originally posted by bongo66
The large concept stores in Hamilton and Whangerei are not working. Sales per sq metre are down.
IMO you are viewing the sales situation too simplistically. I could easily improve WHS sales per square metre. I would close all stores and replace them with telephone booths with a single cashier.
To shop at WHS, you would then take down your weekly flier to the booth and the operator would get your order sent to a single centralised distribution warehouse and the goods would be couriered out to your home. My strategy would drastically improve sales per square metre. But would it be in the best interests of the Warehouse company?
Take the new Riccarton Warehouse that has moved from Upper Riccarton, the Bush Inn Centre, to a stand alone site on Blenhiem Road - the site of the former Warehouse regional distribution centre in fact.
The new site is bigger, yes, but it is also in an area that has traditionally been filled with wholesale distribution type businesses and factories. IOW, WHS have moved from 'prime retail' to an industrial area with (I presume) consummately lower rates. I'm picking the new site has a lower cost base. That means profitability could actually improve with the same number of sales and -because the new store is larger- that could mean improved profitability with 'lower sales per square metre'.
'Store location' seems to be a part of the Warehouse development strategy that most people miss. Warehouse tend to keep out of shopping malls, not because sales would suffer if they went there.
The problem is the sales increases a mall based WHS would get would not justify the higher rent payable compared to a stand alone WHS site. 'Profitable growth' is what the red sheds need. Not 'growth at any price'.
SNOOPY
discl: hold WHS
Me neither. It happened over several years! [:p]Quote:
quote:Originally posted by Snoopy
I don't subscribe to the view that management have 'suddenly lost it'.
Full year announcement Sep 9th I believe
Could be interesting
Half year report had Red Sheds footprint up 10% with hardly any increase in sales on H104 and a 12% decline in ebitda on H04
So 28,000 sq metres of extra selling area for $12M less profit
Hope trend isn't continuing ..... Bongo has heard that it is .... could be interesting
Bongo66: are you having clandestine meetings with the WHS tea lady???
I don't (at this stage) put much weight on the (interesting) statements you are making as you don't reveal the source or otherwise
Everything hearsay and unsubstantiated
Being a publicly listed company anything likely to affect the share price, and particularly sales figures, should be a closely guarded secret - so why would you know (they are panicking at head office) ?Quote:
quote:Originally posted by bongo66
Not a good report coming in next few weeks. Sales are down and people are panicking at head office...
when are they going to China?
Earnings forecast $66m to $71m has not been changed so one would not expect any shocks -they would have advised the market if this had changed.
B69, I hope you are wrong as I bought some on the recommendation from a broker who said that his firm believed that the sale of WHS Aust operations is a question now of when, not if. When the sale happens, WHS will be freed from pouring resources into a struggling operations and NZ would get a shot in the arm. Capital repayment and special dividend are possibilities. Lower sales and warm July no surprise as WHS has already alerted analysts to it. Sales will be down but profits held through margin improvements.
bad move !!Quote:
quote:Originally posted by icehot
B69, I hope you are wrong as I bought some on the recommendation from a broker who said.....
I bought at $3.45 so should I sell now? I am told it can go to $5.00 post sale of Australia and capital repayment/share buyvback?
icehot
1 & 4) Buy more
2 & 5) Sell all
3 & 6) Hold what you have
Now roll the dice.
Not helpful.Quote:
quote:Originally posted by Paper Tiger
icehot
1 & 4) Buy more
2 & 5) Sell all
3 & 6) Hold what you have
Now roll the dice.