WHS - Warehouse Group

[winner69]

The Warehouse is in the herald ... and their name is mentioned in the same paragraph together with amazon, alibaba, wechat and weibo. Big digital plans, if it works out great things to come.

https://www.nzherald.co.nz/business/tech-takeover-nick-grayston-on-warehouse-groups-growth-strategy-inspired-by-amazon/CIQWRDAKZRKBI3DEN4HJ5EOZQM


[paywalled]

Good stuff eh BP ...ecosystems way to go

Also good to see Nick out there touting the TWG ....hopefully investors might get interested ...although sort of knowing Nick it’s just an ego trip ..read about him and not the business

[winner69]

They always a bit coy how much in the way of revenues TheMarket generates.....rather tout the number of skus they have etc etc

But if you look at their sales reports and assume that Other sales is as they say in small print, being 'Other sales include 1-day and commission and other revenue in relation to TheMarket.com' then TheMarket.com not doing too well

Q3 revenue/sales being $37m this year v $41m last year v $44m the year before .....hmm

Suppose it is really a case of building it and then the punters will come in droves ....big time

Interim Report Segment numbers show declining sales /revenues and declining losses

Breakdown of these 1-day sales could be interesting

[Beagle]

https://www.nzherald.co.nz/business/tech-takeover-nick-grayston-on-warehouse-groups-growth-strategy-inspired-by-amazon/CIQWRDAKZRKBI3DEN4HJ5EOZQM/ Paywalled
Interesting article articulating their growth strategy.

[winner69]

In that Herald story - Grayston says the group can dedicate more time to what he considers the fun stuff

Plenty of spare cash and doing fun stuff ....not always in shareholders best interests

[Beagle]

I think they've done a good job of turning this ship around so far and their prospects for further rationalization and enhanced operational systems are good.

[LaserEyeKiwi]

They always a bit coy how much in the way of revenues TheMarket generates.....rather tout the number of skus they have etc etc

But if you look at their sales reports and assume that Other sales is as they say in small print, being 'Other sales include 1-day and commission and other revenue in relation to TheMarket.com' then TheMarket.com not doing too well

Q3 revenue/sales being $37m this year v $41m last year v $44m the year before .....hmm

Suppose it is really a case of building it and then the punters will come in droves ....big time

Interim Report Segment numbers show declining sales /revenues and declining losses

Breakdown of these 1-day sales could be interesting

have you tried just asking investor retaliations how it works? They were very good about responding to my queries last week about how warehouse stationary revenue inside warehouse stores was accounted for.

Isn’t the market purely a digital storefront? They don’t have any inventory themselves, and instead the sales are all from either other WHS businesses (TWL / WS / NL / T7) or from 3rd party sellers (for which they get a commission on sales)? I guess the question to ask is if WHS assigns revenue to the market or not as commission from other WHS businesses.

[winner69]

https://www.nzherald.co.nz/business/tech-takeover-nick-grayston-on-warehouse-groups-growth-strategy-inspired-by-amazon/CIQWRDAKZRKBI3DEN4HJ5EOZQM/ Paywalled
Interesting article articulating their growth strategy.

Under the guise of ‘growth’ but most of it is doing things just to stay in the game (as they say). Change in a changing world etc etc etc

Maintaining the much improved margins of late might be a challenge ...but key in growingvearnings.

[Beagle]

Under the guise of ‘growth’ but most of it is doing things just to stay in the game (as they say). Change in a changing world etc etc etc

Maintaining the much improved margins of late might be a challenge ...but key in growingvearnings.

I think they are excellent buying. Balance sheet is in top shape and the strong currency will ensure robust margins.

[Soolaimon]

I think they are excellent buying. Balance sheet is in top shape and the strong currency will ensure robust margins.

Bit of a downward wobble at the moment???

[Beagle]

Bit of a downward wobble at the moment???

Keeping the faith, heaps of positive momentum in the business :t_up: I would suggest some traders are arbitraging / profit taking from the recent placement at $3.27, nothing more too it than that.

[Louloubell]

I agree. All the fundamentals are looking good. Plus, what will they do with their cash?

[Beagle]

I agree. All the fundamentals are looking good. Plus, what will they do with their cash?

Start a buy-back of their own shares whereby the Warehouse where everyone gets a bargain includes the company getting one itself ;)

[winner69]

Just looked at Nick’s horoscope .....it’s all looking good for his ‘business success’

A blast from the past will come and help you in you setting long-term vision and goals for your business. Be open to the possibilities! This is due to an activation from the Gemini sun and North Node making a close connection in your eleventh house. This is the perfect time to tap into past contacts and set up ways to reconnect. Positive leaps and bounds can be made at work right now. Transformative communication could come any day. But whatever have fun implementing your strategy

Share price 4 bucks by end of month ......was $2.50 odd when Nick was appointed

[winner69]

Start a buy-back of their own shares whereby the Warehouse where everyone gets a bargain includes the company getting one itself ;)

You and your love of buybacks will get you into some sort of trouble one day

[winner69]

Keeping the faith, heaps of positive momentum in the business :t_up: I would suggest some traders are arbitraging / profit taking from the recent placement at $3.27, nothing more too it than that.

WHS share price rocketing up today

That's good

[Sideshow Bob]

WHS share price rocketing up today

That's good

Up 2c to 341 at the moment.

Maybe a very small rocket??

[Panda-NZ-]

85k shares @ $3.50 on sell side to clear first

[Panda-NZ-]

Will Costco be doing online trading? If the 25-30% lower price is apparent here then online trading could take a good bite out of everyone's lunch.

$100 membership fee for one store.

In Auckland which is overcrowded and hard to get around in. who will be interested in that?

[iceman]

$100 membership fee for one store.

In Auckland which is overcrowded and hard to get around in. who will be interested in that?

Cheap as. These guys know what they're doing.

[bull....]

whs to be included in NZ50 ....... next time me think. volumes traded each day now make it the best bet

[Beagle]

Cheap as. These guys know what they're doing.

Honestly mate, you have no idea what its like to get around Auckland day after day after day...it grinds you down to the point where you really can't be bothered and just shop in your local area. Quite apart from that is the cost of getting around Auckland. I might stop in there when I'm over that way visiting my friend in Westgate but if they're asking to to subscribe at $100 per annum just for the right to shop there....that's simply not going to happen and I think you'll find the vast majority of Aucklanders will feel the same way.

[Panda-NZ-]

You would need a light truck to stock up at the one costco location too. Sounds like drudgery

[LaserEyeKiwi]

Copying this comment from HLG thread:


Not according to this but who knows. Latest For Bar Review..

We pick that there will be no changes for the upcoming S&P/NZX June 2021 quarterly index review (headline indices).Official outcomes of the review will be announced close of market Friday, 11 June 2021, with an effective date, close of
market Friday, 18 June 2021.
Figure 1. June 2021 Review: The Forsyth Barr Pick
Index Enter Exit Expected Weight (rank)
S&P/NZX 10 no changes n/a
S&P/NZX 20 no changes n/a
S&P/NZX 50 no changes n/a
S&P/NZX 50 Portfolio no changes n/a
Source: Forsyth Barr analysis
The current status
The recent sell down of 31.6m WHS shares by Foodstuffs has boosted the WHS ranking (six-month average market cap) and by our
calculations will rank as the highest non-member post the upcoming June 2021 index review.
Figure 2 outlines the current rankings for inclusion/exclusion for the benchmark S&P/NZX 50 indices. At this stage, we see no obvious
near term changes ahead. The six-month average market cap automatic entry level to the benchmark index is currently above $430m
with the exit level below $283m.
Figure 2. Current Rankings for S&P/NZX 50 Index Inclusion/Exclusion
Ranking Code Current status 6-mth average price 6-mth average market cap
42 SKO S&P/NZX 50 Member $6.04
43 FSF S&P/NZX 50 Member $4.56
44 (entry level) VGL S&P/NZX 50 Member $1.88 $429.63m
45 SAN S&P/NZX 50 Member $4.76 $391.98m
46 RBD S&P/NZX 50 Member $12.47
47 SML S&P/NZX 50 Member $4.20 $376.38m
48 WHS* $3.20 $356.28m
49 TLT $6.63 $349.97m
50 HLG $7.19 $343.31m
51 ERD $4.84 $332.77m
52 NPH S&P/NZX 50 Member $3.44
53 THL S&P/NZX 50 Member $2.47 $299.91m
54 SKT S&P/NZX 50 Member $0.17 $298.05m
55 MFB** $1.56 $283.78m
56 (exit level) BGP $5.42 $277.50m
57 TRA $3.30 $214.67m
58 CVT $3.24 $174.44m

I do find it weird they have WHS as a market cap of $356m, when it has a market cap today of $1.17 billion (regardless of the free float size - it dwarfs any other company mentioned in both size and importance).

[SBQ]

$100 membership fee for one store.

In Auckland which is overcrowded and hard to get around in. who will be interested in that?

$100 is nothing when you could save that much on a $1,000 purchase at Costco. We are not talking about a 5 or 10% discount in savings here. This is at near wholesale pricing so you would be buying items that are near the price that well say Food Stuff or other big players that are buying at. Ie. the Fontera selling milk to Pak N Save can also sell to Costco - work out the profit margin?

NZ's habit of shopping 2 or 3 times a week to buy grub will have to change if they venture to Costco. Factor a budget of spending for at least 1 - 2 weeks of supplies ; therefore the hassles of driving out that way would be worth the effort. Of course those that live way too far away need not apply. For eg. in Anchorage Alaska they have 2 Costco places for a population of 280K.

What i'm skeptical is will the NZ producers sell to Costco? Many would have lock in plans with their current buyers though i'm sure over time that will change.

[Panda-NZ-]

Costco is relatively new to a high consumption tax so they will enjoy that experience.

0% in US and 5% in canada.

[LaserEyeKiwi]

Costco is relatively new to a high consumption tax so they will enjoy that experience.

0% in US and 5% in canada.

most states in the US have a sales tax. Amount varies state by state.

also worth pointing out that the vast majority of Costco sales are from segments that WHS doesn’t have a large exposure with: food is most of their sales, followed by “Ancillary products” (pharmacy, gasoline sales), and then their two smallest revenue segments are what WHS would consider as competing areas: “hardlines” (hardware, appliances etc) & their smallest revenue segment is “soft lines” (small appliances, clothing etc) which is WHS bread and butter.

I would think it would be the food retailers that would be most bothered by Costco entry.

[Beagle]

Please forgive me having a massive yawn here https://www.bing.com/images/search?view=detailV2&ccid=MxMzTfRM&id=AF40D1C03C5A3336FDB030DF5465600E222B18FB&thid=OIP.MxMzTfRMru85wJxPIqYm7wHaJ3&mediaurl=https%3a%2f%2fs-media-cache-ak0.pinimg.com%2f736x%2f1a%2fc1%2f63%2f1ac1633283d ac7d14c6628059afe1ce4.jpg&cdnurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR3313 334df44caeef39c09c4f22a626ef%3frik%3d%252bxgrIg5gZ VTfMA%26pid%3dImgRaw&exph=981&expw=736&q=beagle+yawning&simid=608003937125355961&ck=C405E5DC98A0850D226EF8A02538B8DA&selectedIndex=0&FORM=IRPRST&idpp=overlayview&ajaxhist=0&ajaxserp=0
Heard it all before.... H&M, Zara, XYZ, ABC is going to destroy HLG.
The reality of life for most Kiwi families is they live one paycheck to the next and most are incapable of buying in bulk...ask me how I know...40 years of being an accountant.
I think this is really small potatoes in terms of its effect on WHS...lets get back to talking about WHS's really strong balance sheet and exceptionally strong cash position and its truly compelling investment metrics.

[X-men]

I bloody agree with that Beagle! Majority kiwis are not buying in bulk...most of kiwis live on payday after another...

[Gunner]

And it's really hard to break into a small far away market like NZ. Companies like the Warehouse have huge market share in prime locations throughout NZ. Will little nz really excite Costco? I highly doubt it. Select locations in Auckland will interest them but not the rest of NZ imo.

[Panda-NZ-]

Yes and as previously stated it's mainly food items where they offer savings.

You can't bulk buy a fridge or coffee machine etc.

[Habits]

Why is it that WHS staff do not check self service sales dockets like other retailers do. Is that a security risk for theft or do the electronic security pick it up. To me it seemed quite slack attitudes tonight with 4 staff members, some older, standing gossiping and with their back turned for ages.

[LaserEyeKiwi]

Why is it that WHS staff do not check self service sales dockets like other retailers do. Is that a security risk for theft or do the electronic security pick it up. To me it seemed quite slack attitudes tonight with 4 staff members, some older, standing gossiping and with their back turned for ages.

‘The extra cost required to have multiple staff checking receipts in each store is likely far higher than the cost of any “stock leakage” from people not paying for products. It would be better for them to eventually install scales on the self service kiosks (Kmart seems to do it ok), and eventually employing AI vision cameras to alert staff to anyone who might not have scanned an item.

[jg8512]

‘The extra cost required to have multiple staff checking receipts in each store is likely far higher than the cost of any “stock leakage” from people not paying for products. It would be better for them to eventually install scales on the self service kiosks (Kmart seems to do it ok), and eventually employing AI vision cameras to alert staff to anyone who might not have scanned an item.

tis an interesting question, Bunnings always seem to have someone on the door - even early-ish Monday morning when there is NO-ONE in store. I can't believe that a person seemingly-permanently stationed on the door at such times is a good use of their wages (+overhead), but they still do it. I suspect redsheds attracts more than its share of shoplifters and it is not clear to me that WHS have ever taken much action to minimise it. in fact, WHS have gone the other way ... the ammount of self-checkouts much be taking serious wage costs out of the business (but at the expense of more non-payment). GLTAH

[Joshuatree]

Being a recent new shareholder i may test this out, see if there is a clever system that sets an alarm off or something if an item is not actually purchased.

[winner69]

Being a recent new shareholder i may test this out, see if there is a clever system that sets an alarm off or something if an item is not actually purchased.

A while ago we put things through and were charged quite a lot ...the previous person hadn’t ended their transaction (ie not paid) and added on to ours ...took a while for them to sort it out

They check the cctv they said

[jg8512]

A while ago we put things through and were charged quite a lot ...the previous person hadn’t ended their transaction (ie not paid) and added on to ours ...took a while for them to sort it out

They check the cctv they said

LOL, not much point checking the CCTV when the previous would-be buyer has left ... and the next person is at the check-out !

I remember Stephen Tindall explaining his philosophy when opening his very first store. He spent half his money ($25k was it?) on good cash registers (and the other half on stock) because he thought it was essential that he knew well what his customers were buying. Despite his getting the importance of good systems, the WHS of today always seems to me to have under-invested in smart business systems. Ie, they seem to have no idea of stock levels (lots of something, nothing of something else), what is available in any given store, and the payment terminals seem to be some quirky technology you see nowhere else, etc.

Maybe that's my prejudice shining thru ...

[Beagle]

Being a recent new shareholder i may test this out, see if there is a clever system that sets an alarm off or something if an item is not actually purchased.

You have the advantage of being old enough you could claim to be senile if they catch you out :p, sorry, couldn't resist :D

[Panda-NZ-]

Plus he is simply too old to understand the technology of a self-service checkout :mellow:

[Joshuatree]

I'm fine with the self service, except when I tried to scan myself it rejected me,so I crawled up onto the shiny little platform to get weighed,no luck there either,gave up,walked home then realised I had a bundle of giant Toblerone under my arm, ....... Then I remembered I was still wearing the Tradie pro underpants ,I had tried on,couldn't even find the changing room!.... Some days you just can't win.....

[LaserEyeKiwi]

LOL, not much point checking the CCTV when the previous would-be buyer has left ... and the next person is at the check-out !

I remember Stephen Tindall explaining his philosophy when opening his very first store. He spent half his money ($25k was it?) on good cash registers (and the other half on stock) because he thought it was essential that he knew well what his customers were buying. Despite his getting the importance of good systems, the WHS of today always seems to me to have under-invested in smart business systems. Ie, they seem to have no idea of stock levels (lots of something, nothing of something else), what is available in any given store, and the payment terminals seem to be some quirky technology you see nowhere else, etc.

Maybe that's my prejudice shining thru ...
https://www.sharetrader.co.nz/blob:https://www.sharetrader.co.nz/87aebbf4-9a00-465f-bac6-03910863255eWHS is in the middle of a vast improvement of multiple company wide upgrades, including inventory management.

12590
12591

[winner69]

Scanning will be so much easier once we get our 5G chip injected

[Mudfish]

No no ...not NPAT ....only adjusted NPAT

Real NPAT much less

Pretty good though

Hey Winner, I'm doing a bit of WHS homework here. Going back a month, profit forecast is for 160m adjusted NPAT. Might be a simple question, but what does the 'adjusted' part mean?

[winner69]

Hey Winner, I'm doing a bit of WHS homework here. Going back a month, profit forecast is for 160m adjusted NPAT. Might be a simple question, but what does the 'adjusted' part mean?

Adjusted profit is what they get when they don't count all the bits they don't think matter (one offs and abnormals like consuyants, restructuring, redundancies, project costs etc etc)

Difference between reported NPAT and Adjsuted NPAT over the last few years >$100m

But Adjusted NPAT supposedly paints a better picture of things going forward --- of course there will never be any more abnormal stuff

[Mudfish]

Adjusted profit is what they get when they don't count all the bits they don't think matter (one offs and abnormals like consuyants, restructuring, redundancies, project costs etc etc)

Difference between reported NPAT and Adjsuted NPAT over the last few years >$100m

But Adjusted NPAT supposedly paints a better picture of things going forward --- of course there will never be any more abnormal stuff

Cheers W. I'm just getting my head around all this. The 'adjusted' bit must be what I'm missing. Otherwise, it looks like low PE, great divi, clear stella future forecast, and everywhere I go people appear to be still spending up a storm paints an awesome picture. I'm seriously questioning what's holding the SP back? Thanks for your reply. I'll keep digging.

[winner69]

Sussed it all out yet Mudfish

Below is summary over last few years

Just worry about the numbers highlighted in yellow ... and the trend

Amazing that the stuff that doesn't matter (adjustments) add up $180m over the years.

[Beagle]

Come on mate to be fair nearly all the adjustment in the 1H FY21 is the wage subsidy, (which according to many on here was doing the right thing) and the rest was restructuring to get more efficient.
Many would claim both these things are positive for the business...(I don't need to repeat my view on repayment of the wage subsidy again...I believe we've all firmly stamped out our opinions on that already).

WHS is in my opinion, on a fundamental basis, the cheapest stock on the NZX. I would buy more if I didn't have a fulsome sized stake already.

[winner69]

Come on mate to be fair nearly all the adjustment in the 1H FY21 is the wage subsidy, (which according to many on here was doing the right thing) and the rest was restructuring to get more efficient.
Many would claim both these things are positive for the business...(I don't need to repeat my view on repayment of the wage subsidy again...I believe we've all firmly stamped out our opinions on that already).

WHS is in my opinion, on a fundamental basis, the cheapest stock on the NZX. I would buy more if I didn't have a fulsome sized stake already.

Was only trying help mudfish out as he asked about Adjusted NPAT

Did tell him to concentrate on the Adjusted NPAT

[jimdog31]

what impact, if any, would ikea coming to nz have on whs?

[X-men]

For those mourning about WHS customer service....go n try briscoe....they are even useless.

[winner69]

what impact, if any, would ikea coming to nz have on whs?

I would say none .... better say negligible though

[Beagle]

I had to give myself a bit of a talking too about this one today. Getting frustrated about its lackluster share price performance against such compelling metrics.
Talk went something like this. Don't be a greedy impatient old mutt. You didn't buy these for quick share price gains in the short term. Medium term these are going to grow earnings very nicely and you'll make heaps, and enjoy fantastic dividends along the way...just because you think they're really cheap it might take some time for the market to embrace them.... have a decent amount of patience you stupid old greedy dog.

Felt better after telling myself off. Do I need help or do others do this sort of "self talk" thing too lol

[Old mate]

I'm a regular self talker:eek2:

[winner69]

Beagle ...just remind yourself that late last year you packed a big sad and sold all your WHS in ‘disgust’ (?) .....and after outlining why percy said something like why bother (with them)

The upgrades seduced you back .....so stay with her this time ....she’s a fine tuned chick firing on all cylinders now ( or something like that)

[Beagle]

Good point Winner.....I need to dig in properly for the long haul and take a really "dogged" approach this time especially seeing as this time I have eight times as many as last year !

[bull....]

reason share price is stalled is because of all the people selling there placement shares for there nickel and dimes. be patient for the overhang to work thru and look forward to the nzx50 inclusion

[alokdhir]

Ok...after seeing all stars so bullish on WHS ...I am getting in from today ...hopefully it will bring luck to all holders ...lol

[Beagle]

reason share price is stalled is because of all the people selling there placement shares for there nickel and dimes. be patient for the overhang to work thru and look forward to the nzx50 inclusion

I agree 100%. Plenty of people arbitraging the placement and milking a 10 cent profit (or thereabouts) on the placement price. The money they brought to the placement wasn't genuine new capital, just in for the trade but what it does do is present a real opportunity for value investors bringing new money to the table now.

[Mudfish]

Sussed it all out yet Mudfish

Below is summary over last few years

Just worry about the numbers highlighted in yellow ... and the trend

Amazing that the stuff that doesn't matter (adjustments) add up $180m over the years.

Hey Winner, finally managed to put some time into this. Great little chart. I did some calculations to work out PEs for NPAT figures and Adjusted NPAT figures. I also, read through reports to try and figure out the reasons for each year's adjustment. I found PEs to have an absolutely huge range when considering adjusted, not adjusted or between years. No consistency whatsoever. I also found, as I think you have pointed out, the one off reasons for the adjustments are large and unpredictable. So.... to try and answer the important question of what are these shares likely to be worth end of July, I've used the belief that WHS will achieve their 160m+ adjusted figure forecast in last update (see no reason to doubt this as we have had no Covid impacts of late and NZ seems stable presently). I have pulled a figure of 50m one off costs out of my rear end (no idea what for, but have used higher end figure, super rough I know). This gives 110m NPAT and on a, plucked, PE of 12, share price of $3.80. This SP just happens to be very close to Market Screener's ave price of $3.83. Probably just a fluke here. Anyway, though I've struggled with finding predicable figures to use, the SP price does stand out as a buy to me. Just one wee question for you, on your chart for H1 2021, you have included a 56m adjustment figure. How did you get that? Cheers for your help. Much appreciated.

[winner69]

Mudfish ....see Slide 18

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/369678/343023.pdf

As I said before just concentrate on the Adjusted Numbers ....the market ignores all that other stuff

[Mudfish]

Mudfish ....see Slide 18

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/369678/343023.pdf

As I said before just concentrate on the Adjusted Numbers ....the market ignores all that other stuff

Ahhh, my bad, was right in front of me. Adjusted Numbers certainly look very good with regards to growth but I can see value in looking at straight NPAT too. Either way, it's hard not to see a SP of 3.60 - 3.90 IMO. Cheers for your help. I'm a happy holder.

[winner69]

Ahhh, my bad, was right in front of me. Adjusted Numbers certainly look very good with regards to growth but I can see value in looking at straight NPAT too. Either way, it's hard not to see a SP of 3.60 - 3.90 IMO. Cheers for your help. I'm a happy holder.

Mudfish ...share price be over 4 bucks next month ....even more if they have ANOTHER upgrade

[Mudfish]

Mudfish ...share price be over 4 bucks next month ....even more if they have ANOTHER upgrade

Now that would be awesome. Cheers Winner

[Beagle]

Have to agree that the opportunities for value investing on the NZX are few and far between. Everything I think is good value I already hold a good or large sized stake in.

I think WHS at the current price is the best value stock on the NZX with the most potential for capital gain in the short and medium term so I hold truckloads already.

[Beagle]

Have to agree that the opportunities for value investing on the NZX are few and far between. Everything I think is good value I already hold a good or large sized stake in.

I think WHS at the current price is the best value stock on the NZX with the most potential for capital gain in the short and medium term so I hold truckloads already.

[Joshuatree]

My brokers last research note has a big drop of in earnings, profit, divis forecast for 2022 after a bumper 2021.

[Beagle]

https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/consensus/ BUY - Average analyst target price $3.83

[Dlownz]

Who's your broker. Might need to change

[X-men]

Joshua is the broker

[winner69]

https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/consensus/ BUY - Average analyst target price $3.83

OMG they have sales and profit declining in 2022 and 2023 doesn’t look much better

Can’t be right

[Beagle]

OMG they have sales and profit declining in 2022 and 2023 doesn’t look much better

Can’t be right

Relax mate, stronger for longer is my call. International travel won't go back to anything like normal for many, many years so people will be staying, playing and spending at home.

[X-men]

Talk of NZ50 inclusion in the news. Exciting!

[Beagle]

https://www.nzherald.co.nz/business/covid-19-coronavirus-nz-avoids-second-pandemic-recession-thanks-to-strong-gdp-data/5PDFSSSDVL6IPOYVUNCDR3DY6U/
Looks like good conditions for WHS to thrive.

[peat]

https://www.nzherald.co.nz/business/covid-19-coronavirus-nz-avoids-second-pandemic-recession-thanks-to-strong-gdp-data/5PDFSSSDVL6IPOYVUNCDR3DY6U/
Looks like good conditions for WHS to thrive.

I was just thinking this morning about anecdotal economic activity from my personal perspective and yeh! everything seems to be humming ... When I went to Welly to see the ballet it was just insane how busy everything was everywhere.... and Palmerston is the same. Last night took ages to get a park in the city and the restaurant was buzzing. I know these things are to a large degree unreliable but if you see enough of it you start to think that it must be telling you something.

I remember a boss of mine who was an old school broker said that way back he used to walk around the buildings in downtown Auckland that were listed companies and he would see if the lights were on and people were doing overtime as evidence of heightened business activity.

[winner69]

https://www.nzherald.co.nz/business/covid-19-coronavirus-nz-avoids-second-pandemic-recession-thanks-to-strong-gdp-data/5PDFSSSDVL6IPOYVUNCDR3DY6U/
Looks like good conditions for WHS to thrive.

Yep steadily getting back to pre-Covid levels

GDP down 2.3% over the last year

Just imagine how well WHS et al will do when economy really picks up

Americans would say March GDP was 6.4% annualised

Cool eh

[Beagle]

Yep steadily getting back to pre-Covid levels

GDP down 2.3% over the last year

Just imagine how well WHS et al will do when economy really picks up

Americans would say March GDP was 6.4% annualised

Cool eh

Great result in the context of what's mentioned in the article

This is despite Auckland being in alert level 3 lockdown for 10 days, and continued border restrictions," national accounts senior manager Paul Pascoe said.

The first quarter of this year was expected to be a tough one for the economy.

It includes the traditional peak season for international tourism and the time that international students arrive. Neither of which happened this year.

[Joshuatree]

"There is a strange belief in certain circles that the future will be e-commerce only and that brick and mortar stores have no value. This is strange because the worlds largest, most sophisticated e-commerce companies are all opening stores."


https://gavin-baker.medium.com/why-category-leading-brick-and-mortar-retailers-are-likely-the-biggest-long-term-covid-d70b8dfadc20

[winner69]

"There is a strange belief in certain circles that the future will be e-commerce only and that brick and mortar stores have no value. This is strange because the worlds largest, most sophisticated e-commerce companies are all opening stores."


https://gavin-baker.medium.com/why-category-leading-brick-and-mortar-retailers-are-likely-the-biggest-long-term-covid-d70b8dfadc20



Thanks JT, interesting article

WHS Ok - Their customer centric ecosystem which includes omnichannel components will serve them well

No worries

[peat]

Thanks JT, interesting article

WHS Ok - Their customer centric ecosystem which includes omnichannel components will serve them well

No worries

hes making it into quite the paradigm change .
and expects these benefits extracted from Covid to be enduring

"Covid has gone on long enough for consumers to form new habits in terms of both where they shop and how they shop."

[alokdhir]

Whats happening in WHS ?? Down on huge volumes :confused:

[allfromacell]

It was trading well until someone impatiently dumped a big parcel moving the price to 3.30 from 3.40 lol, low liquidity stock I guess someone needed the cash

[Baa_Baa]

Whats happening in WHS ?? Down on huge volumes :confused:

After seven months of stellar SP capital gains, the SP topped and is in the third month of decline. The past few weeks will be a conundrum for the 100MA watchers, with a few tests of its support and then consecutive fails (https://invst.ly/v5tw2), leading to today. Pattern looks like a descending triangle or descending wedge, which is short term bearish, support at $3.23?

I wouldn't be holding just for the dividends. 200MA is at about $2.90 in case it goes that low.

[peat]

After seven months of stellar SP capital gains, the SP topped and is in the third month of decline. The past few weeks will be a conundrum for the 100MA watchers, with a few tests of its support and then consecutive fails (https://invst.ly/v5tw2), leading to today. Pattern looks like a descending triangle or descending wedge, which is short term bearish, support at $3.23?

I wouldn't be holding just for the dividends. 200MA is at about $2.90 in case it goes that low.
12614

you should wait until the end of day to draw a daily candle.

[Baa_Baa]

12614

you should wait until the end of day to draw a daily candle.

Technically yes, thanks for the constructive and helpful feedback. We'll see if today the 100MA resists again at EOD.

[Hawkeye]

OMG they have sales and profit declining in 2022 and 2023 doesn’t look much better

Can’t be right

2020 and 2021 have/are going to be amazing years in terms of people buying tech for leisure, things people want but don't actually need, TV Upgrades, Ebikes, Laptop upgrade for work, smart phones, remodeling kitchens etc. it stands to reason 2022 and 2023 would button off a little, however I would think there would still be significant gains compared to 2019.

[Joshuatree]

Topped up,income the priority.

[Baa_Baa]

you should wait until the end of day to draw a daily candle.

EOD now, I'll call it another 100MA resistance fail, though notably on high volume around 3.5 times daily average.

[alokdhir]

Todays closing got muddled due to connectivity problems at ASB and NZX I suppose ....so seems last auctions didn't take place for NZX ??

[Beagle]

The legend KW uses 200 day MA as her go to yardstick. Still in a nice uptrend if one uses the 200 day MA.

[Panda-NZ-]

Topped up,income the priority.

Back to the times of 10% dividend yield again.

Such a bargain :)

[Entrep]

The legend KW uses 200 day MA as her go to yardstick. Still in a nice uptrend if one uses the 200 day MA.

I think better wording would be the stock still looks OK if it manages to stay above the 200 DMA.

https://i.imgur.com/hsAQUhI.png

[alokdhir]

For me first sign of trouble is breaking below placement price of 3.27 ...as that may trigger bigger SL selling of many recent acquirers ...todays closing at 3.33 is second closing at these levels ...it surely needs to go over 3.40 or not make lower lows ...precariously placed at the moment ....both sides possible ...hopefully some positive news breaks it up ....fingers crossed !!!

[Panda-NZ-]

WHS have a history of disappointment behind it.

The strong fundamentals vs market "pixie dust" round 2.

[Hoop]

The legend KW uses 200 day MA as her go to yardstick. Still in a nice uptrend if one uses the 200 day MA.
Yes KW was pure quality and a big loss for Sharetrader and it's members.

The MA200 is TA's version of Bull or Bear Status...The conventional or official status method is a price fall/rise of >20% from top/bottom price...The two discipline methods to determine WHS status change from Bear to Bull happened on the same day mid October 2020 when the share price gapped up to $2.30..spooky eh :)

Best successful Bull status strategy is buy and hold (long term investing) and accumulate during dips. (sailing methods (https://arktoswealth.com/investment/sailing-vs-rowing/))

Best successful Bear status strategy is to stay away and go fishing ......If you hate fishing go find another stock that has Bull Status

For those who think they can beat the market use multiple short term investing "in and out" on the corrections (Note:- Bear market corrections are rallies)... (rowing methods (https://arktoswealth.com/investment/sailing-vs-rowing/))

As you can see from the previous posts WHS status is still a Bull whatever discipline....

Happy Sailing:)
Hoop

[Panda-NZ-]

NZX 50 inclusion could be the only rocket booster needed for this illiquid stock.

[Beagle]

Yes KW was pure quality and a big loss for Sharetrader and it's members.

The MA200 is TA's version of Bull or Bear Status...The conventional or official status method is a price fall/rise of >20% from top/bottom price...The two discipline methods to determine WHS status change from Bear to Bull happened on the same day mid October 2020 when the share price gapped up to $2.30..spooky eh :)

Best successful Bull status strategy is buy and hold (long term investing) and accumulate during dips. (sailing methods (https://arktoswealth.com/investment/sailing-vs-rowing/))

Best successful Bear status strategy is to stay away and go fishing ......If you hate fishing go find another stock that has Bull Status

For those who think they can beat the market use multiple short term investing "in and out" on the corrections (Note:- Bear market corrections are rallies)... (rowing methods (https://arktoswealth.com/investment/sailing-vs-rowing/))

As you can see from the previous posts WHS status is still a Bull whatever discipline....

Happy Sailing:)
Hoop

Going fishing and only investing in Bull cases are not mutually exclusive activities either mate. Always a good day when you catch a good 15kg kingfish and your portfolio goes up 15 kg's too ;)
https://www.fishing.net.nz/

[BlackPeter]

Going fishing and only investing in Bull cases are not mutually exclusive activities either mate. Always a good day when you catch a good 15kg kingfish and your portfolio goes up 15 kg's too ;)
https://www.fishing.net.nz/

Do you measure your portfolio in kg's? I normally take $ ... what is the exchange rate?

[850man]

Do you measure your portfolio in kg's? I normally take $ ... what is the exchange rate?

When you have the quantities Beagle has, easier to weigh that count :D

[Cyclical]

Do you measure your portfolio in kg's? I normally take $ ... what is the exchange rate?
$ do sometimes get measured in k's or g's, but kg's...must be for the super rich.


When you have the quantities Beagle has, easier to weigh that count :D
15kgs of 100 dollar bills, now that would be a nice little stack. My dentist the other day said I could pay with doggy coin (whisky tango foxtrot), while ripping out my wisdom tooth. Straight away I thought of Beagle and knew it was going to be expensive.

Anyway, this nice little dip in SP, stop wishing it not so guys, I'm slowly accumulating and happy to do so at close to the placement price...it's a gift.

[Beagle]

Mate you should try getting 3 wisdom teeth ripped out at once...one needs to take a "dogged" approach to pain management after that :eek2:
An old boss of mine in days long gone by used to refer to bean counters sometimes having to shift "freight" around $15 kilo's is of course $15,000.

[JohnnyTheHorse]

Let me share a few charts to provide clarity on where WHS is from a technical perspective, as well as provide a bit of insight as to how I trade this.

I want to make is the importance of multi time frame analysis and aligning this with the timeframe you managing your trades within. I'll illustrate with a daily, weekly and monthly chart how a trader (or investor) can go from great uncertainty to great clarity (note that I look at a lot more info, but this provides the foundation). Let's start with where the clarity is (charts are at the bottom):

Monthly Chart
As at March:
- We see a run of >100% with no monthly consolidation
- Monthly RSI ~80 (note: don't use RSI on blue sky breakouts as a sell/short signal, but be aware of it)
- Large distance between price and the 12EMA
- The chart is extended, I know to look for signs of monthly consolidation

As of now
- Monthly consolidation is underway (healthy for a bull stock)
- Bull flag forming. This can be a monthly bull flag all the way down to 303. High volume (would expect declining volume), but is explained by the sell down

Weekly Chart
- Without looking at the monthly chart, most people will have the first impression of oh god the wheels are falling off (i.e. doesn't provide the best clarity)
- Topping candle w/c 6/4 and large distance from 12EMA and primary trendline. Expecting weekly consolidation
- Weekly downtrend is underway (consolidation)
- Breaks of support leading to little bear follow through (bullish)
- Weekly RSI extended, but now falling into healthy range (consolidation)

Daily Chart
- Without looking at the monthly chart, most people will have the first impression of oh god the wheels are falling off (i.e. doesn't provide the best clarity)
- Topping candles on 25/3 and 7/4 were a flag for consolidation
- Price within a falling wedge pattern. Breaks of support leading to little bear follow through (bullish)
- High volume (would expect declining volume), but is explained by the sell down
- Approaching primary uptrend line, but even a break isn't long term bearish

So what does this all mean?

There are few true traders here so I won't get into the shorter timeframes, but the key takeaway is that this price action is completely expected and very healthy for a stock that has run so far. For a long term investor there are literally zero red flags here. A monthly bull flag is the most likely scenario.

How have I traded this?

My edge is trading, not long term investing. However there's liquidity issues on the NZX which pushes me to have long term holdings (last I checked I accounted for about 0.1% of traded volume on the NZX :eek2:). Hence I have long term holdings which I will often trade around (in separate accounts). So I have my core long term holding that I don't touch unless there are longer term TA sell signals. At the same time though, I knew monthly consolidation was coming at some point (and the sell down essentially guaranteed it) and I don't want to see the value of my holding drop. So what do I do? I short it in my trading account when I see red flags on the daily and weekly chart (more tax efficient than selling your long term holdings with that considered trading).

Where to from here?

To end monthly consolidation you are looking for a weekly trend change (higher low, higher high) and a break of the previous months high (344). The best time to buy (risk/reward) is typically anticipating the weekly higher low, but you don't always get that and it just charges on up. A break of 300 on increasing volume would be red flags.

Perform this exercise with other stocks that have run hard from covid lows. HGH is a great example of essentially the same thing WHS is going through (I remember people getting nervous in the $1.70's thinking something was wrong, I was adding more to the long term portfolio and swing trades). TA is an extremely powerful tool even for investors, however it's also dangerous as imo most people don't interpret things correctly.

12629
12630
12631

[Snow Leopard]

Let me share a few charts to provide clarity on where WHS is from a technical perspective, as well as provide a bit of insight as to how I trade this....

Thanks for that. It is good to see a few clean charts. :)

My only complaint is that you are not using a log price axis. :p

[RTM]

Let me share a few charts to provide clarity on where WHS is from a technical perspective, as well as provide a bit of insight as to how I trade this.



Great post Johnny.....its a complete explanation for me as to why I should not consider myself a trader.
Interesting.

[RTM]

Duplicate....how can I avoid doing this ?

[Louloubell]

Don't post 😜

[Panda-NZ-]

Let me share a few charts to provide clarity on where WHS is from a technical perspective, as well as provide a bit of insight as to how I trade this.


How does technical analysis work out with an illiquid stock?

Theres a nice solid base of 100k orders at $3.32/3.31 on this one.

[alokdhir]

As per weekly TA ...look for high over 3.41 or low below 3.30 for first signs of which side this week maybe ...last 3 weeks closing 3.38 !! As its fundamentally positive so hopefully it will make higher high this week ...like he said look for weekly reversal ( anticipate it ) before monthly change . SP over 3.41 will do it !!!

[JohnnyTheHorse]

How does technical analysis work out with an illiquid stock?

There's a nice solid base of 100k orders at $3.32/3.31 on this one.

WHS has okay liquidity (for the NZX anyway) and is better after the sell down too. Watching price action shows big money selling down (presumably taking their ~10c profit from placement) and big money accumulating. The fact big money is accumulating after the placement is a positive sign. Depth can be misleading as often just shows the tip of the iceberg, or can be 'fake' orders to give the appearance of support/resistance.

[alokdhir]

WHS volume going down every day with contraction in range too ...No sellers and no buyers maybe ...

[Rawz]

Was talking to a buddy the other day who works at the WHS and has a couple of team leaders under him whom have 20 people under them. He says head office is cutting $12m worth of jobs. Apparently all middle-upper management. His boss was one of the people being cut. Now my buddy just reports to the next person up the chain. Flattening out the company structure..

My buddy picks up a few more responsibilities and expects a little bump in pay next review. But thinks in this situation a good $200k salary savings by the end of it with his old managers role being disestablished.

Apparently a lot of duplication of manager roles from buying businesses over the years and onboarding all employees. Now more integration happening.

Anyways, I think good things are still happening at the WHS. Happy holder.

[LaserEyeKiwi]

Was talking to a buddy the other day who works at the WHS and has a couple of team leaders under him whom have 20 people under them. He says head office is cutting $12m worth of jobs. Apparently all middle-upper management. His boss was one of the people being cut. Now my buddy just reports to the next person up the chain. Flattening out the company structure..

My buddy picks up a few more responsibilities and expects a little bump in pay next review. But thinks in this situation a good $200k salary savings by the end of it with his old managers role being disestablished.

Apparently a lot of duplication of manager roles from buying businesses over the years and onboarding all employees. Now more integration happening.

Anyways, I think good things are still happening at the WHS. Happy holder.

for sure I think the integration of warehouse stationary as SWAS is under appreciated by many, it is providing a massive amounts of cost savings.

[Beagle]

Agree 100% but please keep it quiet...ssshhh...I am trying to accumulate more as cheaply as possible.

[Joshuatree]

That reminds me.When at a cafe recently there was a big SUV outside.On the back windscreen slung on the wiper was a blue plastic bag half full of Doggy doo. The only other customer was a middle-aged woman dressed in expensive poncy clothing, sitting in the far corner immersed in her cellphone. A quiet and loud message there:)

I only recently found out about The Warehouse's online "The Market" another string to their bow

TheMarket NZ - Get It All DoneAd·https://www.themarket.com/nzWhy (https://www.googleadservices.com/pagead/aclk?sa=L&ai=DChcSEwjcpr_N1L7xAhUjM3IKHcXDD4MYABAAGgJzZg&ae=2&ohost=www.google.com&cid=CAESQOD2G1AFQTdSlCnzBjWbufvAzMMIs5THDC7p2RvdKu QXFYlK7wkXhCPxmhgixOtv5UlQNN5lDZ6FkXxFpyEuf0A&sig=AOD64_3SbEXU9b-Aj_hAaqQ2ld0S4dYSfQ&q&adurl&ved=2ahUKEwjOz7TN1L7xAhXTbCsKHXS2BXcQ0Qx6BAgCEAE) this ad?

[winner69]

Local Noel Leemings busy az this afternoon

Looking at new tv ……quite a few out of stock. Somebody bought one that was on display ……and there were 5 boxed up with Click and Collect stickers on.

Looking good

[Gunner]

Local Noel Leemings busy az this afternoon



Looking at new tv ……quite a few out of stock. Somebody bought one that was on display ……and there were 5 boxed up with Click and Collect stickers on.

Looking good

All the discretionary money being spent on goods rather than foreign holidays. The Warehouse group of companies will be doing well out of this why the travel is restricted imo.

[Joshuatree]

Local Noel Leemings busy az this afternoon

Looking at new tv ……quite a few out of stock. Somebody bought one that was on display ……and there were 5 boxed up with Click and Collect stickers on.

Looking good

Something like 130 tv models offered on The Warehouse's, The Market website,free delivery too.

https://www.themarket.com/nzWhy

[Joshuatree]

Cyfxfxrxggyxd

[Entrep]

Finally - https://www.nzherald.co.nz/business/amazon-australia-opens-to-new-zealand-customers-with-cheaper-faster-deliveries/4J6KCJNLN3SW4TZIJOLMIBOPFI/

[Beagle]

Test drove it this morning. Searched for a decent pair of Savane Chino's. Website said it would only show stuff that can be shipped here.
$A118 plus shipping. Okay, gosh that's not cheap by any means.... but they are hard to get in fat dog's size and good Chino pants...and then opps, we cannot ship to your location.
What a complete waste of my time.

[silu]

finally - https://www.nzherald.co.nz/business/amazon-australia-opens-to-new-zealand-customers-with-cheaper-faster-deliveries/4j6kcjnln3sw4tzijolmibopfi/

do not buy from amazon. They are an evil company.

[peat]

article suggests its (Amazon Oz) not good competition huh.
but of course it may improve.

wicked candles and history suggest support at this level .

12715

[BlackPeter]

Test drove it this morning. Searched for a decent pair of Savane Chino's. Website said it would only show stuff that can be shipped here.
$A118 plus shipping. Okay, gosh that's not cheap by any means.... but they are hard to get in fat dog's size and good Chino pants...and then opps, we cannot ship to your location.
What a complete waste of my time.

Try them instead: https://www.justjeans.co.nz/shop/en/justjeansnz/search/Savane+Chino

cheaper, reliable and yes, they do deliver to NZ :);

[LaserEyeKiwi]

“Customers can access expedited delivery in as fast as three business days to certain areas in Auckland and Christchurch for as little as A$6.99 (NZ$7.52)”

“expedited” = “as fast as three business days” ???

I think many New Zealand retails will be very happy this morning as this is a very timid “entry” into New Zealand market for Amazon. If they stick with using their Australian operations instead of investing directly into a NZ fulfillment center and delivery network then the threat is minimal.

[Beagle]

Already have...typical of a Hallensteins store they mostly cater for small and medium sizes.

[Bob50]

A Warehouse staff member tells me they are redesigning an area of the store to get much more into groceries. Low margin stuff I know.

[LaserEyeKiwi]

A Warehouse staff member tells me they are redesigning an area of the store to get much more into groceries. Low margin stuff I know.


Groceries can actually be very high margin, especially if you have zero extra overhead introducing them into an existing store.

[winner69]

What will WHS look like in 2030 (when share price is $30)

Omnichannel shopping in 2030

https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/omnichannel-shopping-in-2030#

[Beagle]

Interesting article, thanks.

S&P retail index up 46.6% year to date, (according to talk on CNBC this morning).

I think WHS and HLG have a lot of room to run.

[BlackPeter]

What will WHS look like in 2030 (when share price is $30)

Omnichannel shopping in 2030

https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/omnichannel-shopping-in-2030#

SP $30 in 2030?

Just looked at the long term trend (20+ years) ... I guess it is good to see that the SP managed to climb after a 12 year long downtrend starting 2008 in mid 2020 above the MA100 (which is in this case is the average of the last 100 months) and MA 100 bottomed out, but if we assume Warehouse goes as fast up as it went down it will be in 2030 around $4;

12724

Not sure I expect $30 anytime soon with this cyclical (unless inflation really takes off) ... but anyway - good to hold at the moment.

[winner69]

JB HiFi sales in NZ for June quarter up 47% on pcp

Full Year sales up 17%

Noel Leeming doing much better than JB Hi Fi so this is all good news

[Beagle]

I topped up on the dip earlier this week at $3.33. That's almost "stealing" I reckon. Never look a gift horse in the mouth !!

[Dlownz]

I topped up on the dip earlier this week at $3.33. That's almost "stealing" I reckon. Never look a gift horse in the mouth !!
You and me both. Expecting a trading update very soon!!

[winner69]

You and me both. Expecting a trading update very soon!!

Any trading update will be a boomer

4th quarter ends next week …might be after that

Have you guessed full year sales

[Dlownz]

Any trading update will be a boomer


4th quarter ends next week …might be after that

Have you guessed full year sales

No idea. But everyone I've talked to at noel lemming are very busy. Torpedo 7 doing very well. Marketplace gathering steam.
No idea about warehouse but looks good.
Also even though noel lemming have sales there profit per product is up due to not price cutting as much due to lack of stock.
No problems here for the foreseeable future.
Finally sorted there issuies by the looks

[Beagle]

No idea. But everyone I've talked to at noel lemming are very busy. Torpedo 7 doing very well. Marketplace gathering steam.
No idea about warehouse but looks good.
Also even though noel lemming have sales there profit per product is up due to not price cutting as much due to lack of stock.
No problems here for the foreseeable future.
Finally sorted there issuies by the looks

Yeah the days of discounting are well and truly over. Mrs B complaining to me today she has to pay full retail and wait for a new high end digital camera but pleased she can get it. She always likes a bargain and bemoaned paying full retail. I said welcome to the new reality where you're a winner if you can get the product you want delivered in a timely manner at full retail. Such an outcome is "the new bargain of the 2020's" There will be no end to this for many many years. Price negotiation for anything is over...its all about whether you can get it or not and when can you get it ?

Got more $ capital tied up in WHS than HLG now. Oh my goodness, now my #1 investment position...I even surprised myself. WHS on stupidly low multiples and stay, play and spend at home is going to be an ongoing theme for many many years and WHS a prime beneficiary of that. I might get even more !

Average analyst forecast is $3.84 and I reckon this and future years forecasts are SUPER CONSERVATIVE and I can foresee some REALLY BIG UPGRADES for FY22 AND FY23 coming after the full year result!! https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/consensus/

[Waltzing]

Yes MR B but HLG is still smashing it on the yield is it not?

WHS not far behind but its got a lot more inventory to track and it all comes from ?

Is it margins as good as HLG and MHJ.

[Beagle]

Yes MR B but HLG is still smashing it on the yield is it not?

WHS only just slightly bigger than HLG holding. Yes I am still expecting 50 cps fully imputed in total this year = 69.44 cps gross = ~ 9.5% gross yield...so good I'll probably have them back at #1 as soon as I see virus numbers coming back down a bit in Australia.

[Waltzing]

WHS did smash it out of the park, T7 and NM had good performances. If by some misfortune for A NZ does get hit by a big lock down ;HLG does not seem to be effected by lock downs and its price line is steady compared to it normal 10 year chart.

My fashion design friends in AUS kicked out of hong kong love HLG and say dont underestimate MHJ.

Women know the fashion market better than most men.

[LaserEyeKiwi]

Speculation that Foodstuffs & Countdown may be forced to sell down assets to a hypothetical 3rd entrant as a result of the government market review being released thus coming week.

https://i.stuff.co.nz/business/125804490/countdown-and-foodstuffs-about-to-find-out-whats-in-the-regulators-trolley

[winner69]

Speculation that Foodstuffs & Countdown may be forced to sell down assets to a hypothetical 3rd entrant as a result of the government market review being released thus coming week.

https://i.stuff.co.nz/business/125804490/countdown-and-foodstuffs-about-to-find-out-whats-in-the-regulators-trolley


Seems that guy from Consumer NZ has become a mouth pice for the government….hmmm

implications of price controls on retail pricing in NZ would be truly scary, especially in a high volume low margin industry like supermarkets.

[Habits]

Speculation that Foodstuffs & Countdown may be forced to sell down assets to a hypothetical 3rd entrant as a result of the government market review being released thus coming week.

https://i.stuff.co.nz/business/125804490/countdown-and-foodstuffs-about-to-find-out-whats-in-the-regulators-trolley

Speaking of foodstuffs, following foodstuffs sellout of WHS will WHS become a top 50 company, bought and held by passive funds

[Beagle]

Speculation that Foodstuffs & Countdown may be forced to sell down assets to a hypothetical 3rd entrant as a result of the government market review being released thus coming week.

https://i.stuff.co.nz/business/125804490/countdown-and-foodstuffs-about-to-find-out-whats-in-the-regulators-trolley

Thanks, interesting. WHS are well positioned with the ability to convert some existing stores.


Speaking of foodstuffs, following foodstuffs sellout of WHS will WHS become a top 50 company, bought and held by passive funds

I think that's coming but some patience is required.

I think WHS are well positioned and their shares are VERY cheap.

[winner69]

I think WHS are well positioned and their shares are VERY cheap.

No beagle ….VERY VERY CHEAP

[alokdhir]

No beagle ….VERY VERY CHEAP

Maybe too good to be true Cheap !!!

Must be a reason for this cheap too ....Only time will tell ...

Disc ....Holding some to see the outcome of this consensus Cheap calls ...lol

[winner69]

Maybe too good to be true Cheap !!!

Must be a reason for this cheap too ....Only time will tell ...

Disc ....Holding some to see the outcome of this consensus Cheap calls ...lol

You will be fine …maybe even wishing you had heaps ;)

Share price been in a downtrend since April high of 386 but that is about to end

Their financial year ends next week and in next week or so they’ll tell us the last quarter has seen fantastic sales and they expect the ‘profit to exceed $160m’ to be firmed up to ‘$180m to $185m’ …..WOW

And the share price will rocket past 4 bucks and by end of September could well be 450/500

[Beagle]

You will be fine …maybe even wishing you had heaps ;)

Share price been in a downtrend since April high of 386 but that is about to end

Their financial year ends next week and in next week or so they’ll tell us the last quarter has seen fantastic sales and they expect the ‘profit to exceed $160m’ to be firmed up to ‘$180m to $185m’ …..WOW

And the share price will rocket past 4 bucks and by end of September could well be 450/500

WHS - You can't have too many :t_up: :t_up:

[winner69]

WHS - You can't have too many :t_up: :t_up:

Now remember your own rules - as per your signature ‘ you never know what misfortune may occur on the earth’

[Beagle]

Now remember your own rules - as per your signature ‘ you never know what misfortune may occur on the earth’

Can shoehorn another 35,000 shares in to take it up to one seventh....but it doesn't say divide your portion "equally" to seven or eight does it :D
No farmer I know plows their fields into 8 different crops of exactly the same amount of acreage. Most have some crops they think are extra good and go harder in those than one seventh or eighth.

While its very true that its always best to take a very sober view of one's ability to predict the future the average analyst forecast for the next 3 years do look very conservative and easily beatable to me. https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/consensus/
Even if they only do the $140m before tax for FY21 and $120m for FY22 & FY23 analysts still think its worth $3.83 on those numbers....and then there's the forecast gross yield of ~ 10% to think about as well.

I'm expecting analyst upgrades after this years result. The risk reward equation looks pretty heavily tilted to the reward side to me...but as you suggest, you can never be 100% sure of the future but on the balance of probabilities...

[winner69]

Can shoehorn another 35,000 shares in to take it up to one seventh....but it doesn't say divide your portion "equally" to seven or eight does it :D
No farmer I know plows their fields into 8 different crops of exactly the same amount of acreage. Most have some crops they think are extra good and go harder in those than one seventh or eighth.

While its very true that its always best to take a very sober view of one's ability to predict the future the average analyst forecast for the next 3 years do look very conservative and easily beatable to me. https://www.marketscreener.com/quote/stock/THE-WAREHOUSE-GROUP-LIMIT-6491364/consensus/
Even if they only do the $140m before tax for FY21 and $120m for FY22 & FY23 analysts still think its worth $3.83 on those numbers....and then there's the forecast gross yield of ~ 10% to think about as well.

I'm expecting analyst upgrades after this years result.

Those guru analysts away with the fairies …….having been asking questions like ‘could you bit of colour around future margin expansion?’

Their targets will follow the price up as usual

[Beagle]

Those guru analysts away with the fairies …….having been asking questions like ‘could you bit of colour around future margin expansion?’

Their targets will follow the price up as usual

Agreed. Got to say, in my honest opinion those targets could easily get beaten by a HUGE MARGIN !!

[winner69]

Agreed. Got to say, in my honest opinion those targets could easily get beaten by a HUGE MARGIN !!

Maybe my FY21 profit forecast of $180m to $185m is conservative then

[Beagle]

Time will tell ;)

[winner69]

Achieve $180m ….that’s 52 cents a share ….PE of say 13 and one gets about 7 bucks

Even their own forecast of $160m at Same PE as BGR makes 344 look VERY VERY CHEAP

[Beagle]

Achieve $180m ….that’s 52 cents a share ….PE of say 13 and one gets about 7 bucks

Even their own forecast of $160m at Same PE as BGR makes 344 look VERY VERY CHEAP

Yeap, no argument from me which is why this is my #1 investment position. They are ridiculously cheap. I'm comfortable with your $180m which as you say is
52 cps so the shares are on a FY21 PE of just 6.6 which is as you say, quite frankly completely out of whack compared to other retailers. It doesn't make any sense to me.

Those figures I quoted earlier which are average analyst numbers are $140m this year and $120m for FY22 and FY23 are the before tax figures. Company itself is guiding "adjusted NPAT for the full year is expected to exceed $160 million" with the major item of adjustment of course being the repayment of the wage subsidy.

Store within a store efficiencies and staff and management efficiencies will reap dividends in FY22 and beyond and their weighted average lease term was 4 years as of the half year result so there's plenty of scope for store rationalisation in the future as the company becomes more focused on omnichannel sales.

The prognosis you outlined at post #4394 looks entirely plausible to me in terms of what's going to play out in the short term. Next year we should get NZX50 inclusion and all the time we're being paid very handsomely with high dividends. I think the risks and rewards looked pretty heavily skewed towards the latter.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/369678/343023.pdf

Dividend policy is to pay out at least 70% of adjusted profit, (see page 6) so if they do $180m that's 52 cents per share so they will pay out at least 52 x 0.7 = 36.4 cps in dividends for FY21.
They've already paid a special of 5 cps + an interim of 13 cps so this suggests a final divvy for FY21 of at least 18.4 cps fully imputed. WOW !

If they can repeat $180m after tax for FY22 that's at least 2 x 18.2 cent dividends during the year = 36.4 cents fully imputed = (36.4 / 0.72) = 50.56 cps gross dividends. On $3.44 that's a Prospective gross yield for FY22 of 50.56 / 344 = 14.7%.

Hey Winner, remember in August 2016 how we bought HLG on a ridiculously low PE at a prospective yield of 15% gross at $2.75 ?...worked out "pretty good" for us eh ;) (Lots of people thought we were mad back then and retail and especially the rag trade was in trouble)....but we knew better and proved the sceptics wrong.

History never repeats...surely we won't nearly triple our money in a few short years, or maybe, just maybe, history does repeat ;)

Final thought for the day, Oh my goodness I'd nearly forgotten about how strong their balance sheet is with $183.6m cash on hand and no debt, (page 4), that's 53 cps in cash at the half year with zero debt. WOW !! I'd better buy some more...these are so cheap its completely nuts !!

[Waltzing]

"remember in August 2016 how we bought HLG "

Yes ....

[Gunner]

More disposable income due to no overseas holidays and people feeling flush due to property prices get spent at places like the Warehouse, Noel Leeming and Torpedo. This will continue for the foreseeable future...who knows how long. Benefits increased, increased efficiencies and market share can only mean good news for this stock.

[Habits]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/369678/343023.pdf

Dividend policy is to pay out at least 70% of adjusted profit, (see page 6) so if they do $180m that's 52 cents per share so they will pay out at least 52 x 0.7 = 36.4 cps in dividends for FY21.
They've already paid a special of 5 cps + an interim of 13 cps so this suggests a final divvy for FY21 of at least 18.4 cps fully imputed. WOW !

If they can repeat $180m after tax for FY22 that's at least 2 x 18.2 cent dividends during the year = 36.4 cents fully imputed = (36.4 / 0.72) = 50.56 cps gross dividends. On $3.44 that's a Prospective gross yield for FY22 of 50.56 / 344 = 14.7%.

Hey Winner, remember in August 2016 how we bought HLG on a ridiculously low PE at a prospective yield of 15% gross at $2.75 ?...worked out "pretty good" for us eh ;) (Lots of people thought we were mad back then and retail and especially the rag trade was in trouble)....but we knew better and proved the sceptics wrong.

History never repeats...surely we won't nearly triple our money in a few short years, or maybe, just maybe, history does repeat ;)

Final thought for the day, Oh my goodness I'd nearly forgotten about how strong their balance sheet is with $183.6m cash on hand and no debt, (page 4), that's 53 cps in cash at the half year with zero debt. WOW !! I'd better buy some more...these are so cheap its completely nuts !!


I think that they're saving the cash to spend on a takeover or acquisition which indeed will create more focus on the stock and possibly a re-rating. Thanks for the yield calcs, I was very surprised at the size of the last dividend which of course was only 13cents and this next one could be 50 percent more. Come in WHS!

[Snoopy]

Final thought for the day, Oh my goodness I'd nearly forgotten about how strong their balance sheet is with $183.6m cash on hand and no debt, (page 4), that's 53 cps in cash at the half year with zero debt. WOW !! I'd better buy some more...these are so cheap its completely nuts !!


I couldn't help noticing a few things about the HY2021 Warehouse balance sheet.

1/ Inventory was down $83.6m or more than 14% on pcp. This is explained as good sales over Christmas. But if that level of sales is to continue this year, the WHS will have to spend $83.6m to bring their inventory back to previous levels.

2/ The difference between 'trade and other receivables' and 'trade and other payables is a whopping: $86.1m-$501.6m = $415.5m. I guess not paying your bills is one way to increase the cash in your bank account?

3/ I notice the 'lease liabilities' exceed the 'right of lease assets' by $910.1m - $751.4m = $158.7m

So adjusting for those 'hidden debts' and subtracting the cash on hand gives a net debt position of:

( $83.6m + $415.5m + $158.7m ) - $183.6m = $473.3m

That net level of operational debt is of the order of 3 times net profit. Nothing to be concerned about, but it would be misleading to say the company was 'debt free'. I would class WHS as having a medium level of indebtedness, based on that HY2021 balance sheet.

SNOOPY

[Waltzing]

From Item 9.
-----------------------------------------
Local trade creditors and accruals 307,257
Overseas trade creditors 146,591

would like to know the break down of these 2 items geographically to see how much comes from which suppliers. Will the continuing supply problems put more pressure on their current liabilities.

well laid out financials but a fuller PL would be good to see.

Was the fixed rate bond of 5% redeemed.

From last year Inventory down YTD, payables up YTD, cash at bank up YTD.

What its rate of stock turn nothing to calc this, pitty.

TOTALCURASSETS - TOTALCURLIAB = SOLVENT.

Hidden debt?

They will need to turn the stock over but there are no current hidden liabilities on the balance sheet.

Dont see a cash reserve for special dividends such as a sale of an assets.

large amount of the cash on hand is pretty much committed to back stopping inventory by the looks.

Looks like it can maintain its dividend.

[nztx]

Looking at Stock Turn with averaging Opening & Closing Stocks -

First of all Interim First Half - (All in $ m)

2021 H1 to 31 Jan 2021:

Opening Inventory $ 393.61
Closing $ 497.1

Ave Inventory $ 445.355 m

Interim Retail COGS $ 1152.9 m

Stock Turn - 6 m = 2.5887

-

2020 H1 to 26 Jan 2020:

Opening Inventory $ 517.758
Closing $ 581.3

Ave Inventory $ 549.529 m

Interim Retail COGS $ 1117.3 m

Stock Turn - 6 m = 2.0332

-

2019 H1 to 27 Jan 2019:

Opening Inventory $ 523.84
Closing $ 542.771

Ave Inventory $ 533.3055 m

Interim Retail COGS $ 1107.308 m

Stock Turn - 6 m = 2.0763



-

Secondly Full Year - (All in $ m)

2020 FY to 2 Aug 2020:

Opening Inventory $ 517.758
Closing $ 393.61

Ave Inventory $ 455.684 m

FY Retail COGS $ 2137.95 m

Stock Turn - FY = 4.6917

-

2019 FY to 28 Jul 2019:

Opening Inventory $ 523.840
Closing $ 517.758

Ave Inventory $ 520.799 m

FY Retail COGS $ 2042.722 m

Stock Turn - FY = 3.92228

-


2018 FY to 29 Jul 2018:

Opening Inventory $ 487.274
Closing $ 523.840

Ave Inventory $ 505.557 m

FY Retail COGS $ 2003.396 m

Stock Turn - FY = 3.9627


All base figures have come from published Company Interim & FY Accounts

Perhaps Snoops can check my back of the envelope calculations etc, above

Not sure if any inventory impairment expensed elsewhere, but these figures
use the basic figures in P&L & Balance Sheet that the company has released.

The HY to 31 Jan 2021 obviously reflects quite a bounce - presumably the post Covid
Lockdowns Retail trading bubble coming through into Inventory movements out the door ;)

2020 H2 looks like it must have been pretty good to kick Stock Turn upwards for FY as well,
for duration of Covid lockdowns on reduced Inventory levels. Or maybe I'm missing
something here ? ;)

[nztx]

Bonds $125 M


Was the fixed rate bond of 5% redeemed.

Yes - Repaid in H2 2020 Year - shows in 2 Aug 2020 12 months Cashflow Statement as going out


It's interesting that even after repaying Wage Subsidies ($67.5 m) in Jan 21 H1 - WHS still managed
to stack up another roughly $50 m in an improved Net Current Assets/Current Liabilities position -
up from roughly $20 m in the two published comparatives.

I guess part of that increase is attributable to no dividends being paid in 2021 Jan H1, which normally
would have appeared going out & been reported in the period.


5.0 cps Special Div paid Mar 2021 ($17 m) made a dent in the cash pile post 2021 H1 balance date
followed by Apr 2021 Interim 13.0 cps (say $44 m) - cash pile increase gone, plus some more ;)

2021 H1 Balance Sheet shows a pretty fluid balance sheet, no borrowings

Very similar to HLG, a fairly clean balance sheet - it comes down to future good periods of
trading, with hopefully no more local lockdowns, supply disruptions etc.

if WHS keep the trading fine tuned, there could be some impressive results going forward, IMO

Inventories down roughly $90 m on the interim comparative suggests WHS is being quite careful
- maybe due to the current Covid affected times elsewhere globally. Cant knock that stance.

Wonder how these guys are going with lead times on imported goods due in ?
The coverage they must need for store acreage must be very large, but obviously
they are able to move to control things fairly well, if the figures coming through are any indication.

GST at end of 2021 H1 appears down too - depending on trading or input patterns maybe it got paid earlier
or offset, if as I imagine they're probably monthly GST filers .. it may all be in timing however or for any number of
reasons, who knows..

[nztx]

I couldn't help noticing a few things about the HY2021 Warehouse balance sheet.

1/ Inventory was down $83.6m or more than 14% on pcp. This is explained as good sales over Christmas. But if that level of sales is to continue this year, the WHS will have to spend $83.6m to bring their inventory back to previous levels.

2/ The difference between 'trade and other receivables' and 'trade and other payables is a whopping: $86.1m-$501.6m = $415.5m. I guess not paying your bills is one way to increase the cash in your bank account?

3/ I notice the 'lease liabilities' exceed the 'right of lease assets' by $910.1m - $751.4m = $158.7m

So adjusting for those 'hidden debts' and subtracting the cash on hand gives a net debt position of:

( $83.6m + $415.5m + $158.7m ) - $183.6m = $473.3m

That net level of operational debt is of the order of 3 times net profit. Nothing to be concerned about, but it would be misleading to say the company was 'debt free'. I would class WHS as having a medium level of indebtedness, based on that HY2021 balance sheet.

SNOOPY



3/ I notice the 'lease liabilities' exceed the 'right of lease assets' by $910.1m - $751.4m = $158.7m

Could it be that these assets etc have been expensed faster than the pay down rate on the liabilities ?

Rather than a Liability - could we consider this to be an early overstatement of expenses (ie the show has theoretically
done better but for the Beancounter's applied magic policies) giving rise to increased Ca$h in the bank ? ;)

The Liability due or programming of pay down of them wont likely change, but the matching of the expensing has possibly been
advanced forward for whatever reasons ? ;)

Perhaps the new Accounting Policies have shortchanged Stakeholders in earlier periods ? ;)

[Beagle]

I'll have a really good look through the FY21 accounts in due course. In the meantime I am focused on the extraordinary metrics this company is trading on with a PE of just 6.6 and a possible FY22 yield of nearly 15% gross.

As noted yesterday there is the possibility of an outsized final dividend this year, (which isn't that far away from being payable) as net adjusted profit after tax at the half year point was $111m (32 cps) and they only paid dividends of 18 cps. A minimum payout ratio of 70% would have suggested interim dividends of 0.7 x 32 = 22.4 cps so there's 22.4 - 18 = 4.4 cps conservatism (below the stated minimum 70% payout line) inbuilt from the first half trading and dividend payments related to that.

WHS metrics are miles out of whack, (astonishingly so), with any other retailer in N.Z. and I am comfortable with the direction they're travelling and the efficiencies they are extracting from the business. It looks like the best value opportunity on the NZX at present, frankly, by a country mile.

I foresee retail as being a LOT stronger for a LOT longer than the analysts are projecting and I am happy to put my money where my mouth is with large stakes in this, HLG and TRA.

Disc: I will be adding to this over the next few weeks and its already my #1 listed investment position.

[Entrep]

beagle and winner whipping WHS punters into a frenzy

[Waltzing]

"All base figures have come from published Company Interim & FY Accounts"

was looking for a break down geographically to show possible exposure to global Baltic Dry.

You can take the basics from the PL and Balance sheet but that doesnt give the break across the whole group as there are 3 separate business.

If an investor is going to go over weight as MR B is suggesting its a bit more complicated than just buy a single retailer like HLG or MHJ.

Those 2 just sell one retail sector.

This is a Group selling many items across a broad range of sectors although perhaps its small enough to just go with these very basic figures.

A break down of sectors would be good but it doubtful they will go into the depth of data required for an over weight position as being suggested.

Would want to see a much deeper presentation of information.

Something like the presentation for SKL which shows its geographic depth of market and product.

The local bike shops for example are starting to complain of real supply issues.

Dont consider the basic opening / closing stock to be anywhere near good enough to make a over weight decision on.

Business like EBO for example in there reporting provides in depth product reporting allowing an investor a deep insight into the business model and if the investor is comfortable they can go over weight if that suites there exposure.

Big lack of depth in this groups reporting.

[Beagle]

2019 FY to 28 Jul 2019:

Opening Inventory $ 523.840
Closing $ 517.758

Ave Inventory $ 520.799 m

FY Retail COGS $ 2042.722 m

Stock Turn - FY = 3.92228

---------------------------------------

Secondly Full Year - (All in $ m)

2020 FY to 2 Aug 2020:

Opening Inventory $ 517.758
Closing $ 393.61

Ave Inventory $ 455.684 m

FY Retail COGS $ 2137.95 m

Stock Turn - FY = 4.6917

2021 H1 to 31 Jan 2021:

Opening Inventory $ 393.61
Closing $ 497.1

Ave Inventory $ 445.355 m

Interim Retail COGS $ 1152.9 m

Stock Turn - 6 m = 2.5887

---------------------------------------------------------
Thanks for crunching those numbers nztx
Very encouraging trend there with annualised stock turn for FY21 likely to be around 5 which is very impressive for this sector.

[Rawz]

...

I foresee retail as being a LOT stronger for a LOT longer than the analysts are projecting and I am happy to put my money where my mouth is with large stakes in this, HLG and TRA.

...

This is also how I see it and is based on personal buying experience over the last 12 months and behaviors I am seeing in multiple friend groups. The wallets are coming out. No point in saving for a holiday to Europe or North America..

Retail is the place to be invested right now. WHS, MHJ, HLG, TRA for the win.

And if you get it wrong you won't be losing money because the multiples are already so low.

The market is offering up some punts here (WHS and MHJ especially) with great upside but little to no downside. Worst case scenario is a great dividend with no capital gain.

[Waltzing]

average of 4 is good enough to cover the current assets / current liabilities for sure.

want to see in depth reporting on group products to go over weight.


else


spread it over average of


"WHS, MHJ, HLG, TRA " as suggested by "RAWZ"


although TRA is questionable but you have drive something in a country with no fast regional trains and a large long demographic.

and dont forget EBO for retail as you should all have that in your portfolio as well.

EBO's financial reporting of product sector break down is excellent.

Consider this groups needs to up the game on its retail stock reporting in the financials.

Notice they used the term "Finished Goods" but this group doesnt "Finish Goods".

For that you budding accountants out there can get your heavy duty tomes out for in deep Cost Accounting.

[winner69]

Waltzingman …….WHS sector/group/segment pretty robust

Segment sales and profitability as well as capital employed all shown in reports etc.

[Beagle]

EBOS on a FY 21 forecast PE of 25.

[LaserEyeKiwi]

Waltzingman …….WHS sector/group/segment pretty robust

Segment sales and profitability as well as capital employed all shown in reports etc.

Yes I'm not really sure what more one could want? it all seems pretty clear in annual report I thought.

[Joshuatree]

What sort of impact will shipping freight rises have?I'm hearing 500% rises in some cases.

[Beagle]

GP margins have been increasing nicely. Little or no discounting and some price rises so shipping cost increases are being passed on to customers.

Did some shopping yesterday as Mrs B was feeling a bit poorly. Surprised how almost everything has gone up.

[winner69]

Hey Winner, remember in August 2016 how we bought HLG on a ridiculously low PE at a prospective yield of 15% gross at $2.75 ?...worked out "pretty good" for us eh ;) (Lots of people thought we were mad back then and retail and especially the rag trade was in trouble)....but we knew better and proved the sceptics wrong.



Yep, that was good and we got another go it at last year as well.:)

Put paid to those who said high yields are there for a reason ….ie very risky ….like too good to be true so dont buy etc etc

Back to WHS - same opportunity right now eh.

And I’d hazard a guess your average is well under 3 bucks so yield on that must be even more awesome than the numbers you’ve been quoting. No harm in averaging up from this point in time …yield so good

[winner69]

What sort of impact will shipping freight rises have?I'm hearing 500% rises in some cases.

I’m hearing WHS (and others) putting their prices up to maintain margins

[Mudfish]

Hello good people. Here's an easy question for you clever people. I have looked this up on the net but am confused. WHS dividends are 100% franked. Is this the same as imputation? Simply, has the tax been paid?

[winner69]

Hello good people. Here's an easy question for you clever people. I have looked this up on the net but am confused. WHS dividends are 100% franked. Is this the same as imputation? Simply, has the tax been paid?

Fully imputed for NZ taxpayers

[Mudfish]

Fully imputed for NZ taxpayers

Thanks Winner, the mathematics just keeps looking better and better. I know this won't mean much but I work next door to a Warehouse store and it just keeps on pumping. No shortage of customers that's for sure.

[Waltzing]

Mr B "EBOS on a FY 21 forecast PE of 25."

Yes correct as always!

assuming most investors have this stock already at lower price entry point from last year.

Financial break downs in there reports is at a pretty high standard.

Winner(n) , its 2021 and publishing data in reports PDF is almost 1990's technology.

No but wait, its just Z80 stuff.....its a JOKE! Like this dusted old forum at the back of second hand book shop...

Lovely but quaint...

Now accurate DSI is good.

[winner69]

Hard to hide 'things' in the Cash Flow Statement

Chart is WHS's Free Cash Flow (12 month figures) over the last few years

Bear in mind -

1) Over this time capex has averaged about $50m annually
2) all the abnormal cash costs (redundancies, restructuring, consultants etc etc) are inlcuded
3) H220 and H121 adjusted for Covod subsidy just for timing pruposes (no overall $ impact)

Pretty good eh -- now all the crap appears to be out of the system day to day performance is generating growing cash flows

Got to do something with that cash

[Waltzing]

"Got to do something with that cash"

are you assuming they are going to increase the DIV.

some way to go before the NOV end of year.

There is time to go through the figures thoroughly before allocating the big dollars or converted currency.

No question the ability of MR B to quickly understand the direction of a balance sheet and the power it brings to a business.

DSI is good in retail industries also.

[Beagle]

Hard to hide 'things' in the Cash Flow Statement

Chart is WHS's Free Cash Flow (12 month figures) over the last few years

Bear in mind -

1) Over this time capex has averaged about $50m annually
2) all the abnormal cash costs (redundancies, restructuring, consultants etc etc) are inlcuded
3) H220 and H121 adjusted for Covod subsidy just for timing pruposes (no overall $ impact)

Pretty good eh -- now all the crap appears to be out of the system day to day performance is generating growing cash flows

Got to do something with that cash

Very impressive ! What a chart that is ! Cash flow is the lifeblood of business and oh my goodness WHS looks very healthy !

[winner69]

Very impressive ! What a chart that is ! Cash flow is the lifeblood of business and oh my goodness WHS looks very healthy !

Payback from years of spending big bucks on redundancies, restructuring etc is huge ….and boosted by those expanding margins

[Ferg]

Looking at Stock Turn with averaging Opening & Closing Stocks -

[snip]

All base figures have come from published Company Interim & FY Accounts

Perhaps Snoops can check my back of the envelope calculations etc, above

Not sure if any inventory impairment expensed elsewhere, but these figures
use the basic figures in P&L & Balance Sheet that the company has released.

Hi nztx

IMO it is better to remove the "Goods in transit from overseas" value when calculating stock turn or inventory days. Why? That value represents a deposit paid to an overseas supplier to secure shipment. Whilst the cash has left WHS, the stock has not yet arrived - it is either on the water or still being manufactured. Through these troubled times, overseas suppliers are demanding higher deposits and when combined with longer shipping lead times, this is resulting in higher values for "Goods in transit" on the Balance Sheet. If you remove these values then you will get a more accurate stock turn. My gut feel is you will see a better improvement than previously calculated.

Ferg

[Beagle]

Well said Ferg. You got a few of these shares ?

[Beagle]

Payback from years of spending big bucks on redundancies, restructuring etc is huge ….and boosted by those expanding margins

Be a "shame" if they did $190m + wouldn't it ;)

[Waltzing]

"inventory days."

DSI.

the public should not be left to calculate any of these stats in this day and age. There is no excuse for it.

[Ferg]

Well said Ferg. You got a few of these shares ?

Thanks Beagle - I have been seeing the same impact of increased value of Goods in Transit with my clients. Yes I have been accumulating WHS quietly on the dips since April. Given WHS does not give preferential access to brokers, it is not widely supported in the "professional" investment community. So I see no reason to rush on accumulating, other than getting my desired position sorted before the upcoming full year result. I'm currently doing my own DD to see how much more I should tip in. The last profit guidance was a beauty that does not appear to be priced in, unless it is being viewed as a one off....time will tell I suppose!

Cheers, Ferg.

[Beagle]

"inventory days."

DSI.

the public should not be left to calculate any of these stats in this day and age. There is no excuse for it.



They had one on 4 May 2021, first one since 2017. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/371579/345273.pdf

Ferg, Its apparent from FY22 and FY23 forecasts that analysts do see this years result as a one off. I don't share their view.

[Ferg]

They had one on 4 May 2021, first one since 2017. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/371579/345273.pdf

Ferg, Its apparent from FY22 and FY23 forecasts that analysts do see this years result as a one off. I don't share their view.

Interesting presentation. Lots of green arrows and rising graphs in there which confirm historical performance. Thanks for that. More interesting to me is the noises they are making regarding the future - such as:

processes and procedures,
cutting out the local middlemen and sourcing more directly from overseas,
not just acknowledging the headwinds with leases and staff but actually doing something about it with SWAS etc,
the multi-year systems plans,
the online intentions,
Torpedo 7 performance (Anecdotally I was really impressed with the local Torpedo 7 - I had not realised it was part of WHS when I went some months ago. I managed to procure some items I could not get elsewhere. The store felt like Kathmandu meets Rebel Sport.)
etc etc etc.


Lots of meaty things in there and I suppose the local lockdown gave them the oomph to realise the first fruits of their labours. It appears there are more savings and efficiencies to come as new initiatives are embedded, so I shall indeed watch this space with baited breath.

In short, I agree with your assessment Beagle.

[nztx]

Hi nztx

IMO it is better to remove the "Goods in transit from overseas" value when calculating stock turn or inventory days. Why? That value represents a deposit paid to an overseas supplier to secure shipment. Whilst the cash has left WHS, the stock has not yet arrived - it is either on the water or still being manufactured. Through these troubled times, overseas suppliers are demanding higher deposits and when combined with longer shipping lead times, this is resulting in higher values for "Goods in transit" on the Balance Sheet. If you remove these values then you will get a more accurate stock turn. My gut feel is you will see a better improvement than previously calculated.

Ferg


Good point Ferg - but for in transit to be starring in closing inventory then the debit
for prepaid costs must be included in COGS figures as well

How does this change the view of things ?

Reduce COGS as well as adjust the Opening & Closing inventories along the way ?

or do the two contra off ?

[nztx]

They had one on 4 May 2021, first one since 2017. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/371579/345273.pdf

Ferg, Its apparent from FY22 and FY23 forecasts that analysts do see this years result as a one off. I don't share their view.


Interesting - with the analyst's views on WHS - does this suggest they see a one off post covid trading spike
and their views are eliminating this one-off out (or depending on what happens - maybe it could recur) ?

If it did, with presumably lockdowns - then we may see it normal occurence with lumpy ups & downs in corporate
performance in places..

WHS seems to have done a pretty good job of navigating troubled Covid times with fine tuning - how much of this compensates
for removing the possible trading spike out of the equation ?

They seem to have a lot of domestic input supplies into Retail for sale COGS - the import payables at HY Jan 2021 didn't seem too high
or overly increased - perhaps they balanced this or just a matter of timing of things - who knows ..


On a wider perspective - what are the analyst's views on other Retail stocks - BGR & HLG or dare I suggest KMD - where
post covid good trading times have been apparently seen as well ?

Okay, in NZ & Oz economies there have been huge artificially created waves of liquidity & money creation thrown into
the system by Govt's - with no real apparent moves to suck back out large surplus awash in the system so far to date ..

[Dlownz]

Interesting - with the analyst's views on WHS - does this suggest they see a one off post covid trading spike
and their views are eliminating this one-off out (or depending on what happens - maybe it could recur) ?

WHS seems to have done a pretty good job of navigating troubled Covid times with fine tuning - how much of this compensates
for removing the possible trading spike out of the equation ?

They seem to have a lot of domestic input supplies into Retail for sale COGS - the import payables at HY Jan 2021 didn't seem to high
or overly increased - perhaps they balanced this or just a matter of timing of things - who knows ..

I personally don't see it as a once off.
Torpedo 7 sales growing and opening new stores. Noel lemming can't keep up with demand. The Market growing and they have a subscriber option so free shipping if you pay a monthly fee. Recurring revenue is always a good thing.

[nztx]

I personally don't see it as a once off.
Torpedo 7 sales growing and opening new stores. Noel lemming can't keep up with demand. The Market growing and they have a subscriber option so free shipping if you pay a monthly fee. Recurring revenue is always a good thing.


I agree - despite the Analysts views, this is looking a well tuned turn around

Okay, it's been a while coming & just maybe Covid provided a final shake up to see it through .. ;)

The results through Covid times & now a reasonably sound position coming out this end of the tunnel looking forward,
it's hard not to like what is showing on the radar now .. ;)

[Beagle]

Big feed to be had here for those that know what to do, hint its not this so don't muck about with this https://www.bing.com/images/search?view=detailV2&ccid=wZZSH68P&id=7D6880E518206251D18F6E2EDF6FF1EB80744FBE&thid=OIP.wZZSH68PPp77yQThniKi2QHaE6&mediaurl=https%3a%2f%2fi.pinimg.com%2foriginals%2f 57%2f9f%2fda%2f579fda7f98eb6a544f822671ace8e3b3.jp g&cdnurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR.c19 6521faf0f3e9efbc904e19e22a2d9%3frik%3dvk90gOvxb98u bg%26pid%3dImgRaw&exph=1424&expw=2144&q=beagle+with+rabbits&simid=608025081270138702&FORM=IRPRST&ck=7D3902DC1598692EE5B8B6E8F33F6663&selectedIndex=0&ajaxhist=0&ajaxserp=0

It's this https://www.bing.com/images/search?view=detailV2&ccid=xqnI9AXQ&id=391F7C8C7436D4C677290785A8E32C792C67FFDA&thid=OIP.xqnI9AXQ22QnVtsIHZGvsgHaGV&mediaurl=https%3A%2F%2Fdygtyjqp7pi0m.cloudfront.ne t%2Fi%2F30783%2F26796777_3.jpg%3Fv%3D8D4637969687A 90&cdnurl=https%3A%2F%2Fth.bing.com%2Fth%2Fid%2FR.c6a 9c8f405d0db642756db081d91afb2%3Frik%3D2v9nLHks46iF Bw%26pid%3DImgRaw&exph=1027&expw=1200&q=beagle+with+rabbits&simid=607993968527416122&form=IRPRST&ck=B774DCE9DF8996D064D8B9325CF0F524&selectedindex=3&ajaxhist=0&ajaxserp=0&vt=0&sim=11

Disc: Bought another 10,000 today. Just warming up...

[Rawz]

Big feed to be had here for those that know what to do, hint its not this so don't muck about with this https://www.bing.com/images/search?view=detailV2&ccid=wZZSH68P&id=7D6880E518206251D18F6E2EDF6FF1EB80744FBE&thid=OIP.wZZSH68PPp77yQThniKi2QHaE6&mediaurl=https%3a%2f%2fi.pinimg.com%2foriginals%2f 57%2f9f%2fda%2f579fda7f98eb6a544f822671ace8e3b3.jp g&cdnurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR.c19 6521faf0f3e9efbc904e19e22a2d9%3frik%3dvk90gOvxb98u bg%26pid%3dImgRaw&exph=1424&expw=2144&q=beagle+with+rabbits&simid=608025081270138702&FORM=IRPRST&ck=7D3902DC1598692EE5B8B6E8F33F6663&selectedIndex=0&ajaxhist=0&ajaxserp=0

It's this https://www.bing.com/images/search?view=detailV2&ccid=xqnI9AXQ&id=391F7C8C7436D4C677290785A8E32C792C67FFDA&thid=OIP.xqnI9AXQ22QnVtsIHZGvsgHaGV&mediaurl=https%3A%2F%2Fdygtyjqp7pi0m.cloudfront.ne t%2Fi%2F30783%2F26796777_3.jpg%3Fv%3D8D4637969687A 90&cdnurl=https%3A%2F%2Fth.bing.com%2Fth%2Fid%2FR.c6a 9c8f405d0db642756db081d91afb2%3Frik%3D2v9nLHks46iF Bw%26pid%3DImgRaw&exph=1027&expw=1200&q=beagle+with+rabbits&simid=607993968527416122&form=IRPRST&ck=B774DCE9DF8996D064D8B9325CF0F524&selectedindex=3&ajaxhist=0&ajaxserp=0&vt=0&sim=11

LOL :p

Beagle says go in for the kill folks.

I've got enough, just waiting for the $180m profit promised by him and his partner in crime W69

[alokdhir]

Big feed to be had here for those that know what to do, hint its not this so don't muck about with this https://www.bing.com/images/search?view=detailV2&ccid=wZZSH68P&id=7D6880E518206251D18F6E2EDF6FF1EB80744FBE&thid=OIP.wZZSH68PPp77yQThniKi2QHaE6&mediaurl=https%3a%2f%2fi.pinimg.com%2foriginals%2f 57%2f9f%2fda%2f579fda7f98eb6a544f822671ace8e3b3.jp g&cdnurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR.c19 6521faf0f3e9efbc904e19e22a2d9%3frik%3dvk90gOvxb98u bg%26pid%3dImgRaw&exph=1424&expw=2144&q=beagle+with+rabbits&simid=608025081270138702&FORM=IRPRST&ck=7D3902DC1598692EE5B8B6E8F33F6663&selectedIndex=0&ajaxhist=0&ajaxserp=0

It's this https://www.bing.com/images/search?view=detailV2&ccid=xqnI9AXQ&id=391F7C8C7436D4C677290785A8E32C792C67FFDA&thid=OIP.xqnI9AXQ22QnVtsIHZGvsgHaGV&mediaurl=https%3A%2F%2Fdygtyjqp7pi0m.cloudfront.ne t%2Fi%2F30783%2F26796777_3.jpg%3Fv%3D8D4637969687A 90&cdnurl=https%3A%2F%2Fth.bing.com%2Fth%2Fid%2FR.c6a 9c8f405d0db642756db081d91afb2%3Frik%3D2v9nLHks46iF Bw%26pid%3DImgRaw&exph=1027&expw=1200&q=beagle+with+rabbits&simid=607993968527416122&form=IRPRST&ck=B774DCE9DF8996D064D8B9325CF0F524&selectedindex=3&ajaxhist=0&ajaxserp=0&vt=0&sim=11

Disc: Bought another 10,000 today. Just warming up...

Me also bought 20,000 today ...lets hope it works out well ...all positive but someone keeps selling ...who is that W69 ??

[BlackPeter]

Oh dear ... I assume critical observations are currently unwanted, aren't they?

Anyway - my trustworthy Giro cylce helmet starts to disintegrate after 26 years of use, so I decided to hunt this afternoon for a new one.

Went first to Torpedo 7 ... and found out that even the basic model (something like $110) didn't offer a visor. Didn't like the colours on offer either. Pretty empty shop as well (I was the only customer) - why are we shareholders paying for empty premises offering goods nobody wants?

Happened to be afterwards in the warehouse and found that a very similar helmet like the $110 helmet in Torpedo 7 is $ 35 at the warehouse (sure, different brand, but same interior, same safety standard and same boring colours) ... same - without visor. Decided to look somewhere else. On my way back to the exit I noticed that most of the articles in the electronic department (like cellphones ...) are on "sold out". Not a lot of customers in this shop either.

Just wondering whether they make a lot of money with putting empty shelves on offer?

Was wondering this morning whether I should buy some more WHS shares (I do have a medium sized holding), but decided after this experience that I don't feel good enough abut WHS to buy more shares ... felt too much like shopping in some postwar socialist country where you buy what's available instead of what you want. Wouldn't buy Intershop shares either.

Anyway - more shares available for beagle, this is good :):

[Ferg]

Good point Ferg - but for in transit to be starring in closing inventory then the debit
for prepaid costs must be included in COGS figures as well

How does this change the view of things ?

Reduce COGS as well as adjust the Opening & Closing inventories along the way ?

or do the two contra off ?

The journal entry for inventory in transit is:
Debit Inventory in Transit

. Credit Overseas Accounts Payable (notice the high overseas payables balance, which is a strategic shift in procurement policies)

Some of those creditors may have been paid resulting in an additional:
Debit Overseas Accounts Payable

. Credit Cash

None of this impacts COGS. To calculate inventory days and/or stock turn reduce the opening and closing balances by the value of inventory in transit, but do not change your COGS numbers.

[Ferg]

Oh dear ... I assume critical observations are currently unwanted, aren't they?

[snip]

Just wondering whether they make a lot of money with putting empty shelves on offer?

Not at all BP - criticisms are welcome, especially if we are making incorrect assessments or judgements etc. I'd rather be wrong and cashed in than wrong, blissfully ignorant and facing a capital loss...!

You raise a good point about empty shelves. As supply chains get stretched resulting in delayed deliveries, those with stock on the shelf will win. I am seeing this first hand with my clients. Despite our best efforts, actually getting delivery of stock is the issue no matter the amount of deposit paid! In addition, having to wait weeks for delivery ex factory to a port in China is adding more time delays to the currently abysmal situation of being bumped off ships and a reduced shipping schedule. Anecdotally others have also seen stock shortages with Noel Leeming. Given the steel issues one of my clients faces, I wonder if it will also hit the likes of STU. In conclusion, we are not through he worst of COVID due to disruptions to international supply chains so your personal observation will not be an isolated event.

[nztx]

The journal entry for inventory in transit is:
Debit Inventory in Transit

. Credit Overseas Accounts Payable (notice the high overseas payables balance, which is a strategic shift in procurement policies)

Some of those creditors may have been paid resulting in an additional:
Debit Overseas Accounts Payable

. Credit Cash

None of this impacts COGS. To calculate inventory days and/or stock turn reduce the opening and closing balances by the value of inventory in transit, but do not change your COGS numbers.


Thanks Ferg - so you're suggesting imported stuff only hits COGS on arrival / clearance
and the bookkeeper then clears the cost of the arrived stuff into P&L Purchases accounts in COGS ?

It crossed my mind that it may have been charged direct on incurring a cost to Purchases sub ledgers in COGS
then balance date adjustments made separating 'still in progress' as a component of their closing inventories..

Hence why I included in previous back of the envelope inventory figures

[nztx]

Oh dear ... I assume critical observations are currently unwanted, aren't they?

Anyway - my trustworthy Giro cylce helmet starts to disintegrate after 26 years of use, so I decided to hunt this afternoon for a new one.

Went first to Torpedo 7 ... and found out that even the basic model (something like $110) didn't offer a visor. Didn't like the colours on offer either. Pretty empty shop as well (I was the only customer) - why are we shareholders paying for empty premises offering goods nobody wants?

Happened to be afterwards in the warehouse and found that a very similar helmet like the $110 helmet in Torpedo 7 is $ 35 at the warehouse (sure, different brand, but same interior, same safety standard and same boring colours) ... same - without visor. Decided to look somewhere else. On my way back to the exit I noticed that most of the articles in the electronic department (like cellphones ...) are on "sold out". Not a lot of customers in this shop either.

Just wondering whether they make a lot of money with putting empty shelves on offer?

Was wondering this morning whether I should buy some more WHS shares (I do have a medium sized holding), but decided after this experience that I don't feel good enough abut WHS to buy more shares ... felt too much like shopping in some postwar socialist country where you buy what's available instead of what you want. Wouldn't buy Intershop shares either.

Anyway - more shares available for beagle, this is good :):


Did you leave them with a back order - BP by chance ? ;)

These sort of items may be as scarce as hens teeth here with the way global shipping is starting to look in places
thus justifying being asked an arm & a leg for privilege of getting your mits on the more curious of items not on the shelves .. ;)

[nztx]

Me also bought 20,000 today ...lets hope it works out well ...all positive but someone keeps selling ...who is that W69 ??


dont tell anyone -- Ogg may be liquidating a few to get some readies to load up on his fave hobby stock SKY ;)

[Beagle]

Oh dear ... I assume critical observations are currently unwanted, aren't they?

Anyway - my trustworthy Giro cylce helmet starts to disintegrate after 26 years of use, so I decided to hunt this afternoon for a new one.

Went first to Torpedo 7 ... and found out that even the basic model (something like $110) didn't offer a visor. Didn't like the colours on offer either. Pretty empty shop as well (I was the only customer) - why are we shareholders paying for empty premises offering goods nobody wants?

Happened to be afterwards in the warehouse and found that a very similar helmet like the $110 helmet in Torpedo 7 is $ 35 at the warehouse (sure, different brand, but same interior, same safety standard and same boring colours) ... same - without visor. Decided to look somewhere else. On my way back to the exit I noticed that most of the articles in the electronic department (like cellphones ...) are on "sold out". Not a lot of customers in this shop either.

Just wondering whether they make a lot of money with putting empty shelves on offer?

Was wondering this morning whether I should buy some more WHS shares (I do have a medium sized holding), but decided after this experience that I don't feel good enough abut WHS to buy more shares ... felt too much like shopping in some postwar socialist country where you buy what's available instead of what you want. Wouldn't buy Intershop shares either.

Anyway - more shares available for beagle, this is good :):

That is good. I am not looking a gift fat rabbit in the mouth and just playing with it.
You should get out more mate :p Welcome to the new reality of living with Covid.

Today's successful purchase is getting close to what you want in a product, paying full retail and not waiting an inordinate amount of time for it. That's what the landscape is now...Its just the way things are right across the board with all sorts of things.

[Waltzing]

" helmet in Torpedo 7 is $ 35 at the warehouse (sure, different brand, but same interior, same safety standard and same boring colours)"

many brands of sun glasses come out of the same factory in SWIT or AUT. Each vendor has an office in the building and the production line is set up to rotate between designs....

same factory different moulds and different ratios of molecular properties in the materials used to make the frames and glasses.

More people go to Warehouse than a T7 and the cost accounting means the floor space can be charge out at different rates, also the number of units held might mean one brand is from a farther away manufacture and shipping point.

[alokdhir]

That is good. I am not looking a gift fat rabbit in the mouth and just playing with it.
You should get out more mate :p Welcome to the new reality of living with Covid.

Today's successful purchase is getting close to what you want in a product, paying full retail and not waiting an inordinate amount of time for it. That's what the landscape is now...Its just the way things are right across the board with all sorts of things.

Though I endorse buying WHS to some extent even if I dont like the management and their business model ....But I dont agree there is a sellers market in retail here in NZ especially for smaller items ...still can get discount on many items including Dyson products ...

[winner69]

Once used to be a saying in retail 'when petrol reaches $2.30 a litre start thinking about a bit of a sales slowdown'

Stuff story says petrol hit $2.36

Just as well old sayings are just that these days - these days are different

[winner69]

Kingfish has 20% of its funds Mainfreight ..far too much

Their portfolio really does need refreshing and take on board some stocks that will get them back to their former glory

I’ve written to them suggesting they get a decent chunk of WHS …get in first before other funds catch on

[Entrep]

Kingfish has 20% of its funds Mainfreight ..far too much

Their portfolio really does need refreshing and take on board some stocks that will get them back to their former glory

I’ve written to them suggesting they get a decent chunk of WHS …get in first before other funds catch on

You could also write to WHS investor relations and at least ask for some compensation for all this good work you are doing for them.

[Beagle]

Kingfish has 20% of its funds Mainfreight ..far too much

Their portfolio really does need refreshing and take on board some stocks that will get them back to their former glory

I’ve written to them suggesting they get a decent chunk of WHS …get in first before other funds catch on

Can't help noticing that IFT, MFT, and FPH make up 50% of their portfolio. All good companies but trading on super high PE multiples and one has to ask if that's proper diversification. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/376154/350920.pdf
I see they've finally cottoned on that RYM are overpriced and disappointed Gordy has left. Only took them 7 years longer than you and I that called RYM overpriced in 2014, (and its dramatically underperformed the sector and market since). In my opinion the magic ended when Simon Challis left and Gordy as his understudy has been a poor shadow of the true legend that made RYM really shine in days gone by. I think its clear they need an infusion of new idea's. You and I would make a fearsome team running the show at Kingfish, I think we've missed our calling :)

[BlackPeter]

That is good. I am not looking a gift fat rabbit in the mouth and just playing with it.
You should get out more mate :p Welcome to the new reality of living with Covid.

Today's successful purchase is getting close to what you want in a product, paying full retail and not waiting an inordinate amount of time for it. That's what the landscape is now...Its just the way things are right across the board with all sorts of things.

We will see.

I found a dealer in Manukau who sells bike helmets over the internet. Good brand, the right colour and size and with visor. Price (incl. postage) slightly below the very dull (and visor-less) Torpedo 7 option. I ordered one. A lost sale for Torpedo 7.

Maybe Torpedo 7 / warehouse just having a logistical problem, which could be made worse by an attitude problem (I noticed that already last year when trying to get some other stuff from one of their subsidiaries (at that stage it was Warehouse Stationary).

This could quickly turn into a problem for their shareholders, couldn't it? Markets change fast and can be unforgiving when they see substandard performance.

And sure - just one story from one customer (and shareholder) - still, they clearly don't always get their act together ...

[Beagle]

We'll get a sales / trading update for the fourth quarter about mid August and a guidance upgrade with it...remember who called it first and who's leading this hunt ;)

[MauroNZ]

Oh dear ... I assume critical observations are currently unwanted, aren't they?

Anyway - my trustworthy Giro cylce helmet starts to disintegrate after 26 years of use, so I decided to hunt this afternoon for a new one.

Went first to Torpedo 7 ... and found out that even the basic model (something like $110) didn't offer a visor. Didn't like the colours on offer either. Pretty empty shop as well (I was the only customer) - why are we shareholders paying for empty premises offering goods nobody wants?

Happened to be afterwards in the warehouse and found that a very similar helmet like the $110 helmet in Torpedo 7 is $ 35 at the warehouse (sure, different brand, but same interior, same safety standard and same boring colours) ... same - without visor. Decided to look somewhere else. On my way back to the exit I noticed that most of the articles in the electronic department (like cellphones ...) are on "sold out". Not a lot of customers in this shop either.

Just wondering whether they make a lot of money with putting empty shelves on offer?

Was wondering this morning whether I should buy some more WHS shares (I do have a medium sized holding), but decided after this experience that I don't feel good enough abut WHS to buy more shares ... felt too much like shopping in some postwar socialist country where you buy what's available instead of what you want. Wouldn't buy Intershop shares either.

Anyway - more shares available for beagle, this is good :):

It's going to be soon 9 years living in NZ for me and what you describe specially in WHS has been always the shopping experience to me. These days I only go to see what I possibly like among the "cheap stuff" but nothing else.

[Waltzing]

It is duly noted.

However instead of running the numbers of the WHS balance sheet through our Smart Chart summary ratio rules software we are stuck processing Heats and semi's from the women and mens single sculling events from tokyo.

It appears some competitors (not the germans) may be sculling there boats right over left at the catch when the german made boat is made left over right..

Something you cant buy at WHS or T7 and the price in euros for sports gear is going through the roof. New boats now in the high 20 grand and climbing. If you can actually ship gear to NZ and the container charges going up according to the local agents from europe.

[winner69]

We'll get a sales / trading update for the fourth quarter about mid August and a guidance upgrade with it...remember who called it first and who's leading this hunt ;)

Guidance said ”As a result of the strength of trading through to the end of Q3, and the expectation that Q4 FY21 Group sales will be similar to Q3 FY21

If ‘similar’ that would mean Q4 sales down 14% on last year …..going backwards and reducing full year growth to a miserly 7%

I think Nick is kidding us with that guidance ….making sure he doesn’t disappoint us

[Sideshow Bob]

We will see.

I found a dealer in Manukau who sells bike helmets over the internet. Good brand, the right colour and size and with visor. Price (incl. postage) slightly below the very dull (and visor-less) Torpedo 7 option. I ordered one. A lost sale for Torpedo 7.

Maybe Torpedo 7 / warehouse just having a logistical problem, which could be made worse by an attitude problem (I noticed that already last year when trying to get some other stuff from one of their subsidiaries (at that stage it was Warehouse Stationary).

This could quickly turn into a problem for their shareholders, couldn't it? Markets change fast and can be unforgiving when they see substandard performance.

And sure - just one story from one customer (and shareholder) - still, they clearly don't always get their act together ...

T7 customer service is hopeless.....I've had repeated issues and now avoid them where I can.

Last straw that broke the camels back.....pedal just straight fell off my daughters new bike on her first ride, and she fell off!! Guys in the shop were apologetic but just simply shouldn't happen. Bought from a reputed company etc etc.

There was a few issues with the actual order. But then about 6 weeks after we picked it up, they rang me up and asked if I was going to pick up the bike, which had been bought click and collect. Could have got a 2nd bike for free...

Disc: A (small) shareholder, who hates shopping there and struggles for reasons to buy more :scared:

[Snow Leopard]

Just looked up the Botany Downs Warehouse on Google Maps and it says 'Not too busy' so that is also 'Not so good' right?

12782

Disc: Last went in this one in 2006, just interested to know if it was still there.

[peat]

anecschmote.

[LaserEyeKiwi]

LOL at people here trying to judge a retail store popularity based on observations on a Monday and Tuesday morning.

The majority of retail sales happen Friday, Saturday, Sunday - with Saturday by far the busiest.

Do you guys also judge nightclubs for being empty at 10am? or bakeries for being closed at 6pm?

[Soolaimon]

LOL at people here trying to judge a retail store popularity based on observations on a Monday and Tuesday morning.

Do you guys also judge nightclubs for being empty at 10am? or bakeries for being closed at 6pm?

Good point. The warehouse where I shop is generaly a lot more active these days than it was 18 months ago and that is why I am looking to buy more shares on the dips. Time to be cautious with WHS is when Cindy opens up international travel, and that's a ways off I reckon.

[Rawz]

.... Time to be cautious with WHS is when Cindy opens up international travel, and that's a ways off I reckon.

100% and applies to all retail

[LaserEyeKiwi]

Good point. The warehouse where I shop is generaly a lot more active these days than it was 18 months ago and that is why I am looking to buy more shares on the dips. Time to be cautious with WHS is when Cindy opens up international travel, and that's a ways off I reckon.

Even when international travel opens up, its going to be a lot different for kiwis travelling overseas with many popular overseas destinations having covid endemic through society, and as we are seeing while vaccination prevents death & serious illness, it doesn't 100% prevent catching covid.

This will put a lot of people off travelling to USA/UK/Europe/Fiji etc where they will still have covid in the community for years to come, especially if NZ keeps some sort of quarantine or self isolation requirement on return for anyone who catches covid. It might be people might need a pre-departure covid test before returning to NZ, which might mean an unexpected 14 day extension to your holiday if you test positive.

In summary - the spending on overseas holidays is going to remain very subdued for several more years.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/361487/332946.pdf

Sounds a bit "cheesy" but for me I have come to realise this sums up WHS quite well.
The reality (that I often forget) is that most families don't have much left over after paying the rent / mortgage, food and bills and you can go into the WHS and get stuff you really need, dirt cheap. Most stuff there is MUCH cheaper than Briscoes.

Interesting Eureka moment for me. I remember our trip down to New Plymouth to Mrs B's mother's funeral earlier this year very well, like it was yesterday. Such an incredibly sad three days, (Mrs B and her mother had been estranged for more than 25 years and now there's no way to ever reconcile) and it rained all the way down, almost all the time there and most of the way back. Mrs B's back was in very bad shape after the long car journey down there...desperately needed a hottie to help ease the pain. It was late at night when we got down there, dark, cold and pouring with rain. Where on earth would we get a hot water bottle at 8.00 p.m. at night on a Sunday ? No idea...maybe some late night Chemist that would charge us like a wounded bull for this basic necessity ? We drove around and the WHS with their newish looking store on a main road was like a beacon on a hill drawing us in. Open till 9.00 p.m. on a Sunday and they had a desperately needed hot water bottle for only $7. What a relief.

I can't help wondering how many other families lives are made better because they can get necessities at a moments notice at dirt cheap prices ?

That watershed moment was the beginning of my journey to seriously investing in WHS shares. The metrics I have talked about recently really speak for themselves and are miles more compelling and out of whack with other listed retailers who all have similar stock procurement and logistical challenges.

[Soolaimon]

Even when international travel opens up, its going to be a lot different for kiwis travelling overseas with many popular overseas destinations having covid endemic through society, and as we are seeing while vaccination prevents death & serious illness, it doesn't 100% prevent catching covid.

This will put a lot of people off travelling to USA/UK/Europe/Fiji etc where they will still have covid in the community for years to come, especially if NZ keeps some sort of quarantine or self isolation requirement on return for anyone who catches covid. It might be people might need a pre-departure covid test before returning to NZ, which might mean an unexpected 14 day extension to your holiday if you test positive.

In summary - the spending on overseas holidays is going to remain very subdued for several more years.

Not so sure about that. Years ago when we started travelling we had to have a certificate proving vaccination against smallpox, typhoid and other diseases much worse than covid. Didn't stop us going. I suspect that when released Kiwis will fly overseas in their droves and the Warehouse and other retailers may struggle.

[Gunner]

Not so sure about that. Years ago when we started travelling we had to have a certificate proving vaccination against smallpox, typhoid and other diseases much worse than covid. Didn't stop us going. I suspect that when released Kiwis will fly overseas in their droves and the Warehouse and other retailers may struggle.

As its classed as a pandemic, will you be able to get medical insurance for a place like Bali? Will it be affordable considering a certain number of people will require hospital treatment even when vaccinated?

[Beagle]

Even when international travel opens up, its going to be a lot different for kiwis travelling overseas with many popular overseas destinations having covid endemic through society, and as we are seeing while vaccination prevents death & serious illness, it doesn't 100% prevent catching covid.

This will put a lot of people off travelling to USA/UK/Europe/Fiji etc where they will still have covid in the community for years to come, especially if NZ keeps some sort of quarantine or self isolation requirement on return for anyone who catches covid. It might be people might need a pre-departure covid test before returning to NZ, which might mean an unexpected 14 day extension to your holiday if you test positive.

In summary - the spending on overseas holidays is going to remain very subdued for several more years.

That's how I see it too. Its just not worth the risk. I've given up for the foreseeable future on my dream trip to Switzerland travelling business class and staying in the finest accommodation for several weeks. Find something here to spend the money on instead. I like bargains and the biggest one is WHS shares.

"The warehouse where everyone gets a bargain", especially those buying their shares at present ;)

[LaserEyeKiwi]

Not so sure about that. Years ago when we started travelling we had to have a certificate proving vaccination against smallpox, typhoid and other diseases much worse than covid. Didn't stop us going. I suspect that when released Kiwis will fly overseas in their droves and the Warehouse and other retailers may struggle.

The emerging consensus around the long term impact of covid on recovered people is going to have a bigger impact in future. while immediate concerns are around survival rates, there is already studies indicating the life long impact is worse than heart disease or diabetes, and a drop in mental capacity of 9 IQ points on average. It won't be long before this becomes a significant public concern.

[peat]

a drop in mental capacity of 9 IQ points on average. It won't be long before this becomes a significant public concern.

covidiots everywhere haha

have a few but had real trouble with regret considering I looked at them when they were 2.
that small dog yapping is deep in my ear tho

[winner69]

Stockturns discussion and BP's T7 experience interesting

Torpedo7 stock turns pretty shocking

Maybe time to get rid of them

[Beagle]

Checked on the history in more normal times. Trading updates on 25 July and 23 August 2019.

This year mid August ?

Disc: Steadily accumulating more.

[peat]

Torpedo7 stock turns pretty shocking



Its quite a different sort of product I think and I'm surprised its done as well as it has. Part of the WHS portfolio now ... Provides a bit of scale and diversity - maybe not too much else.
But I mean, can they do more red sheds?

[Dlownz]

Its quite a different sort of product I think and I'm surprised its done as well as it has. Part of the WHS portfolio now ... Provides a bit of scale and diversity - maybe not too much else.
But I mean, can they do more red sheds?

Torpedo 7 seems busy when I've gone in.
Sales increasing as they open more stores. Can't see why it's a bad thing

[LaserEyeKiwi]

Stockturns discussion and BP's T7 experience interesting

Torpedo7 stock turns pretty shocking

Maybe time to get rid of them

Why would they sell them when they are integrating the operations into the groups merged operating system (Logistics, warehousing, inventory management, online sales etc - the more brands WHS has using the same integrated system, the more efficient it becomes for the entire group), and when sales for T7 have been performing like this:

https://www.sharetrader.co.nz/blob:https://www.sharetrader.co.nz/72a37a5f-8f2c-4266-b426-e2911cd8e484https://www.sharetrader.co.nz/blob:https://www.sharetrader.co.nz/adfe6bf2-4b12-40bd-a439-24e297cef99612790

[RTM]

The emerging consensus around the long term impact of covid on recovered people is going to have a bigger impact in future. while immediate concerns are around survival rates, there is already studies indicating the life long impact is worse than heart disease or diabetes, and a drop in mental capacity of 9 IQ points on average. It won't be long before this becomes a significant public concern.

Interesting. Do you have a link for these studies LEK ?

[Hawkeye]

Stockturns discussion and BP's T7 experience interesting

Torpedo7 stock turns pretty shocking

Maybe time to get rid of them

I was under the impression from the comms I received while working at Noels that T7 was still in its expansion/growth phase, increasing its NZ footprint, before churning out the sales. Its been an outstanding performer during covid due to everyone wanting leisure activity items, as it was I ordered an E-bike and was told it would be 4-5months due to stock issues. (They actually had to employ a security team to protect stock enroute to NZ as another countries ports i.e. Australia were taking stock designated for NZ and then sussing it out with the supplier.)

[ratkin]

Something needs to be done about the supermarkets in this country they a disgrace 400 dollars today for weekly shop it must be up over 25% in the last year, they using covid as excuse to fleece us

[Beagle]

Something needs to be done about the supermarkets in this country they a disgrace 400 dollars today for weekly shop it must be up over 25% in the last year, they using covid as excuse to fleece us

Agreed and the draft report of the Commerce Commission's findings agrees too. https://www.msn.com/en-nz/news/national/commerce-commission-supermarket-probe-suggests-creation-of-third-retailer-to-directly-stimulate-retail-competition/ar-AAMFRxe?ocid=msedgntp

Interesting times with WHS. I would think they are well positioned with their national store footprint that's ripe for change and rationaliztion.

https://www.nzherald.co.nz/business/commerce-commission-supermarket-competition-inquiry-draft-findings-released-today/WRYTRPKMEFD7RFJXPNAHSUGDYE/

[winner69]

Agreed and the draft report of the Commerce Commission's findings agrees too. https://www.msn.com/en-nz/news/national/commerce-commission-supermarket-probe-suggests-creation-of-third-retailer-to-directly-stimulate-retail-competition/ar-AAMFRxe?ocid=msedgntp

Interesting times with WHS. I would think they are well positioned with their national store footprint that's ripe for change and rationaliztion.

https://www.nzherald.co.nz/business/commerce-commission-supermarket-competition-inquiry-draft-findings-released-today/WRYTRPKMEFD7RFJXPNAHSUGDYE/

Maybe WHS make excessive profits as well ……what’s their ROE?

Profit $160m plus on $430m shareholder equity pretty good

[LaserEyeKiwi]

Maybe WHS make excessive profits as well ……what’s their ROE?

Profit $160m plus on $430m shareholder equity pretty good

creating excessive profits is not illegal in of itself. If it’s generated from market behavior that is judged to be monopolistic that is a different story. WHS is nowhere near any sort of monopoly or duopoly situation of course.

[Beagle]

I think the key here is that the duopoly's profits are persistently high. If WHS can consistently make ~ $200m per year for many many years other competitors will be attracted to that sector.
Comm Comm's take is that the incumbents ostensibly act to willfully obstruct other competitors and engage in other anticompetitive activities. Basically they're acting in a contrived manner to bleed Kiwi's dry.

They mention its hard to get site's for suitable sized stores for other competitors. I know one company that's well positioned in that regard ;)

[winner69]

I think the key here is that the duopoly's profits are persistently high. If WHS can consistently make ~ $200m per year for many many years other competitors will be attracted to that sector.
Comm Comm's take is that the incumbents ostensibly act to willfully obstruct other competitors and engage in other anticompetitive activities. Basically they're acting in a contrived manner to bleed Kiwi's dry.

They mention its hard to get site's for suitable sized stores for other competitors. I know one company that's well positioned in that regard ;)

Hey Beagle …where’s your ‘maximising shareholder returns’ hat gone

Nice to see you standing up for the poor householders of NZ though

[Beagle]

Hey Beagle …where’s your ‘maximising shareholder returns’ hat gone

Nice to see you standing up for the poor householders of NZ though

Getting older mate. Going a bit soft in the head as well as the body lol

[LaserEyeKiwi]

I think the key here is that the duopoly's profits are persistently high. If WHS can consistently make ~ $200m per year for many many years other competitors will be attracted to that sector.
Comm Comm's take is that the incumbents ostensibly act to willfully obstruct other competitors and engage in other anticompetitive activities. Basically they're acting in a contrived manner to bleed Kiwi's dry.

They mention its hard to get site's for suitable sized stores for other competitors. I know one company that's well positioned in that regard ;)

Yes I thought that was a very interesting point as well - WHS group has a lot of existing prime spots for the creation of a nationwide supermarket chain.

It has multiple options as well, and could do whatever works depending on the site:

1) adapting existing stores (probably works best for mall locations where building development is out of WHS control.
2) building on car park space (and preserving parking either above or below the new store)
3) redevelop existing single level store site with a new two level structure.
4) instead of ending lease on the warehouse stationary stores upon integration into a red shed, alternatives are keeping the stationary site for smaller footprint grocery, or cancelling the red shed/stationary integration and instead going with grocery integration at the red shed.
5) new developments in areas of population growth see even more economies of scale for WHS group - could now have the whole portfolio in new big box developemnts: Red shed/stationary/grocery/NL/T7
6) in some areas a pure online grocery operation may be an option, especially in future as more people opt for online grocery delivery, WHS can integrate this into existing logistics network with some tweaks.
7) and of course the brute force approach: WHS can just build new grocery stores in existing key population centers where land is available. Maybe some areas where a smaller WHS was being considered for closure anyway.

[Rawz]

Not sure why WHS don't just turn a portion of their stores into a costco/gilmores type operation.

Buy 5kg of milo cheap
Buy 50kg washing powder cheap
Buy 2kg corn flakes cheap.

Don't worry about perishables or short life goods. Who wants to buy their milk and broccoli from the WHS? Not me but I would buy 5kg of baked beans in a tin.

[ratkin]

Not sure why WHS don't just turn a portion of their stores into a costco/gilmores type operation.

Buy 5kg of milo cheap
Buy 50kg washing powder cheap
Buy 2kg corn flakes cheap.

Don't worry about perishables or short life goods. Who wants to buy their milk and broccoli from the WHS? Not me but I would buy 5kg of baked beans in a tin.


They just need to adopt the pallet model that Lidl and Aldi started with. Just leave them on a pallet and sell them cheap,

[winner69]

Yes I thought that was a very interesting point as well - WHS group has a lot of existing prime spots for the creation of a nationwide supermarket chain.

It has multiple options as well, and could do whatever works depending on the site:

1) adapting existing stores (probably works best for mall locations where building development is out of WHS control.
2) building on car park space (and preserving parking either above or below the new store)
3) redevelop existing single level store site with a new two level structure.
4) instead of ending lease on the warehouse stationary stores upon integration into a red shed, alternatives are keeping the stationary site for smaller footprint grocery, or cancelling the red shed/stationary integration and instead going with grocery integration at the red shed.
5) new developments in areas of population growth see even more economies of scale for WHS group - could now have the whole portfolio in new big box developemnts: Red shed/stationary/grocery/NL/T7
6) in some areas a pure online grocery operation may be an option, especially in future as more people opt for online grocery delivery, WHS can integrate this into existing logistics network with some tweaks.
7) and of course the brute force approach: WHS can just build new grocery stores in existing key population centers where land is available. Maybe some areas where a smaller WHS was being considered for closure anyway.

Then if segment is so ‘profitable’ why aren’t WHS already doing it?

Maybe they recall what happened with their last foray into groceries

[LaserEyeKiwi]

Not sure why WHS don't just turn a portion of their stores into a costco/gilmores type operation.

Buy 5kg of milo cheap
Buy 50kg washing powder cheap
Buy 2kg corn flakes cheap.

Don't worry about perishables or short life goods. Who wants to buy their milk and broccoli from the WHS? Not me but I would buy 5kg of baked beans in a tin.

they already have these type of grocery areas in some larger stores.

[LaserEyeKiwi]

Then if segment is so ‘profitable’ why aren’t WHS already doing it?

Maybe they recall what happened with their last foray into groceries

Because it would be a lot easier if the government adopts recommendation from today’s report that would make entry feasible.. At present any new entrants are effectively locked out of the supply chains due to the way the current duopoly operates.

[Beagle]

Yes I thought that was a very interesting point as well - WHS group has a lot of existing prime spots for the creation of a nationwide supermarket chain.

It has multiple options as well, and could do whatever works depending on the site:

1) adapting existing stores (probably works best for mall locations where building development is out of WHS control.
2) building on car park space (and preserving parking either above or below the new store)
3) redevelop existing single level store site with a new two level structure.
4) instead of ending lease on the warehouse stationary stores upon integration into a red shed, alternatives are keeping the stationary site for smaller footprint grocery, or cancelling the red shed/stationary integration and instead going with grocery integration at the red shed.
5) new developments in areas of population growth see even more economies of scale for WHS group - could now have the whole portfolio in new big box developemnts: Red shed/stationary/grocery/NL/T7
6) in some areas a pure online grocery operation may be an option, especially in future as more people opt for online grocery delivery, WHS can integrate this into existing logistics network with some tweaks.
7) and of course the brute force approach: WHS can just build new grocery stores in existing key population centers where land is available. Maybe some areas where a smaller WHS was being considered for closure anyway.

Good pragmatic thinking and something I am sure management will be carefully considering going forward.

[Rawz]

they already have these type of grocery areas in some larger stores.

Do they? Never seen one in Auckland? All I see are bins full of single bag chips or chocolate. Then selves of single item shampoo, razors, soap etc. Scrap that. Can get all that from PaknSave cheaper anyway.

Got to go bulk bargain approach if they want to take on the super markets.

Go to your local gilmores store and you can by 2.5kg bag of corn chips. 5kg bag of cereal. This is different from the supermarkets. WHS should do this model.