PRG-Noel Leeming IPO

[wsheridan]

http://stockwatch.nzherald.co.nz/announcementdetail.asp?GMC=100&ArticleId=100055


Have I missed comment on this?

I'm surev it will be overpriced but as a PRG holder that's okay :D

I think this is one Joe Public will be hungry for - especially without Losing and Giving in the IPO.

I wouldn't want to be a Losing and Giving worker at the moment [B)]

[willy_wonker]

They will find it tough going rasing money in this enviroment. The two current retail floats listed badly, PRG & FST. There are over supply of retail IPOS coming on stream.

Willy will not participate in this one.

[marinesalvor]

Just wondering how stupid many of these IPO floaters actually think the punters are

Its just stagering - we are constantly hit by people wanting to float mediocre companies to basically bail them out of expensive bank debt to cheap equity debt but dressed up as a "too good to miss" opportunity - give us a break!

Tribe Marinesalvor will not be participating...

[Halebop]

I'll wait 'til I see the price, terms and structure before making my mind up.

[MeNoBatty]

Raises a number of questions about PRG - selling of a successfull asset, etc. Seems money slated for UK problem child. PRF has already had to bail them out once.

To early to make a call as price and terms could be favourable depending on how desparately they need the cash. See Promina float and how desparately Royal Sun needed the dough. How much PRG retain will also be of interest (and possibly concern).

[whatsup]

Forgive me am I missing something isnt PRG a LISTED company?

[willy_wonker]

PRG looks like they are in Dog Doo Doo.

Has any of the Eric Watson listed companies perform at all in the last few years?

[wsheridan]

Interesting to see quite so many assumptions being made about the state of PRG despite the fact that it is listed and the accounts are available for all to see.

Obviously we need to wait to see pricing before valuing this float ..... but the informed investor sentiment is about where I'd expect it to be. [:0]

[Burgerbun]

Unbelieveable

The UK acquisition has been in PRGs hands since SEPTEMBER 03

You give WHS three plus years of hope and still keep harping on about how wonderful they are...well some of you do.


They say its on track.....this is a huge business! just over 6 months and some are calling it a problem child. Unrealistic!

If you look at PRGs track record, they HAVE been very sucessful with their brands.


Anyway, looks like the med term downtrend is broken, abate on small VOL.


Some of you couldnt work your way out from under a wet bus ticket.[:p]

WW, you are a foolish man. Thought you were a LT PRG man

[willy_wonker]

C9, I just know when to cut my lost.

I too had high hopes for Powerhouse, but inside sources are saying very bad things about the operations in London.

[thereslifeafter87]

What a fantastic move!

You have to admire eric watson for business nous...

Does anyone remember the document approved at an annual meeting a while ago allowing PRG losses to be set off against other CUllen companies?

This way, he gets all the capital tied up in B&B and NL, plus all the cashflow from PRF (the real profitable operation of this group), plus commitments from the new coy to continue using PRF (obviously), and he gets to set off all powerhouses losses (now greater without the offsetting effect of B&b & NL profits) against his other companies!

I think a standing ovation is in order.

thereslifeafter87 - pleased I'm not a PRG holder

[wsheridan]

quote:Originally posted by willy_wonker

C9, I just know when to cut my lost.

I too had high hopes for Powerhouse, but inside sources are saying very bad things about the operations in London.


Do you mean within Powerhouse or its competitors. Somehow I don't think competitors will have nice thiongs to say[:p]
And if its current employees - let's remember they are going through a periofd of cultural adjustment. [:0][B)]

[mikescott]

Selling good things to be keeping bad things? This Mr Watson he be one step away from going under if suchj is strategy. Company go with him too. But I read he clever man so clever man he makes others pay. He safe.

[willy_wonker]

PRG was the only Eric Watson company I invested in recently and it turned out to be a bad smelling custard. The reason I bought into PRG was that I like the retail outlets and the finance arm. Now they are selling good assets to cover lost making bad assets... ouch ! Has any of his public companies made any money for the minorities?

When Phil Newland left the board, the writing was on the wall.

Once bitten twice shy.

[clearasmud]

eric watson is a risk taker and his future net worth will hinge on powerhouse turnaround.I doubt the fundermentals for B&B and NM make attractive holding.Bendon would also be a jewel

[Barrel Scraper]

Are the entire companies to be floated or a part there of ?
BGR could look for a majority or full holding .....in one or both ?

[whatsup]

So what does it make the price of PRG once the exercise is completed , the net raised via the IPO + the value of Pac Retail Finance -which is what? + odds and sods (very much SODS from what I can gather)less going forward liability of Powerhouse (does it have any value as at present due to cash drain) + entrepreneurial value of EW (which is WHAT)? divided by PRG shares on issue.Any ideas/thaughts!!!

[SEC]

quote:Originally posted by thereslifeafter87

What a fantastic move!

You have to admire eric watson for business nous...

Does anyone remember the document approved at an annual meeting a while ago allowing PRG losses to be set off against other CUllen companies?

This way, he gets all the capital tied up in B&B and NL, plus all the cashflow from PRF (the real profitable operation of this group), plus commitments from the new coy to continue using PRF (obviously), and he gets to set off all powerhouses losses (now greater without the offsetting effect of B&b & NL profits) against his other companies!

I think a standing ovation is in order.

thereslifeafter87 - pleased I'm not a PRG holder



What is there stopping the spun-off Noel Leeming and B&B to say sod off to PRF and use another finance company? That would really fu*k PRG.

I'm sure EW won't let that happen and he'll tie the spin-off company into some onerous agreement where it has to use PRF for years to come. EW will still try to keep his snout in the spin-off company cashflow trough.

SEC

[thereslifeafter87]

Exactly SEC,
thats what I'm saying...

[SEC]

quote:Originally posted by SEC

What is there stopping the spun-off Noel Leeming and B&B to say sod off to PRF and use another finance company? That would really fu*k PRG.

I'm sure EW won't let that happen and he'll tie the spin-off company into some onerous agreement where it has to use PRF for years to come. EW will still try to keep his snout in the spin-off company cashflow trough.

SEC


Well what a fu*king surprise Watson has kept his snout in the Noel Leeming cashflow trough via a 10 year exclusive agreement for PRF as part of the terms and conditions of the trade sale.

You're right TLA87, a standing ovation is in order for EW. An excellent example of asset stripping to obtain an infinite return on equity.

Shame about where the proceeds are going though. Things are cut-throat in the retail industry over here and even the well established retailers are have announced profit downgrades.

SEC

[marinesalvor]

one reason why I dont invest in anything EW - dont even cheer for the Warriors...

[willy_wonker]

I agree with you MS.

Once bitten, twice shy.

[beacon]

funny how it says in the PRG buyback notice -
PowerHouse is forecast to incur losses of about ?13 million - ?14 million
(NZ$35 million - NZ$40 million) for the six months to 30 September 2004.

Buyback is a good idea, but many other things not going right for EW. Is the ? saying something to the superstitious in me, or is it ... premonition

[wsheridan]

I don't believe the Powerhouse situation is any worse than expected ... in which case why do people think things are going so bad? Buying distressed assets is what made Graham Hart our richest man.

[beacon]

fair dinkum wsheridan. But PRG is acknowledging ...
This compares with the original estimated loss of ?8 million, and reflects in
part the low trading season.

[Bling_Bling]

I suppose if one wants to take a punt thne one can make good money if Powerhouse can get their act together. But then the question is, do you still trust the promoters?

[wsheridan]

quote:Originally posted by beacon

fair dinkum wsheridan. But PRG is acknowledging ...
This compares with the original estimated loss of ?8 million, and reflects in
part the low trading season.



agreed, but as far back as Januaryt they acknowledged loss was higher than initially expected. Cretainly they see no funding issue

[mikescott]

WS, what else would you expect PRG to say? And let's see if PRG will genuinely buy back those junk notes and if so, how much.

Eric treated the mug investors and punters (Advantage, Strathmore, RMG, Eldercare etc) who worshipped at his feet from 1998 to 2001 with the contempt that they richly deserved. Remember McCollum Print?

You think he has changed?

What has changed is that the UK is screwing him big time for a change. Fancy putting in $117 millions so far into a bleeder.

Powerhouse cost $48m to buy, bled $45m in the first reporting period and now will lose another $35m to $40m. And the forecasts right from day 1 of the purchase from PRG have been proven wrong, wrong and more wrong time and again.

[clearasmud]

Is the Powerhouse going to fry Eric and his followers[?]

[Steve]

quote:Originally posted by minder

...let's see if PRG will genuinely buy back those junk notes and if so, how much.

IMHO I don't think they will buy much, if any...All just smoke to try and improve the note price and lower the YTM to something respectable. Simply make an announcement and let the speculators do the work...

[Toulouse - Luzern]

Many investors say they will not invest in EW or Fay Richwhite companies.

Why?

Is it track record?

[duncan macgregor]

Toulouse Luzern, In this game read between the lines rich people get there by beating up little people. Macdunk

[mikescott]

Beg to disagree, MacDunk.

Small people beg to make the rich richer by worshipping them - nobody asked anyone to invest in EW or FR related businesses or companies.

Look at 42 Below or Fools-To-Be. ;)

[duncan macgregor]

MINDER, WE are both right nobody asks anyone to invest but they still get beat up. What amuses me is they all line up for the next hiding, making excuses for the last one. Macdunk

[winner69]

quote:Originally posted by Steve


quote:Originally posted by minder

...let's see if PRG will genuinely buy back those junk notes and if so, how much.



Maybe they need to tell Mrs Jones et al that that $10,000 investment they have with PRG is now worth only $9400 ....

.... and better sell back to the company before Ross Investments offers a pathetic $8500

[winner69]

So PowerHouse losses to be NZ$35M - NZ$40M for the first 6 months compared to a forecast loss of NZ$21M

Some forecasting - even allowing for the low season which we assume was allowed for in the forecast.

Latest forecasts for the next few years seem to suggest that this six monthly period is always going to be a problem for them.


Like they say they are going to 'to break even in the second six months to 31 March 2005.' Good stuff ... far better than last year and all that.

Then they say that that they are going to 'to achieve a further improvement in trading in the 2006 year' .... which has to mean a big 1st half loss followed by a small 2nd half profit.

And for 2007 the guidance if 'a full-year breakeven' ..... which has to mean (assuming consistent improvement is made) a smalller 1st half loss but probably reasonably significant and improved 2nd half profit to offset the 1st half loss.

But on the basis of the past rhetoric and actual results against forecast you would have to say that even the latest more promising forecast has more downside than up.

Sounds like to me they have a business model that is structured for high season sales but that for nearly 9 months of the year sales are in low season mode - ie they need more critical mass.

Getting this extra critical mass (even from a very low share base)in a very competive market is always difficult and always needs more marketing spend and puts margins under pressure. This assumes that Powerhouse have nothing to really differentiate themselves from their competitors.

Good luck to them anyway

Has anybody done any numbers what PRG is really worth with whats left since getting rid of Bond and Bond etc?

Be interested to see what the market is valuing Powerhouse at - seeing PRG is an investment company the sum of the parts should equal the whole or sort off. But thinking aloud as PRG still has about the same market cap as a year ago it looks like that Powerhouse plus cah on hand is valued at about the same as Bond & Bond and Noel Leemings etc combined.

Some of you out there love 'free options' that occassionally exist - maybe Powerhouse is one of these

[mikescott]

Powerhouse is not a free option - it is a bad investment made by Watson without the benefits that come from screwing minorities. So there's only one way for it to go - DOWN.

[winner69]

Does sound a bit like the RMG story ... once we do this and this settles down and good management in place and relationships built up and structures in palce ... all will be right

AND they do say there will not be the need for future cash injections ..... yeah

[dingdong]

Since Eric Watson is a god I invest in all his ventures and am proud that my money will be sucked down a Powerhouse gurgler. And I don't care that he will probably come out of the Powervortex richer than ever since I am his faithful unworthy disciple.

[Bubble Boy]

quote:Originally posted by winner69



Has anybody done any numbers what PRG is really worth with whats left since getting rid of Bond and Bond etc?




THe share price will be worth less than the cash they receive from the sale. A bit like GEN realy. The market seems to thinke ther will be more bleeding before punters see the cash, hence the negative value of the other assets.[xx(]

[Mr_p_yu]

From Retail Week in the UK recently,

Resurgent PowerHouse strengthens its top team
By Neil Craven

PowerHouse has appointed three directors to its board as the business continues to strive to break even.

The business was rescued from administration a year ago today, when incoming chief executive Peter Halkett said PowerHouse would break even in 12 months.

Chris Onslow has been appointed sales director and Brendan Dorrian as business development director. Rebecca Hackett has been promoted to the role of purchasing director, after being appointed general manager for commercial performance last month.

Onslow was sales director at Thomas Cook until last November. He previously held director roles at Caudwell Group, Adams, George and Burton Group.

PowerHouse commercial director Nigel Samuel has decided to leave the business, following the recruitment of new board members. Samuel’s departure, described by Halkett as “amicable”, leaves the retailer in search of a marketing director.

“Chris will be driving the sales team and developing the sales culture of the business,” said Halkett. Dorrian will be responsible for the Internet and other initiatives.

Halkett said the initial plan to bring the business to breakeven in the first 12 months was “one or two months behind schedule”. He said: “We had a tough time in April and May, but most of the problems were self inflicted.”

He added: “We’ve been trading well over the past three months. In the past 12 to 14 weeks we’ve had a steady week-on-week build.”

Halkett said the board of parent Pacific Retail Group came to the UK to meet the management four weeks ago and were “delighted” with progress.

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Sort of explains why the 1h result for powerhouse is worse than expected.