oh well - maybe they can get King Win L to make a takeover - takeover rumours are really the only thing that impacts WHS SP
Printable View
oh well - maybe they can get King Win L to make a takeover - takeover rumours are really the only thing that impacts WHS SP
WHS has sold out of Oz.
Good to see that they apply their mantra
"Where everyone gets a bargin"
even when selling part of the business.
Early response seems to be the market does not like .... a bit of selling
Even though well signalled and most knew this would happen and they would have to writeoff $100M odd some would say all built into the price .... but there were many (some on sharetrader) once the announcement was actually made would be the time to get back in
However Snoopys earlier analysis a while ago sort of suggested (I recall) that 400 odd was a pretty good price for WHS ... ecen without Aust strangling it to death
Maybe the market is efficient (more so than we give it credit for) but the next few days could be interesting ... wonder what the price will be next week
Bought a few a while back for 399 cps. Just put in for a further 1000 at todays price. I fail to see why the price is not going up on the announcement. I suppose the majority of small shareholders ahve to read the newspapers, think about it - and then ring a broker. I like the moves they are making in NZ. Sell booze - sell ride-on mowers, maybe sell Chinese cars soon?
Good they are out of Australia.
However, I personally dont think food and alcohol is a good option.
You cant beat supermarkets. They work on higher turnover/lower margins and have better buying power by selling greater volume of product. Also until WHS becomes a full product supplier, people cant do all there shopping there which is the way supermarkets are going.
If anything it's a positive as it removes an uncertainty. :D
Then again, it also removes a potential growth avenue. :(
So what now? Big fish in a small pond? Fiji? [?]
I disagree re the supemarkets. They are already converging -- you can buy TVs at Foodtown, toilet paper and shampoo at the Warehouse. No doubt this trend will continue.
Aussies may get a bargain from sale of Warehouse
24.11.05 10.00am
Discount retailer The Warehouse has signed a conditional deal to offload its troubled Australian business.
A joint venture between Catalyst Investment Managers, its parent PPM Capital, and Castle Harlan Australian Mezzanine Partners -- acting on behalf of the Champ funds -- has agreed to buy the business for A$92 million ($99 million).
In 2000 The Warehouse paid A$105 million for the chain which consisted of 105 Clints Crazy Bargain and Crazy Sollys stores.
The sale will result in a pre-tax earnings expense of between $80-$90 million for The Warehouse.
The sale is expected to be completed in early 2006, subject to regulatory approval and other commercial conditions, including an agreement with Australian discount retailer Millers, which the joint venture is also buying.
The head of The Warehouse Australia, Ian Tsicalas, will stay at the helm of the new combined business, and as a result has today resigned as a director of The Warehouse.
The Warehouse was advised by Auckland-based First NZ Capital and Sydney-based firms CSFB and Allens Arthur Robinson.
The Warehouse chairman Keith Smith said while The Warehouse Australia has made improvements in the past year, a review indicated that substantial further investment was needed to achieve operating scale and future growth.
"The board considered that at this time, focusing the company's resources on developing its New Zealand businesses would generate a better outcome for shareholders," he said.
The Warehouse revealed in June it was looking to merge its troublesome Australian "Yellow Sheds" chain with rival Millers and then sell off the joint operations.
The enlarged discount variety business would generate sales of about A$1.3 billion and have a market share of 14 per cent, making it more competitive against the dominant Australian players, Coles and Woolworths.
Australia has long been a drag on The Warehouse's profits. For the first quarter of this year, The Warehouse Australia reported an 8.7 per cent drop in sales during the quarter, to A$105 million, while same store sales fell 8.7 per cent.
Sales in New Zealand for the period were up 3.2 per cent to $326 million, with same store sales up 0.2 per cent.
The Warehouse in New Zealand has been undergoing a revamp under new chief executive Ian Morrice, who took on the role in August last year.
Mr Morrice has worked at cutting clutter in the group's stores and improving the product line. A new logo was unveiled during the October quarter and a replacement store opened in Palmerston North based on layout and fixture innovations trialled at the group's laboratory store in Te Rapa.
The group has also announced plans to open an alcohol shop within its store in Fraser Cove, Tauranga.
The trial shop will be owned and run by The Warehouse Cellars, a joint venture between the group and Reliance Wines.
Shares in The Warehouse last traded yesterday at $4.09, having ranged between $3.04 and $4.39 over the past year.
- NZPA
Yes they are moving into Warehouses area based on there high volume/low profit margin. Warehouse cant compete and I think they will suffer. Warehouse is the David vs the supermarket Golith and in this case I dont think the small will survive.Quote:
quote:Originally posted by PlaceboI disagree re the supemarkets. They are already converging -- you can buy TVs at Foodtown, toilet paper and shampoo at the Warehouse. No doubt this trend will continue.
Time will tell but I think they should have looked for another warehouse stationary (untapped market) rather than supermarkets which is a mature market.
Warehouse was a minnow compared to Farmers when they started out but they prospered by delivering a better offer. As always the better offer will prevail. Nobody in New Zealand has yet demonstrated an ability to package a catch-all grocey+general merchandise offer.Quote:
quote:Originally posted by CJ
Yes they are moving into Warehouses area based on there high volume/low profit margin. Warehouse cant compete and I think they will suffer. Warehouse is the David vs the supermarket Golith and in this case I dont think the small will survive.
Most supermarkets I go to are attempting to stock limited lines of general merchandise. They are typically hamstrung by lack of space and so will not present a serious one stop shop competitor without some equally serious investment.
Warehouse is already gearing to compete on this level by sourcing oversized sites for the "hypermarket" concept. Personally I think their historical deficiency has been detail. "Retail is detail" and I still remain unimpressed by their merchandising skills although I have not seen their concept store in Hamilton. The key to them succeeding with a full grocery offer is how it will be packaged. I suspect a model similar to Aldi is the way to go because it offers higher gross margins - an important condsideration while they lack scale. This might not fit comfortably with their attempts to upscale the discount stores so I'll await outcomes with interest. A successful strategy could provide years of future growth. A poor implementation will probably see them either splutter along as they have for several years or be swallowed by Woolworths.
I agree with your comments but WHS beat Farmers on cost (and teh customers followed). You cant beat a supermarket on cost (which is my point) so you have to diffentiate some other way (WHS key differentiator is cost though they have now improve to provide a full product line with three pricing options - they call it good, better, best).
The threat I see is why cant supermarkets do the hypermarket. They do that over here (UK) where they have three different formats of stores from inner city dairy type, full supermarket, and then hypermarket.
IMHO WHS should have tried to by repco in NZ rather crazy clints in Australia (ie. tried to get warehouse stationary type growth in the market they know).
Experimental store performs best
26 November 2005
Sales at The Warehouse's Waikato "laboratory" store have been the strongest of all 85 Red Sheds since its July 14 opening, chief executive Ian Morrice says.
He told yesterday's annual meeting in Auckland that the Te Rapa store, which is testing new layouts and a greater range of clothing, entertainment goods, technology products, gardening equipment, consumables and groceries, has been the group's best sales performer.
In March The Warehouse began a three-year programme to improve store layouts, customer service and products. Aside from Te Rapa, it has opened two further new-format stores, in Palmerston North and Lower Hutt.
The next will be in Pakuranga, Auckland, in April.
The Warehouse Stationery business, or Blue Sheds, would benefit from Thursday's sale of the company's loss-making Australian operations, Mr Morrice said, with about $10 million to be invested in the Blue Sheds over the next few years.
"We think we've got a very good store footprint but can do more to generate more sales per square metre," he said.
He believed this financial year would see consolidation at the 43 Blue Sheds, but would also see a return to earnings growth. July-year profit fell to $3.9 million from $7 million the previous year.
The price dropped again to 3.98
What is going on with WHS? I can't make sense of it.
Although, I sold all my WHS on 4.14 (bought them on 3.86) :D (was a fluke, I needed some money!)
A few days since telling the world they sre giving up on Australia and will now concentrate on NZ and still the shareprice languishes (Millers on the other hand went up)
Obviously Tesco (or was it Walmart) have given up WHS
Is it that after so many years of hanging in there NZ punters finally officially declared WHS as a dog .... snd not even rsted as a turnaround story
Afraid Mr Icehot ... that $6 here it comes not looking likely
Perhaps it is just people digesting what was said at the AGM on Friday? Did anyone go?Quote:
quote:Originally posted by onlinesid
The price dropped again to 3.98
What is going on with WHS? I can't make sense of it.
Although, I sold all my WHS on 4.14 (bought them on 3.86) :D (was a fluke, I needed some money!)
I wouldn't be surprised to see the share price weaken further. WHS at $3.98 certainly isn't cheap. By my reckoning they need to raise underlying profits by 10% next year, to justify even that $3.98 share price. That will be a tough assignment in the current retail environmnet.
With Australia gone, so is the obvious avenue for growth. Having said all this, I don't regard WHS as being seriously overvalued. But I wouldn't be looking to buy any more shares at today's prices either.
SNOOPY
discl: hold WHS, and happy with my underweight position
He should've said also that the "brains" behind the store redesign and new layout are all gone, in the massive management exodus started with Muir.... There is no real strength of management left, especially at the Blue Sheds, and Tindall is just a figurehead at the moment.Quote:
quote:Originally posted by rmbbrave
Experimental store performs best
26 November 2005
Sales at The Warehouse's Waikato "laboratory" store have been the strongest of all 85 Red Sheds since its July 14 opening, chief executive Ian Morrice says.
He told yesterday's annual meeting in Auckland that the Te Rapa store, which is testing new layouts and a greater range of clothing, entertainment goods, technology products, gardening equipment, consumables and groceries, has been the group's best sales performer.
In March The Warehouse began a three-year programme to improve store layouts, customer service and products. Aside from Te Rapa, it has opened two further new-format stores, in Palmerston North and Lower Hutt.
Can anyone tell me where the proposed new format store at 'Pakuranga' is being built. Or does this refer to a new Warehouse being built in the the Slyvia Park project now being developed by KIP. Perhaps Pakuranga sounds better than Mt. Wellington.
I believe that they are currently renovating their Pakuranga store at Pakuranga Plaza at the moment given all the construction work which is going on there.
Presumably this is the store which they are referring to.
If Tindell sells his stake, the price will jump 20% !
Wow, only 3.77 just now!
What is happening? Now I'm really glad to have sold it.
onlinesid ... was 375 earlier
Heck ... where are the faithful ... all though who thinks the WHS is a great story and once Aust was gone the world be a lot brighter and as icehot sais a shareprice of 600 soon.
Looks like the market has at last deemed WHS to be a DOG ... an unwanted one at that .... and probably with fleas as well
Bongo - you are the man ... you were right .... HQ staff were and probably are still in a panic ... more bad news to come out? ... or was it because they all are likely to lose their jobs soon.
Care to ellaborate further?Quote:
quote:Originally posted by Bling_Bling
If Tindell sells his stake, the price will jump 20% !
Quote:
quote:Originally posted by onlinesid
Care to ellaborate further?Quote:
quote:Originally posted by Bling_Bling
If Tindell sells his stake, the price will jump 20% !
The best thing for WHS is a major stakeholder that can add value to the company. It seems like Tindell has done his bit and time to move over for a larger company that has the muscle behind them to takeover and move this puppy to the next level.
Given they were at the London Employment Expo looking for senior distribution / logistics people suggests there are more than one or two challenges ahead.
Just posted this on the other WHS thread:
Last year WHS made about $108m pre-tax & abnormals. Australia contributed a loss of about A$5.4m.
Following the sale of the Australian "assets", WHS's consolidated earnings should increase by about $6m from the de-consolidation of the AU losses, and a further $6m from the reduction in interest outgoings (assuming the $99m is used to retire debt).
WHS's adjusted pre-tax earnings would therefore be about $120m, or about $80.4m after taxes. This equates to about 26.3cps.
At $3.68, WHS are therefore trading at about 14x earnings, the lowest in a long time, but still not an exceptional bargain. It equates to a pre-tax earnings yield of 10.67%, and post-tax of 7.15%.
WHS's NZ growth has slowed considerably in recent times. EBIT was down more than 8% last year, and sales flat. Q1 2006 saw a continuation of this trend; total sales were up 3.2%, but the all-important same store sales a more meagre 0.2% (much below the rate of inflation). WHS is therefore continuing to lose market share. WHS stationary was up 2.9%, with same store sales down by 1.6%. Clearly, the detour into Australia has had the unfortunate consequence that WHS have neglected their NZ business - their strongest asset - and have continued to lose ground and have their competitive advantages steadily eroded.
It was always difficult to see WHS making headway in foodstuffs, given the very efficient and established operating model of the likes of Pak'n'Save which have the discount segment sown up. The liquor venture has some potential, but it won't add materially to WHS's aggregate results.
As such, it appears as though WHS has largely gone "ex growth", and will be prices largely as a dividend stock from here.
A full payout would yield 10.67% pre-tax, which is not too shabby, but that rests on the assumption that WHS can sustain margins at their present levels. This may or may not be a fair assumption.
Whatever the case though, it is difficult to see a large amount of upside in WHS's price at any point in the future, at least unless and until they get there act together in NZ & perhaps move to a position of gaining market share again.
All in all, one would have to conclude that WHS at $3.68 is priced about right, and might appeal to those looking for pre-tax dividends of 8-10%.
Cheers,
Dimebag (none held)
I guess this makes it official, WHS is a Dog:
http://www.fatprophets.com.au/conten...dor%2c+Fat+257
Where is the growth coming from?
It still falling lower even when I thought it's reached the bottom!
There is no growth moving forward - that is the point. WHS are now a dividend stock.
The fact that a company has no growth prospects worth paying for does not make the stock automatically a dog. At a pre-tax earnings yield of say 13%, it would be reasonable value. The stock would have to sell for $3.00 for this to be the case.
For those looking for decent inflation-indexed income, $3.00 would be a buy IMO.
Dimebag (none held)
Current Price: $3.50
What will be interesting is what happens to WHS pricing strategy and the price roll back if the dollar falls to the level some a predicting
Remember it wasn't that long ago the NZD was worth USD 0.4. The rising currency has caused price deflation and margin problems for the WHS (because the number of things they sold did not increase) ... great for consumers though
latest catalogue has a lot of reference to November prices and previous prices .... what will happen when the new cost could be higher than the old sell price.
Probably will impact demand as well ... would ananda buy those cool Foxhole 3/4 pants for $30 in a few months time (the ones she paid $16.80 for the other day)
Maybe selling less for more might be an answer but the WHS overheads will continue to increase so overall margins might remain under pressure in the future ... bad if demand really drops away
Like Dimebag $3 might be where WHS wettles down at
Bling will not be able to help himself if WHS hits $3.00.
Boxing Day sale may yet come early on the equities market. :D
I see that Millers are up 30% odd since they sold their Aust discount outlets .... but WHS in spite of doing the same still languishes around the 350/360 mark ... some 50 cents off the price the announcement was made
Tescos (or was it Walmart) must still be really tempted ... what an opportunity to get NZ's leading retailer cheap
Having only entered the Sharemarket a year ago, I guess being a bit of a Newbie.... What are peoples thoughts on this 30 cent rise in only a few days? Is WHS as volatile as it looks?
Kinda feel like getting out now?
There is nothing particularly special with the WHS share price going up or down by 30c plus in a few days, and no guarantees what it will today, tomorrow or next month.Quote:
quote:Originally posted by cjhaigh
Having only entered the Sharemarket a year ago, I guess being a bit of a Newbie.... What are peoples thoughts on this 30 cent rise in only a few days? Is WHS as volatile as it looks?
Kinda feel like getting out now?
To sell is a decision only you can make. Hopefully you know why you bought and have a view of where the company is going.
My reading is that the HY result is considerably better than analysts were expecting. Might see a little interest? Tug-of-war between general negative sentiment regarding consumer spending outlook and positive sentiment regarding WHS FY outlook...hmmm, my guess is it goes up.
with whs lining the supermarkets up it should be interesting times. The supermarket monopoly has been putting the hurt on suppliers of late due in part surely because of the noises emanating from whs about the food and liquor segments??
barnsley bill -What supermarket monopoly is that?Quote:
quote:The supermarket monopoly has been putting the hurt on suppliers of late due in part surely because of the noises emanating from whs about the food and liquor segments??
It's a duopoly - Foodstuffs and Progressive Enterprises.
quite right sorry, should have said duopoly. end result is fairly similar. i.e. telecom/ vodafone with mobile charging.
Must be a hidden message from the market in the relative performance of Millers and WHS since they hocked off their discount outlets ........ Millers now UP 50% since that happened and WHS still languishing somwhat below the $5 markQuote:
quote:Originally posted by winner69
I see that Millers are up 30% odd since they sold their Aust discount outlets .... but WHS in spite of doing the same still languishes around the 350/360 mark ... some 50 cents off the price the announcement was made
Is WHS the sleeping beauty just waiting to make up lost ground
"Warehouse Extra" eh? I don't spose that's anything like Tesco Extra. Like a normal store but with extra. Oh wait...
Nice original work kids. Keep it up.
Quote:
quote:
Warehouse plans a little something 'extra'
29.03.06 1.00pm
The Warehouse's new mega store at the Sylvia Park development in Auckland is to be named The Warehouse Extra.
There's no premium attached to originality, but the name is effective. Now if The Warehouse could just borrow a few more effective ideas from successful international retailers ...Quote:
quote:Originally posted by limegreen
"Warehouse Extra" eh? I don't spose that's anything like Tesco Extra. Like a normal store but with extra. Oh wait...
Nice original work kids. Keep it up.
Lets wait till they bring out a smaller store format for areas where a large format store wont fit and call it something original, like "Warehouse Metro"Quote:
quote:Originally posted by limegreen
"Warehouse Extra" eh? I don't spose that's anything like Tesco Extra. Like a normal store but with extra. Oh wait...
Get in while you can. Warehouse Extra sounds to me like Ian is getting ready for Tesco (Tesco Extra) to buy WHS.
Perhaps - but as a strategy that sounds as effective for Tesco as The Warehouse expanding by buying Crazy Clints and Silly Sollys.Quote:
quote:Originally posted by sniper
Get in while you can. Warehouse Extra sounds to me like Ian is getting ready for Tesco (Tesco Extra) to buy WHS.
Disc: I hold both Warehouse and Tesco shares
Warehouse third quarter sales modest as slowdown bites
08.05.06 1.00pm
Discount retailer The Warehouse today posted a modest increase in third quarter sales as the softening economy continued to bite.
The Warehouse said sales in the three months to April 30 were $386.4 million, up 1.3 per cent on the same period a year earlier.
The retailer said demand remained "patchy", with economic indicators suggesting an "uncertain consumer outlook" for the rest of the year.
The Warehouse said it was sticking with previous full-year earnings guidance of between $83 million and $88 million, after adjusting for the divestment of its Australian discount arm.
Group sales for the financial year to date of $1.318 billion were 1.7 per cent ahead of the same period last year.
Third quarter sales for its flagship Warehouse NZ division were down 0.3 per cent on the same period a year ago at $327m , while year to date sales were up by 1 per cent.
Same store sales for the quarter declined 2.7 per cent in the quarter to be down 1.7 per cent in the year to date.
"Continuing patchy consumer demand and the late onset of winter have affected our seasonal categories, with the result that The Warehouse NZ sales were below our expectations for the quarter," Warehouse chief executive Ian Morrice said.
"Although there were highlights in the sales performance, including the addition of Apple iPods to our range late in the quarter, these gains did not compensate for a slower start to winter merchandise sales."
While no new stores opened in the quarter, the Pakuranga store extension was completed in early April.
In contrast, Warehouse Stationery had a strong third quarter, with sales, at $59.4m, up 11 per cent on the same period a year earlier.
Year-to-date sales at $159.5m were 6.3 per cent ahead of last year.
Same store sales were up by 11.9 per cent in the quarter and 4.6 per cent for the year to date.
The Warehouse opened its first Warehouse Cellars store in Tauranga in April -- offering wine and beer alongside its existing grocery range. The store was trading well.
The next major development for group is opening the first in-store pharmacy at its Te Rapa concept store in Hamilton in the fourth quarter.
The Warehouse will also go head-to-head with the major supermarket chains, opening its first Warehouse Extra format store in Sylvia Park, Auckland, in June.
At 12,500sq m, The Warehouse Extra store will be the first in Australasia to offer customers a Walmart-style non-food and food product range under one roof.
"This is a new way of shopping for New Zealanders," Mr Morrice said.
As well as the general merchandise and apparel usually found in a Warehouse store, customers would find fresh food, a full grocery range, wine and beer, an in-store pharmacy, a cafe and a bakery.
The Warehouse jettisoned its troubled Australian discount offshoot in November last year and now has 85 Warehouse New Zealand stores and 43 Warehouse Stationery stores.
The company has 10,000 employees across New Zealand.
Shares in The Warehouse last traded on Friday at $3.95 against a year high of $4.17 and a low of $3.04.
- NZPA
WHS doesn't pay enough to hold, and the SP has been dribbling steadily downwards since November 2003. A series of rallies, each lower than the one before.
Tempted to avoid like the plague.
Even Briscoes are taking share away from the Red Sheds ..... BRG recent sales performance better than WHS
All that increased floorspace and less sales .... ask yourself whats going on
As a consumer i've noticed that that warehouse products lately are still cheap in everything but price.
It's was the weathers fault!
http://www.stuff.co.nz/stuff/0,2106,3661639a13,00.html
WHS seems to be in favour today when others are heading down. Good news on the horizon?
GIDDAY
FOODSTUFFS GOING FOR 10 %
TRADING HALT
Thousands will be killed in the rush. Foodstuffs look to be protecting their patch. Warehouse extra about to open - with food. Or perhaps a blocking stake to deter overseas (OZ) -predators.
Something exciting for the WHS shareholders.
Not to the Insiders who started making their move around 31/5!Quote:
quote:Originally posted by Toddy
Something exciting for the WHS shareholders.
BRICKS is in TORONTO,, CANADA and cannot see any comments about WHS as there are not much left on the NZX it had to come,, while the mob talk about TAX and the price of FISH someone steels the last of the BIG ones... [8D]
What a lot of rubbish. WHS say no sale - buyer says 10% only no further interest. Why in the name of reason are mugs paying 506 or more for this one? I sold out at 503 with a big smile and two or more Gs profit and I am still looking for any sign that I was wrong. When the dust settles and they have their 10%, this has to drop back close to 400 cps.
I'd put WHS' normalised earnings at around 29 cents per share (they won't hit anything like it this year because of the Aussie losses). If you were buying the company $5.00 would be the sort of price you'd have to pay. But this tender offer seems like an expensive method of buying a 10% stake. Perhaps Foodstuffs have been spooked by someone? I wonder if they had just under 5% already? The price held up quite well the last few weeks. I'd put it down to Telecom money finding a new home but perhaps this what not the reason?
Prior to opening today they held approx 5.1m WHS shares and so far today have acquired about 13m (which may or may not include those initial 5.1m)
15.3m would trigger a shareholder notice.
It ain't over til it's over. I read an interview the other day (herald?) with foodstuffs, talking about their strategic moves to stay ahead of the competition (the aussies). They reckon they saw Woolworths coming over here & now they think walmart will be in australasia in a couple of years, maybe through a takeover of woolworths. I'm not sure if it was the same article but i also read about the idea of whs being sold given that they've moved away from Tindall's original conception and reflect Maurice's plans e.g. selling alcohol etc. So Tindall's interest may be waning.Quote:
quote:What a lot of rubbish. WHS say no sale - buyer says 10% only no further interest. Why in the name of reason are mugs paying 506 or more for this one? I sold out at 503 with a big smile and two or more Gs profit and I am still looking for any sign that I was wrong. When the dust settles and they have their 10%, this has to drop back close to 400 cps.
So, given this is clearly a blocking stake, what do Foodstuffs know about who is coming to NZ? Is someone out there negotiating taking all of WHS? will they step in to this stand & start a bidding war? was there a gunman on the grassy knole? & within that speculation lies the answer to the $5.05 bids (not my bids i might add!)
From Bloomberg
Quote:
quote:Foodstuffs expects Tesco, Britain's biggest retail, or Wal- Mart, the world's largest, to expand to New Zealand within three years, Tony McNeil, managing director of the grocer's Wellington cooperative, told the New Zealand Herald this week.
bloomberg quotes walker capital saying that the offer is above their valuation of whs. But then, if that valuation is based on discounted cashflows etc throw it away. An LBO valuation would be more relevant to what an industry player would pay & that is almost always much higher than discounted cashflow. Without seeing the balance sheet, a 30% premium to market price before the offer is about ballpark.Quote:
quote:I'd put WHS' normalised earnings at around 29 cents per share (they won't hit anything like it this year because of the Aussie losses). If you were buying the company $5.00 would be the sort of price you'd have to pay.
[quote]quote:Originally posted by Westie
From Bloomberg
Surely must expect Tesco/Walmart to enter Australia first, and don't believe Tesco at least have said they are looking at this. They are just starting off in the States, and still battling with the others in China to grow as fast as possible.Quote:
Foodstuffs expects Tesco, Britain's biggest retail, or Wal- Mart, the world's largest, to expand to New Zealand within three years, Tony McNeil, managing director of the grocer's Wellington cooperative, told the New Zealand Herald this week.
Aldi have been in Australia for a number of years, and don't believe have been that succesful - although not to the same scale as a Tesco/Walmart/Carrefour.
Rumours have been around for a couple of years that Costco are coming - but.......
I bought into the WHS @ 3.95 just a month ago hoping for a slow and steady rise.
Not in my wildest dreams did I think I'd get 30% so quickly.
Another poster that sold out today was my old mate SNOOPY. Well done SNOOPY you lucky bugger. MACDUNKQuote:
quote:Originally posted by rmbbrave
I bought into the WHS @ 3.95 just a month ago hoping for a slow and steady rise.
Not in my wildest dreams did I think I'd get 30% so quickly.
Presumably Foodstuffs want 10% to block a takeover by another player.
Foodstuffs are a cooperative not a corporate. They do supermarketing REALLY well, but they don't necessarily have clue 1 about buying companies.
Agree with Belg here. On the flipside, Warehouse are a corporate, not a co-op, yet managed to stuff up their acquisition strategy.Quote:
quote:Originally posted by SueJ
Foodstuffs are a cooperative not a corporate. They do supermarketing REALLY well, but they don't necessarily have clue 1 about buying companies.
The shareholding is a spoiler in more ways than one. Even if Foodstuff's paid too much, they have dealt themselves a hand at the table for just $150m. That's a pretty cheap insurance policy in comparison to the size of the grocery sector and the threat of WOW or someone else becoming an "integrated" competitor. It both reduces the attractiveness and increases the takeover price to an acquirer like WOW by attaining a blocking stake. Tindal would have to be pee'd off a key competitor has made any exit strategy on his part that much harder.
I'm more surprised Foodstuffs bought the shares in this manner. I suspect they could have built a 10% shareholding without paying such a high average price. Something must have made them jump - hopefully not the brokers sales pitch!
Agreed...........Quote:
quote:Originally posted by belgarion
I need to be careful about what I say here ...Quote:
quote:Originally posted by SueJ
Presumably Foodstuffs want 10% to block a takeover by another player.
Foodstuffs are a cooperative not a corporate. They do supermarketing REALLY well, but they don't necessarily have clue 1 about buying companies.
1) Foodstuffs are a 'retailer'. Historically they have done food ... ('nuff said)
2) Yes, while a co-op, they have recognised a need to act like a 'company'
3) In Europe, many of the big players in the FMCG (Fast moving cheap goods) markets are co-ops.
... Underestimate co-ops ... and Foodstuffs ... at your peril ... Just by way of parallel, some of the biggest insurance companies are 'mutuals' ... same sort of concept but in this case a bit different.
I need to be careful about what I say here ... SERENE :D
Smart move to block, and recent attacks from Australia have seen our listed companies undervaued and open to attack..
If his objective is to hold until the day he dies then it makes no difference. If he wants to exit to a would be acquirer but Foodtuffs doesn't want to buy the whole company then their blocking stake reduces the takeover premium. This isn't something to be pleased about, especially when they time the move to overshadow with the launch of WHS' 1st supermarket.Quote:
quote:Originally posted by belgarion
Disagree ... I suspect Tindall would be quite pleased.
I'm not sure that being a follower of Pak'n'Save is going to induce a fund manager or small shareholder to sell their Warehouse shares to them. The tightwad in me says buy the shares cheaply, not at a 25% premium to market. If they got caught short by another predator amassing a stake then they could still buy on market with a $5.00 stand in 3 months time and not have give away an acceleration clause to boot.Quote:
quote:Originally posted by belgarion
With regards FS buying in this manner ... Hmmm ... sometimes annoucing your intentions in a big way is a great marketing ploy ... Sure they could have built a 5 percent stake and then made a stand ... This way, IMHO, is better ... Pak'n'Save has many followers - including me ... (tightwad kiwi of Scottish forbears that I am. :))
:D:D:DYou were all told a long time ago.:D:D:DQuote:
quote:Originally posted by sniper
Get in while you can. Warehouse Extra sounds to me like Ian is getting ready for Tesco (Tesco Extra) to buy WHS.
Thats the way the hypermarkets work around the world and Tesco, Carrefour and hypermarket type stores are the trendQuote:
quote:Originally posted by sniper
:D:D:DYou were all told a long time ago.:D:D:DQuote:
quote:Originally posted by sniper
Get in while you can. Warehouse Extra sounds to me like Ian is getting ready for Tesco (Tesco Extra) to buy WHS.
Oh what a surprise, we have a STAND in the market again today it would seem.
The 'esclation clause' could be misleading.
I sold yesterday at $5.06, but I do not know who the buyer was. If I sold to someone expecting some "further developments" and price increases then the esclation clause can't apply to me.
How can I tell that I am selling, or did sell, to Foodstuffs ?
zacman
A stand in the market gets a special code, in this case SPEC1. (It also appeared as WHSY yesterday).Quote:
quote:Originally posted by zacman
The 'esclation clause' could be misleading.
I sold yesterday at $5.06, but I do not know who the buyer was. If I sold to someone expecting some "further developments" and price increases then the esclation clause can't apply to me.
How can I tell that I am selling, or did sell, to Foodstuffs ?
zacman
If you want to sell into the stand then you use that code, check this with your broker first
You definitely sold your shares into the open market and thus, yes, the escalation clause does not apply to you.
Hang on MacDunk. You can't have your bread buttered on both sides my old china.Quote:
quote:Originally posted by duncan macgregor
Another poster that sold out today was my old mate SNOOPY. Well done SNOOPY you lucky bugger. MACDUNKQuote:
quote:Originally posted by rmbbrave
I bought into the WHS @ 3.95 just a month ago hoping for a slow and steady rise.
Not in my wildest dreams did I think I'd get 30% so quickly.
When Snoopy picks a shocker, you jump on him and say his method is kaput.
If Snoopy is riding a winner, he's a lucky bugger.
Yet you say "well done", which seems to suggest that Snoopy did something right, which in turn suggests his method has merit.
Well, MacDunk, which is it?
Is Snoopy smart, or lucky, or both? ;)
Thanks, P T.
We live and learn.
zacman
Quote:
quote:Originally posted by Jolly
You all seem to miss the point on the price factor I think.
Quote:
quote:Originally posted by Halebop
It both reduces the attractiveness and increases the takeover price to an acquirer like WOW by attaining a blocking stake.
WARTHOG, I called SNOOPY a lucky bugger because he is. Unforseen events have a habit of saving him. If i have a go at someones stock selections, or investment habits, then surely i am big enough to congratulate them if they strike a win. I am very pleased for him, even although i think he should have held on for the next play.
macdunk
I am thinking hard about whether to sell my stake for a 30% profit but I really can't decide.
What do you think the next play will be Duncan?
I know no more than you. If i were a shareholder i would weigh up the odds of a second play forth coming. I think it might be worth holding on i cant see it ending here. macdunk.Quote:
quote:Originally posted by rmbbrave
I am thinking hard about whether to sell my stake for a 30% profit but I really can't decide.
What do you think the next play will be Duncan?
DISCL nil
You are being hard on yourself there, MacDunk :DQuote:
quote:
I know no more than you
You could sell into the Stand which gives you $5 in the bank but with the escalation cause giving you upside protection (for six months?). It would be worth foregoing the extra 8c for that insurance.
Foodstuff's stand ends with them holding 5.7%, which is not the 10% they need to block a take-over.
Why didn't they just wait for a year & buy at $2.50?
Perhaps the timing was unforseen. But it was always on the cards that a corporate within the global retail environment umbrella would end up on the WHS share register. IOW I don't count myself totally lucky.Quote:
quote:Originally posted by duncan macgregor
WARTHOG, I called SNOOPY a lucky bugger because he is. Unforseen events have a habit of saving him.
You might recycle that statement and say that it was always on the cards that some kind of heavy handed regulation fo Telecom would happen. I can't argue with that statement, except to say 'different cards' and 'different odds' (IMO).
I have sold to Foodstuffs Macdunk, taking the lower than market price ($5). But I still have the upside of the escalation clause if Foodstuffs decides to buy more shares in the next six months at a higher price. In that sense I am still 'in the play' as you put it.Quote:
quote:
I am very pleased for him, even although i think he should have held on for the next play.
macdunk
I have to add though, what 'next play' are you hinting at? This is not a full takeover offer. And with Stephen Tindall holding the controlling stake and 'not selling', it never can be a successful FULL takeover offer. That means no 'premium for control' can be built into the Foodstuffs offer price, because there is no control to be gained here.
Generally with takeovers I do not accept straight away. But in this case I had already done the numbers (see Focus Investment Group on the other channel) which basically told me:
Buy around $3, hold around $4, sell around $5
Given that this was not a full takeover, that made a quick decision on the lightning Foodstuffs raid possible.
Just to set the record straight. I still like this company. It is just that I see it as fully priced in the business sense at these levels. That means the price has got ahead of the dividend growth rate. With WHS at $5, I can reinvest my WHS capital better elsewhere.
SNOOPY
discl: former shareholder
Why do you think WHS will be $2.50 in a years time? That would indicate a massive deterioration in performance. Do you know something that the rest of us don'tQuote:
quote:Originally posted by SueJ
Foodstuff's stand ends with them holding 5.7%, which is not the 10% they need to block a take-over.
Why didn't they just wait for a year & buy at $2.50?
Foodstuffs stops at 5pc of Warehouse
09 June 2006
By DAVID HARGREAVES
Foodstuffs, New Zealand's leading supermarket operator has called off its bid for 10 per cent of The Warehouse.
Foodstuffs, which has the New World, Pak'N Save, Write Price and Four Square stores, ended its $5-a-share offer at 5pm yesterday, having picked up nearly 52 million shares, or just under 5.1 per cent.
The surprise, unsolicited offer was launched on Wednesday, with Foodstuffs picking up 4.2 per cent of The Warehouse shares that day. But sales slowed to a trickle yesterday, and The Warehouse shares closed down 2 cents at $5.06.
The Warehouse had no comment yesterday, but on Wednesday chairman Keith Smith said the move was a defensive one by Foodstuffs to protect its 57 per cent market share of the food sector.
"The board of The Warehouse Group believes that the offer being made by the Foodstuffs group of companies is not in the best long-term interests of the company," he said.
Foodstuffs New Zealand managing director Tony Carter remains upbeat despite the company's failure to achieve the target.
"We feel we've got a pretty comfortable level of shares. That's a pretty substantial stake and probably makes us about the third or fourth-largest shareholder."
AdvertisementAdvertisementThe Warehouse's largest shareholder, founder Stephen Tindall, reiterated on Wednesday that his 52 per cent stake was not for sale.
Mr Carter said there had been little point in continuing with the bid when it was not attracting a large number of buyers. Foodstuffs was a long-term shareholder and was not ruling out looking for more shares later. The company was not seeking board representation.
Foodstuffs would consider forging a closer relationship with The Warehouse in the future, he said. "Given the complementary natures of our businesses, it is something we would be prepared to discuss with them."
It would, however, be mindful of not doing anything that sparked regulatory concerns.
A spokesman for the Commerce Commission said yesterday it was aware of the Foodstuffs move. "We are looking at it as part of our monitoring and surveillance programme."
The commission becomes concerned when a purchase leads to a substantial lessening of competition.
I sold my WHS shares for 5.04c but was too dumb to know I was not selling into the escalator. Still at an overall gain of 40% I should not grumble. Even better was the 80% gain on selling WHSIZA which leaves me now holding some 40% of my holding in them at zero net cost. Trying to keep something in there in case the action hots up again as predicted.
No complaints, and this sort of thing is always on for FA's who buy when a stock is out of favour. Techies may gain other advantages from momentum trading however they dont often strike this sort of thing wheras it is part of the package that attracts fundies to this style.
As the now thorougly out of favour on this site Warren Buffett stated, " in the short term the market is a voting machine ['hear hear 'says Phaedrus]in the long term it is a weighing machine [' hear hear' says Snoopy].
THEY say most miracle's only last three DAYS.. [8D]
No special knowledge: I know a bit about supermarketing from the inside, I have observed WHS for years.Quote:
quote:(Belgarion) $2.50, however, even with a well financed new entrant is unlikely. The WHS have a very established presence and it would take a very obvious display of 'uncompetitive' and 'unsustainable' behaviour for the new entrant to pull WHS down to 2.50. I doubt that anyone in NZ would tolerate it ... simply because most Kiwis are smart enough to know that 'things to be good to be true' ... usually are.
However, if SueJ is alluding to other than this ... Then please, SueJ, share your thoughts.
In its traditional junk-importing business, WHS now faces several unfavourable trends - competition from KMart, Progressive, Bunnings and Mitre 10, each of which often beat WHS in terms of price and quality; the increased prosperity of the country since WHS' glory days of early nineties has moved the whole market up-scale; labour shortage means WHS no longer has the eager clever kids who used to run their stores - the staff is now dross. "The Warehouse, the Warehouse, where everything's broken and open" - this is not a winning business.
WHS now wants to do supermarketing. Sylvia Park is its first full-SM store. But supermarketing requires the just-in-time delivery of relatively small quantities of food, fresh and fit for sale, driven by sales at the store. This is the opposite of WHS's "stack 'em high and let 'em fly" philosophy where vast quantities of imperishable merchandise are pushed out to the stores, where they are stacked up in the tops or jammed up in the storeroom.
I would predict that Sylvia Park may look like a functioning SM - I haven't been there to see - but it will be costing them heaps (mainly in logistics). To reduce the costs they will probably open lots more full-SM stores, but that won't make supermarketing any easier for them. If they use the traditional supermarket manning structure it will cost them lots more in staff - if they use their monkeys-peanuts model it will not work. High stock-out rate, and / or big losses in dumps - or embarrassment when customers buy stuff that should have been dumped.
Hence a hit on profits and a falling share price. Maybe it's all a play to get taken over by Tescos or Aldi.
WHS is now the biggest seller of one of the hottest items in the youth market. Guess what it is and think what it means about the pulling power of The Warehouse?
Sniper, as DM would say, who cares? You really should start up your own quizz thread. You have many questions but offer little answers or the wrong ones.
Sniper lets see how good you are. Pop quizz. Im convinced i know the direction of the Warehouse over the next 10 years, do you? If you can answer that then you will have a good indication on a potential investment stratergy. If you get really stuck i will offer you 1 clue.
FYI. You are probably right Sniper. I dont have a clue. But by my own admission i therefore can never think i know everything. If i ever start to believe that then that will be the time i will get thumped.
Now, i will give you a clue. Tesco. Its more abstract than you think.
Now to a different point(no aimed at you Sniper). How care the red sheds improve there customer service? ie speed up there process for getting the customers through the till area. To me this is one of the most exciting aspects. Just like how people got attracted Mackers, Wendy's et people will contiune to demand quicker service without compromising in other others. In the next few years i believe that technology can play a big part. This wont be done by the slow scanning system they currently have like any other retailer. So the next 10 years will provide some great technology in this area.
In terms of self checkouts, which are being trialed recently, I believe there are some incremental gains in cost savings to be made......RFIDs may also provide some additonal gains in both cost savings and improved logistics strategies, but I think we're still a good ways off, in my opinion, more likely to be 10 years or more, rather than less in regards to RFIDs.Quote:
quote:Originally posted by lanenz
FYI. You are probably right Sniper. I dont have a clue. But by my own admission i therefore can never think i know everything. If i ever start to believe that then that will be the time i will get thumped.
Now, i will give you a clue. Tesco. Its more abstract than you think.
Now to a different point(no aimed at you Sniper). How care the red sheds improve there customer service? ie speed up there process for getting the customers through the till area. To me this is one of the most exciting aspects. Just like how people got attracted Mackers, Wendy's et people will contiune to demand quicker service without compromising in other others. In the next few years i believe that technology can play a big part. This wont be done by the slow scanning system they currently have like any other retailer. So the next 10 years will provide some great technology in this area.
Walmart's success with RFIDs will be a good indicator of how likely success will be if local/regional companies develop RFID based strategies.
I reckon RFIDs are like the internet circa 1996...lots of overpromising and underdelivering, but will eventually live up to its promise.
Ann out looks like a turn around of sorts ,revised profit as well could be another rebirth?
Earnings Guidance 6th July 2006:
The Directors of The Warehouse Group Limited have revised upwards the expected after-tax earnings for the year ended 30 July 2006 to between NZ$95 million and NZ$99 million including profit on property divestments of NZ$1 million but before losses attributable to disposal of The Warehouse Australia. The previous range was NZ$83 million to NZ$88 million. Reported after-tax earnings are expected to be between NZ$28 million and NZ$31million.
The full year financial results and the fourth quarter sales announcements will be released on
Friday 8th September 2006.
Full text of the announcement:
http://www.nzx.com/market/market_ann...pany?id=133739
Fascinating that an upgrade of this magnitude for a company as significant as wHS hardly gets a mention. Looks like the turnaround has finally started to arrive.
Disc - Sold my modest holding to Foodstuffs the other week
Apple iPods.Quote:
quote:Originally posted by sniper
WHS is now the biggest seller of one of the hottest items in the youth market. Guess what it is and think what it means about the pulling power of The Warehouse?
That Warehouse - she has some serious pulling power. Other brands are queuing up for the Warehouse to sell their products - it is about maximum customer interface.
The hypermart set-up allows the Warehouse to stretch or shrink its product range and offering to optimise sales and margins.
You heard it here first. ;)
How many Hypermarts have the got so far? This will take some time won't it. My local WHS still sucks and they never have the bargains they advertise. Limited stock runs to tempt. Very frustrating. :( I sold to soon and its just sour grapes :( but I'll believe it when they report it. I find other stores have beaten WHS on price and quality and thats why I sold :( before the Foodstuffs buyin.Quote:
quote:Originally posted by sniper
Apple iPods.Quote:
quote:Originally posted by sniper
WHS is now the biggest seller of one of the hottest items in the youth market. Guess what it is and think what it means about the pulling power of The Warehouse?
That Warehouse - she has some serious pulling power. Other brands are queuing up for the Warehouse to sell their products - it is about maximum customer interface.
The hypermart set-up allows the Warehouse to stretch or shrink its product range and offering to optimise sales and margins.
You heard it here first. ;)
Treetops
up 10% in a week and 800,000 through today at $5.00. Something on the boil again?
Prob on the back of those takeover rumours of Coles in OZ ...... the US takes OZ and NZ by storm
Well someone is buying up large, another mil through at $5.00. And there are some happy sellers no doubt.
Volume now just tipped over 5m, 3rd biggest day in three years surely this cant go by without some market news. Great to see an SP lifting from the $3 lows.
Sense in Foodstuffs' Warehouse play
25 August 2006
By DAVID HARGREAVES
If at first, the idea is not absurd, then there is no hope for it, Einstein once said.
While nobody went quite so far as terming Foodstuffs' acquisition of a 10 per cent stake in the Warehouse "absurd", it would be fair to say a number of observers didn't really see the point.
Well, let this observer be the first to say: now I get it.
In the little over two months since Foodstuffs, the country's leading supermarket business, launched its market raid on discount retailer the Warehouse, moves have developed that could change the whole face of the trans-Tasman retail scene.
It now appears that in a short space of time Australia's two retail giants Coles Myer and Woolworths could both be in the hands of overseas owners,
with deep pockets and limitless ambition.
Putting either or both of Coles Myer and Woolworths in the hands of global players increases the likelihood of serious onslaughts on the New Zealand market.
It is clearly this possible scenario that drove the Foodstuffs decision to invest in the Warehouse rather than as was widely thought, worries about the Warehouse making inroads into Foodstuffs' 57% market share.
The Warehouse is potentially pivotal in any attack on our market from the global players.
It has a combination of excellent, large sites and a geographic spread that could not be matched by any retailer starting from scratch.
Of course, a 10% holding in the Warehouse offers no guarantees for Foodstuffs. If, and it remains a big if, the Warehouse's founder, Stephen Tindall, can be convinced to sell his 52% stake then control of the company can be seized with one stroke of a pen.
But Foodstuffs can block a full takeover, and would be assured of a seat around the bargaining table.
AdvertisementAdvertisementTindall knows the value of his business.
It would be difficult to see him selling for less than around 800c or 900c a share.
So even if Foodstuffs felt ultimately it had to sell in such a situation it might be looking at a profit of up to $125 million on an original investment of just over $150m.
That would give it a nice war chest with which to take on its new competitors.
But that starts to look like a worst case scenario.
The injection of international giants into the mix increases the possibility of a Kiwis versus the world mindset developing. It is just possible that from the very frostiest of beginnings a closer relationship may yet be forged between the Warehouse and Foodstuffs an alliance against the big bad wolves from overseas.
The possibilities are virtually limitless and even the industry participants probably don't know yet how it will all pan out.
But Foodstuffs has bought itself a little bit of insurance and shown the kind of forward thinking that means you take it lightly at your peril.