KMD - Kathmandu

[Beagle]

http://en.wikipedia.org/wiki/Radley_(company)

Hard to get a handle on how well he's done with his most recent appointment with Radley in London as it appears to be owned by private equity and he was only appointed in March 2013.
I guess his experience at getting product into European distribution channels can't hurt ?

[Frostwind]

It's going to break $1.5 NZD soon,

[BFG]

It's going to break $1.5 NZD soon,

$1.50 doesn't stand a chance with the stock being dual-listed and therefore able to be shorted. One will follow the other in lock-step, and the ASX listing is the one to follow. The $1.25-$1.30 range should provide support (at least short-term) for a double-bottom dating back 3 years. That update is very ugly and follows closely on the heels of the one from December.

Couta, suggest you take another look at it and reconsider holding while you still can. I rate this NGVB (Not Good Very Bad!) on the beauty scale!

[noodles]

$1.50 doesn't stand a chance with the stock being dual-listed and therefore able to be shorted. One will follow the other in lock-step, and the ASX listing is the one to follow. The $1.25-$1.30 range should provide support (at least short-term) for a double-bottom dating back 3 years. That update is very ugly and follows closely on the heels of the one from December.

Couta, suggest you take another look at it and reconsider holding while you still can. I rate this NGVB (Not Good Very Bad!) on the beauty scale!
Not all ASX listed stocks can be shorted. However, KMD is one of them that can be. http://www.asx.com.au/data/shortsell.txt
It will be interesting to see if the short volume increases from the current 246,005
Couta, how is it you can pick all the stocks to be downgraded? Perhaps you need to take a step back and look at your strategy.
Unlike BFG, I'm not going to give advice on what to do with your KMD shares.

[Beagle]

$1.50 doesn't stand a chance with the stock being dual-listed and therefore able to be shorted. One will follow the other in lock-step, and the ASX listing is the one to follow. The $1.25-$1.30 range should provide support (at least short-term) for a double-bottom dating back 3 years. That update is very ugly and follows closely on the heels of the one from December.

Couta, suggest you take another look at it and reconsider holding while you still can. I rate this NGVB (Not Good Very Bad!) on the beauty scale!

No boucey bounce for the dying cat then :)

[BFG]

No boucey bounce for the dying cat then :)

I'd target $1.30 area if I was doing so. Going to be extremely oversold (and perhaps overdone) at that level. May be primed for a cyclical reversal late in the year if they can get their act together?

[Beagle]

I'd target $1.30 area if I was doing so. Going to be extremely oversold (and perhaps overdone) at that level. May be primed for a cyclical reversal late in the year if they can get their act together?

That's a big "IF". As predicted in mid January we are well and truly testing that $1.50 2012 low now. Thing is I think this company with the majority of its stores in Australia has built their business model on upper end pricing to comfortably well off people with high disposable income. We know from various economic studies that traditionally Australians have enjoyed some of the very highest living standards in the world. As we can see with tougher times facing Australians, (N.Z. stores have performed reasonably well) it doesn't take much for customers quality and value expectations to shift. Putting my headlights on full beam if we see continued tough economic conditions in Australia, (really the mining, oil and gas pull-back could easily be argued to be in its early stage), and consumers fearing for their jobs and / or seeing contracting real estate prices and I reckon it's not much of a stretch to figure that there could be quite a significant change in customer focus towards more value brands and / or deferring of discretionary spending on adventure / outdoor / clothing type products Kathmandu sells in which case $1.30 might not be the bargain it might otherwise appear to be :eek2: Retail sure is a tough gig, that's for sure !!!!

[winner69]

On the chart there was a DEATH CROSS at $3.50 mid 2014

KMD a perfect example of trading the big trends (Mr P loved those stocks) - like 150 odd to 400 and then selling on the DEATH CROSS at 350 and staying out until the big trend changes .... and heaven knows when that will be

I reckon DEATH CROSSes are great

[BFG]

$1.50 didn't hold and ended the day on lows (MASSIVE red candle = another day of selling ahead, more than likely). The ASX is still selling off below $1.40 and volume is very high. I suspect all the ANZ customers who boosted KMD to #1 buy 4 weeks ago and #10 last week are not very happy holders right now and will be fueling this fire!

NGVB!

6729

[Bobdn]

One thing is certain: whenever BFG and Roger come together on a thread, on a stock they don't own, it's never a sign that the stock is in an upward trend :)

[couta1]

On the chart there was a DEATH CROSS at $3.50 mid 2014

KMD a perfect example of trading the big trends (Mr P loved those stocks) - like 150 odd to 400 and then selling on the DEATH CROSS at 350 and staying out until the big trend changes .... and heaven knows when that will be

I reckon DEATH CROSSes are great
You've been watching too much star wars there winner oh but that was a DEATH STAR, never mind close enough. Hindsight is always easy and wouldn't life be simple if we we stop every bad thing from happening.

[Chaowee88]

You've been watching too much star wars there winner oh but that was a DEATH STAR, never mind close enough. Hindsight is always easy and wouldn't life be simple if we we stop every bad thing from happening.

I once heard a great cliche, and in Couta's case it is perfect. " Everything I touch turns to sold". Describes Couta's investments perfectly.

[Beagle]

Not picking on you Couta1, you're a mate and a good bloke...I'm just trying to help you build your understanding http://www.investopedia.com/terms/d/deathcross.asp

Edited in reponse to subsequent "unfortunate" comment directly above. In Couta1's defence he's doing extremely well indeed with his shareholdings in GNE and AIR both of which I also have solid shareholdings in.

[Baa_Baa]

On the chart there was a DEATH CROSS at $3.50 mid 2014

KMD a perfect example of trading the big trends (Mr P loved those stocks) - like 150 odd to 400 and then selling on the DEATH CROSS at 350 and staying out until the big trend changes .... and heaven knows when that will be

I reckon DEATH CROSSes are great

Yes, and easy to use as well, for timing long-holds/exits. See this for example, when the actual price is taken out and only the 50/200 SMA's are shown, the crosses are the trades. It does help to have confirmations, but otherwise pretty simple really isn't it. It makes 'buy and hold in spite of everything' seem a bit of an odd strategy.

[percy]

Thanks for posting Baa Baa,but the same 50 day and 200 day moving averages would have saved Couta1 with TTK too.
In hindsight we can easy see the sell signals,and using the same moving averages, it makes foresight very achievable too,[and very profitable].

[couta1]

(QUOTE=Roger;528892]Not picking on you Couta1, you're a mate and a good bloke...I'm just trying to help you build your understanding http://www.investopedia.com/terms/d/deathcross.asp

Edited in reponse to subsequent "unfortunate" comment directly above. In Couta1's defence he's doing extremely well indeed with his shareholdings in GNE and AIR both of which I also have solid shareholdings in.[/QUOTE]
Thanks mate I'll have a look at that info, I can also add HNZ /PGW and SCL to the above stocks:cool:

[bunter]

just want to add that trading MA crosses isn't a guaranteed way to make money IMO.

With a non-trending item, the 50 and 200MA lines will cross often and the trades will usually result in a loss each time.

[couta1]

I once heard a great cliche, and in Couta's case it is perfect. " Everything I touch turns to sold". Describes Couta's investments perfectly.
That's fine I'm learning all the time and I never give up till I've achieved what I set out to do no matter how many setbacks. Some like riding high horses now don't they.

[percy]

just want to add that trading MA crosses isn't a guaranteed way to make money IMO.

With a non-trending item, the 50 and 200MA lines will cross often and the trades will usually result in a loss each time.

Work just fine for me.

[bunter]

Work just fine for me.

Didn't for me when that was all I used. I'm using an FA / TA mix now and it's working much better.

FA determines what I'll invest in, and TA when (if at all).

Mind you pretty well anything should work in this market.

[Baa_Baa]

That's very true, a strong trend works best. You'll see on the KMD example I posted that a 'fake-out' in the Aug/Oct crosses would have cost at least the brokerage fees, which would be material for the big buyers/sellers, if not a capital loss in that particular case. That's why I suggested 'confirmation', meaning for example the RSI, Money Flow, %R and various other indicators (depending on speed of indication) really should be well into the overbought/sold zones.

Anyway, I'm digressing from the action on KMD. What a mess! Looking forward to the fundamentals guys trying to figure out 'fair value'. Assuming this doesn't kill KMD, there will be some good buying in due course.


just want to add that trading MA crosses isn't a guaranteed way to make money IMO.

With a non-trending item, the 50 and 200MA lines will cross often and the trades will usually result in a loss each time.

[winner69]

Work just fine for me.

That is because you tend to follow trending stocks rather than those that keep going up and down at the whim of day traders

[tim23]

Can you ta guys give us a good new trade instead of these hindsight ones?

[youngatheart]

On the chart there was a DEATH CROSS at $3.50 mid 2014

KMD a perfect example of trading the big trends (Mr P loved those stocks) - like 150 odd to 400 and then selling on the DEATH CROSS at 350 and staying out until the big trend changes .... and heaven knows when that will be

I reckon DEATH CROSSes are great

Based on this, VML is looking particularly tasty right now... :)

[winner69]

Can you ta guys give us a good new trade instead of these hindsight ones?

OK ...... Percy promises to remind you when KMD is fixed and a Golden Cross (from Star Wars couta) appears

[MAC]

What a mess! Looking forward to the fundamentals guys trying to figure out 'fair value'. Assuming this doesn't kill KMD, there will be some good buying in due course.

It will a tough one for all to estimate now, who knows where forward margins and inventories are or will be, esp with 2HY earnings seasonally being double that of 1HY, double the guestimate error for analysts.

Xavier doesn’t start as CEO until after his notice period is up with former company Radley too.

And crumbs, I hope he likes challenges, still if he can turn KMD around he should be able to pick the next job practically anywhere, if he fails, well, folk will just say that a company that used to have 80% off sales was clearly only one backpack removed from a going out of business sale anyway.

It will take a while for X to settle in and I don’t reckon the company will be in a position to offer any FY guidance whatsoever, it may unfortunately be for analysts and shareholder a highly speculative case of ‘wait and see’, oh yeah, and pray for a cold winter.

I do hope for holders they can come back from this over time, there's all the potential in the world with the right business model and marketing strategy.

[bunter]

Yes, and easy to use as well, for timing long-holds/exits. See this for example, when the actual price is taken out and only the 50/200 SMA's are shown, the crosses are the trades. It does help to have confirmations, but otherwise pretty simple really isn't it. It makes 'buy and hold in spite of everything' seem a bit of an odd strategy.

That chart would generate four long trades and four short ones (assuming short trades are possible) - plus a fifth short trade in progress.

KMD looks like a reasonably favourable stock to trade, in retrospect, containing two big moves.

I wonder though if those eight completed trades would actually have made any money. Seven of them look like losers or break-even (hard to say without the price line).

There's a big short trade in progress which might make a difference. Who knows where that one will end.

[BFG]

Can you ta guys give us a good new trade instead of these hindsight ones?

Can you FA guys give us a solid forecast of revenue/profits/PEG ratio/EV for KMD in FY17? Thought so ;)

Point is, the charts first said "sell" because the cross, then the companies update said "sell" a few months ago. In this case TA came first, but it can definitely be the other way around! Point is, the market spoke: some of us listened to the first sign, some listened to the second sign, and some didn't listen at all!

[bunter]

Can you ta guys give us a good new trade instead of these hindsight ones?

1) SCL signalled on 15/1/15 at 1.45. It's on my FA 'permitted to buy' list. I took the signal and am still adding.

Can't say if it is a 'good' trade though. They're all a gamble IMO.

2) WBC.Ax just signalled, also on my FA list. Am adding.

3) ANZ.AX looks like it might signal in the next few days - also permitted. I prefer WBC and consider these two stocks closely related - almost part of the same bet.

4) RYM signalled on 9/1/15 at 8.48.
On my do not buy list. Also the price has been weak since signalling.

ETA: Signalled for me = simple MA50 crosses simple MA 200, using prices that are adjusted for dividends (by deducting the dividend amount after tax from all days' prices prior to the div)

[winner69]

Death Crosses are good signal to stay out of a stock until things improve, esp on strong trending stocks.



Sometimes there are multiple cross overs in a short [eriod of time ... as somebody says those times are when such things are pretty meaningless (unless you like short term trades but then you are probably concentrating 20/50 MA and other things)

[winner69]

Can you FA guys give us a solid forecast of revenue/profits/PEG ratio/EV for KMD in FY17? Thought so ;)

Point is, the charts first said "sell" because the cross, then the companies update said "sell" a few months ago. In this case TA came first, but it can definitely be the other way around! Point is, the market spoke: some of us listened to the first sign, some listened to the second sign, and some didn't listen at all!

We could always put the kiss of death on Kathmandu and say they are following the same path as Postie Plus and Pumpkin

[percy]

Can you ta guys give us a good new trade instead of these hindsight ones?

On 12th January 2015 I brought more SUM as the share price went above both the 50day and the 200 day EMA.I had been waiting for this to happen for over 2 months.I has stayed above the 200 day ema and so would appear it is in a new uptrend.
VIL. Went through the 200day EMA on 5th November,and the new uptrend appears to be in place.
AIR.Went through the 200 day EMA and the new uptrend is in place.

[stoploss]

On 12th January 2015 I brought more SUM as the share price went above both the 50day and the 200 day EMA.I had been waiting for this to happen for over 2 months.I has stayed above the 200 day ema and so would appear it is in a new uptrend.
VIL. Went through the 200day EMA on 5th November,and the new uptrend appears to be in place.
AIR.Went through the 200 day EMA and the new uptrend is in place.

Percy don't make it too hard for him, he asked for A trade , giving him 3 options will be confusing .....:)

[percy]

Percy don't make it too hard for him, he asked for A trade , giving him 3 options will be confusing .....:)

Right just settle for SUM as it was the last one.!!!!

[winner69]

That announcement today is a real disaster one.

Sales up on last year but turning $11m profit into a $2m loss is some effort ......looks like they have lost about 8% points of gross margin. No longer are gross margins in excess of 63%.

At best I see them making $10m to $15m profit this year, maybe $20m couta if the snow and ice and winds come early. That's an eps of 5 to 8 cents and maybe 10 cents. So at about 150 still a lot of optimism still built in.

They essentially borrowed to pay last years dividends. Hard to see where $25m of free cash going to come from to pay any decent dividend this year.

Hope this critical review and the new man sorts this mess out pronto or heaps of pain to come.

[Baa_Baa]

On 12th January 2015 I brought more SUM as the share price went above both the 50day and the 200 day EMA.I had been waiting for this to happen for over 2 months.I has stayed above the 200 day ema and so would appear it is in a new uptrend.
[snip]

Well there's an excellent example, in SUM, of acting on the price rising above the 2 MA's 50/200, though some would say that is not a confirmed trend in as much as we've have been discussing MA crossovers, it is just the price moving above those MA's. Still a reasonably confident indicator though. The more conservative approach that we've been discussing is waiting for the Golden Cross (or Death Cross) where the 50 actually crosses the 200 on the upwards (or downwards) leg, which some would say confirms the trend, which hasn't happened yet.

Last thought from me tonight ... the 50/200 MA's are so commonly used that they are sometimes thought of as self-fulfilling, i.e. if lots of people watch it, which they do, then it stands to reason that the price will move in the direction of the cross, because a lot of people watch it and many of them act on it. So a simple tactic is to tighten the MA's a bit, if you want to move earlier (more risk), or loosen them if you want to be more conservative (less risk) -- in confirming a trend.

good night all, been an interesting discussion.

[percy]

Well there's an excellent example, in SUM, of acting on the price rising above the 2 MA's 50/200, though some would say that is not a confirmed trend in as much as we've have been discussing MA crossovers, it is just the price moving above those MA's. Still a reasonably confident indicator though. The more conservative approach that we've been discussing is waiting for the Golden Cross (or Death Cross) where the 50 actually crosses the 200 on the upwards (or downwards) leg, which some would say confirms the trend, which hasn't happened yet.

Last thought from me tonight ... the 50/200 MA's are so commonly used that they are sometimes thought of as self-fulfilling, i.e. if lots of people watch it, which they do, then it stands to reason that the price will move in the direction of the cross, because a lot of people watch it and many of them act on it. So a simple tactic is to tighten the MA's a bit, if you want to move earlier (more risk), or loosen them if you want to be more conservative (less risk) -- in confirming a trend.

good night all, been an interesting discussion.

Yes,I see it is not a "Golden Cross" which we were talking about,but as you correctly point out, it was the share price rising above both the 50 day and the 200 day EMA.
I am mostly a FA investor who uses TA to time my entry and if need be exit.The share price should be above both the 50day and 200day EMAs before I buy,or about to go through the 200 day EMA..
Should a share fall below the 200 day EMA I give it a few days to "make up its mind".
Often it will come up,but if it does not, I am gone!!!
Bunter's post no.530.I also think SCL and RYM are buys.I hold both.The other stocks I don't follow.

[noodles]

Yes,I see it is not a "Golden Cross" which we were talking about,but as you correctly point out, it was the share price rising above both the 50 day and the 200 day EMA.
I am mostly a FA investor who uses TA to time my entry and if need be exit.The share price should be above both the 50day and 200day EMAs before I buy,or about to go through the 200 day EMA..
Should a share fall below the 200 day EMA I give it a few days to "make up its mind".
Often it will come up,but if it does not, I am gone!!!
Bunter's post no.530.I also think SCL and RYM are buys.I hold both.The other stocks I don't follow.
While I respect the 200 day MA as a sell signal, if a company that is trading below the 200 MA and announces a result(or forecast) that is better than expected, I'll happily buy and let the TA's come to the party late.

Likewise, if a company report a results below expectations, I'll sell (even if above the 200 MA).

The profit announcement in June14 was the signal to sell. I think this also coincided with a breach of the 200day MA.

[percy]

While I respect the 200 day MA as a sell signal, if a company that is trading below the 200 MA and announces a result(or forecast) that is better than expected, I'll happily buy and let the TA's come to the party late.

Likewise, if a company report a results below expectations, I'll sell (even if above the 200 MA).

The profit announcement in June14 was the signal to sell. I think this also coincided with a breach of the 200day MA.

TA is only one tool.Excellent though it is.
I agree with you and would buy a company that is trading below the 200 day MA, should it announce a result or forecast that is better than expected.
I also tend to sell if I don't like an announcement.regardless what the chart says.
So using FA [good research] and TA you get things right 9 out of 10 times.

[BFG]

Some very good posts going up here. I hope everyone is listening, especially newbies! :)

[brend]

TA is only one tool.Excellent though it is.
I agree with you and would buy a company that is trading below the 200 day MA, should it announce a result or forecast that is better than expected.
I also tend to sell if I don't like an announcement.regardless what the chart says.
So using FA [good research] and TA you get things right 9 out of 10 times.

Could you kindly recommend websites to learn more about TA for the newbies?

[percy]

Could you kindly recommend websites to learn more about TA for the newbies?

You can google "Golden Cross" and "Death Cross" which should lead you to understanding TA more.I think you can even google moving averages.
I have learnt the most however from tthree sharetrader posters,Hoop, KW, and former poster Phaedrus, who took time to help me when I first started posting on sharetrader..
I can not find the thread, [hopefully some kind person will post the link] but it was by KW, and it was something like "using TA to time entry and exit points.]

[winner69]

Brend, try this
http://www.dummies.com/how-to/personal-finance/investing/Technical-Analysis.html

Or buy the book

[KiwiGekko]

I can not find the thread, [hopefully some kind person will post the link] but it was by KW, and it was something like "using TA to time entry and exit points.]

Percy, was this might be the thread you were looking for?: http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits - if not still a great thread for those interested in TA.

[winner69]

First few pages of this thread interesting. We are still saying the same things

Been a few good times to hold ..like 150 to 350 .....and obviously times not to be in.

Maybe good example of buy and hold not always good but trading cyclical nature of such stocks is the way to go.

[percy]

Percy, was this might be the thread you were looking for?: http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits - if not still a great thread for those interested in TA.

Thank you KiwiGekko,that is the thread.

[percy]

First few pages of this thread interesting. We are still saying the same things

Been a few good times to hold ..like 150 to 350 .....and obviously times not to be in.

Maybe good example of buy and hold not always good but trading cyclical nature of such stocks is the way to go.
Yes I agree with you,businesses are often very fluid.Some are cyclical cycles,some are in the right place [sector] at the right time,some have new good managers,others change and get poor managers,yet good businesses well managed [thinking EBO, d MFT,and RYM] just keep delivering.I laugh at myself often,not buying or selling,just sitting,then a surprise announcement comes along and "the game is full on",again!
I think the hardest thing is to judge a "good" company from a "bad" company,remembering a "good" business can had a "bad" year,and a "bad" business can have a "good" year.I guess it is measuring management against what they have achieved, compared with what they said they would achieve. We must be careful to avoid "The Gunnas" ie we gunna do this,we are gunna to that,but who never get there.! I usually find CEOs who use clear simple language out perform.

[couta1]

You'd be talking about the likes of David Ware from Ttk aye Percy clear simple language is his style:eek2:

[percy]

You'd be talking about the likes of David Ware from Ttk aye Percy clear simple language is his style:eek2:

No was not thinking of him!!
Always an exception to any rule.!!! lol.

[MAC]

Morningstar went from ACCUMULATE to BUY on 16th January, then from BUY to ACCUMULATE on 20th January with a $3.20 price target, and today have gone from ACCUMULATE to BUY again with a $2.50 price target, perhaps they have a good resident meteorologist.

I suppose at least it is some good news for the staunch holders of Kathmandu even if it is just Morningstar, I do reckon they are an analyst that very rarely picks up the phone for a chat with CFO’s though.

It will be a few months before KMD even know where they are going through under new leadership, way too early for BUY ratings just yet IMO, time will come though.

[Beagle]

Morningstar went from ACCUMULATE to BUY on 16th January, then from BUY to ACCUMULATE on 20th January with a $3.20 price target, and today have gone from ACCUMULATE to BUY again with a $2.50 price target, perhaps they have a good resident meteorologist.

I suppose at least it is some good news for the staunch holders of Kathmandu even if it is just Morningstar, I do reckon they are an analyst that very rarely picks up the phone for a chat with CFO’s though.

It will be a few months before KMD even know where they are going through under new leadership, way too early for BUY ratings just yet IMO, time will come though.

Seriously the vast majority of analysts got this horribly wrong last year...with all the unknowns how does one reasonably expect they'll get their profit / loss "guess" right for 2015 ? a classic case of following TA.

[winner69]

Morningstar went from ACCUMULATE to BUY on 16th January, then from BUY to ACCUMULATE on 20th January with a $3.20 price target, and today have gone from ACCUMULATE to BUY again with a $2.50 price target, perhaps they have a good resident meteorologist.

I suppose at least it is some good news for the staunch holders of Kathmandu even if it is just Morningstar, I do reckon they are an analyst that very rarely picks up the phone for a chat with CFO’s though.

It will be a few months before KMD even know where they are going through under new leadership, way too early for BUY ratings just yet IMO, time will come though.


New boss doesn't start for six months so the key winter season will be without him

Hope things will be ok in the short term seems best strategy, but hope is not really a strategy is it.

[okay]

Looking for:

1. Resident meteorologist with particularly good credentials in picking seasons well ahead of time.

2. Tea Lady. Must have experience in not only pouring a good cup of tea but also reading the tea leaves. Would be advantageous if able to clearly articulate potential upcoming adverse events to the CEO.

3. Himalayan chicken bone thrower. If possible originating from the Kathmandu region. Working in conjunction with the tea lady to ratify any positive or negative leads.

These employees can be hired out at a fee when not busy to Pumpkin Patch, Cavalier and The Warehouse.

[Beagle]

Looking for:

1. Resident meteorologist with particularly good credentials in picking seasons well ahead of time.

2. Tea Lady. Must have experience in not only pouring a good cup of tea but also reading the tea leaves. Would be advantageous if able to clearly articulate potential upcoming adverse events to the CEO.

3. Himalayan chicken bone thrower. If possible originating from the Kathmandu region. Working in conjunction with the tea lady to ratify any positive or negative leads.

These employees can be hired out at a fee when not busy to Pumpkin Patch, Cavalier and The Warehouse.

:lol: That's Gold !!

[couta1]

I'll settle for snow to sea level in May would be a good indicator:cool:

[couta1]

I'll settle for snow to sea level in May would be a good indicator:cool:
For now ill settle for the fact that the NZ Super Fund have just added to their holding with your money.

[Snow Leopard]

For now ill settle for the fact that the NZ Super Fund have just added to their holding with your money.

Pity they bought them prior to Monday's price collapse :ohmy:

Best Wishes
Paper Tiger

[winner69]

Pity they bought them prior to Monday's price collapse :ohmy:

Best Wishes
Paper Tiger

No way will they sell now ....would crystallise the loss.

Might need to average down a bit ....cheap last week, cheaper this week

[Beagle]

Massive volume yesterday and today. Bloody good contest between the hopeful and the realists.

[dingoNZ]

Massive volume yesterday and today. Bloody good contest between the hopeful and the realists.


Easy to spot which one you are :D

[winner69]

Massive volume yesterday and today. Bloody good contest between the hopeful and the realists.

Tribeca sold 4.5 million lightening up considerably and no longer a SSH

Wonder who bought. Good deal for who ever did, maybe Superfund averaged down?

[Beagle]

More pain for unfortunate holders $1.40 ouch...while uncertainty remains over prospects for EPS if any in 2015 and while shareholders wait for the new CEO's new broom to sweep up a new approach, (possible significant restructuring costs ?) its hard to see any reason why they should rally ? Short term the outlook looks grim to me.

[bull....]

pumpkin patch anyone

[winner69]

Never reported a loss since IPO but there is always a first time

If things aren't too bad when couta's prediction of snow down to sea level often over winter I reckon they will make $15m odd this year, maybe $20m if lucky (normalised that is) - about 7.5 cents to 10 cents per share.

PE of 10 gives something south of todays price

Remember they essentially increased borrowings to pay most of last years dividend. Free cash flow was pretty minimal

Seems to be more sellers than punters screaming out for a bargain .... maybe buyers know that with Kathmandu those on their mailing list get offered even bigger discounts after the sale has 'officially' finished

[Beagle]

Harbour Asset management ceasing to be a substantial shareholder, notice posted bang on 5.00 p.m.... Those guys are fairly savvy IMHO.
Yes bull, PPL's performance suggests a fundamental change may be occurring in customers preferences in regard to high priced branded apparel.
Cavalier another example of a former big name brand where the brand name seems to mean considerably less to customers now.
Winner 69 - Mate It can't be a bargain with such fundamental uncertainty over forward earnings. I think you're earnings estimate for the year ahead is FAR too optimistic. Company has signalled they need to address customers lack of responsiveness to "so called" sales which clearly signals to me gross margins are going to come under further pressure, such pressure which will be quite significantly exacerbated by a material fall in the Aussie and Kiwi dollars since 1 January. Then there's the strong possibility of potentially quite substantial restructuring costs shortly after the new CEO takes over.
Classic short opportunity for people who are into shorting IMHO.

[tim23]

Thanks for the tips you guys im guessing you are up there in the 2015 tipping comp?

[tim23]

I reckon getting young people to wear puffer jacket s in summer is a marketing coup so don't give up yet!

[couta1]

Interesting article I read in the Business Insider Australia citing a study over a 73 year period that showed that trading the 50MA & 200MA crossover does better than buy and hold but not by all that much and is often swings and roundabouts re correct timing of entry and exit points. I also find it interesting that these big holding companies may sell down a percentage of their holding in the likes of KMD but they continue to retain a far larger percentage of their holding for the long term, just thinking aloud here.

[Baddarcy]

The way i see it is that KMD has had a bad pre-season (Summer), the market seems to be jumping all over it and assuming that means once the season (Winter) gets going proper, the bad form will continue. Personally i think that is a bit of a stretch. Summer in all the places i have been has been hot, The Warehouse ran out of fans earlier than normal. Personally I think KMD is just a victim of the nice weather.

Anyone watching the Blues knows pre season doesn't mean jack. However if the same occurs in Easter, i will happy eat my words :-)

As KMD say they make 70% of their sales in winter.

Apologies for all the rugby analogies ;-)

[BFG]

The way i see it is that KMD has had a bad pre-season (Summer), the market seems to be jumping all over it and assuming that means once the season (Winter) gets going proper, the bad form will continue. Personally i think that is a bit of a stretch. Summer in all the places i have been has been hot, The Warehouse ran out of fans earlier than normal. Personally I think KMD is just a victim of the nice weather.

Anyone watching the Blues knows pre season doesn't mean jack. However if the same occurs in Easter, i will happy eat my words :-)

As KMD say they make 70% of their sales in winter.

Apologies for all the rugby analogies ;-)

If you believe this is a cyclical stock and that the market has overreacted then it's definitely a buy.

I, however, am skeptical of a comoany that is increasing revenues but decreasing margins. Borrowing to pay divvy last year will not happen this year either (ie no silly bugger games!).

Firs thing I'd be looking for is a forward PE of 9-11 (ie still growing slightly and cashflow positive, but negative general market sentiment and iffy outlook for company), as well as NTA value if the company goes into the red (god forbid!)

[GizyGold]

looks like buyers stepping up, lots vollume through on open, perhaps it bottomed out:t_up:

[BFG]

looks like buyers stepping up, lots vollume through on open, perhaps it bottomed out:t_up:

Usually a good sign of it. Next few days will see. $1.50 needs to be broken and SP hold solidly above it.

[Beagle]

#1 purchased stock on the ANZ securities list last week and #2 the week before. This stock is a punters paradise...apparently.
People don't seem concerned that the country in which the company has most of its stores has really low consumer confidence and the outlook for economic prospects is challenging.
Nor do they appear to be concerned that the currency is a new headwind for the company (exacerbating pressure on gross margins) in the present half year having fallen significantly in the last 6-7 weeks.
It must be cheap right:p after all it was $3.90 last year.

[Bjauck]

#1 purchased stock on the ANZ securities list last week and #2 the week before. This stock is a punters paradise...apparently.
People don't seem concerned that the country in which the company has most of its stores has really low consumer confidence and the outlook for economic prospects is challenging.
Nor do they appear to be concerned that the currency is a new headwind for the company (exacerbating pressure on gross margins) in the present half year having fallen significantly in the last 6-7 weeks.
It must be cheap right:p after all it was $3.90 last year.
I must admit I am not sure what the point is of that ANZ Secs list. After all for every seller there is a buyer. It depends on how good you think the average ANZ Secs client is at stock selection I guess.

[Beagle]

Its there for those sheep that think following the herd is a good idea :)

[BFG]

Its there for those sheep that think following the herd is a good idea :)

Gives a bearing on market sentiment as it compares buy and sell ratios. Cons are that it's out of date by a week (ie the market has already moved!) and only compares ANZ customer buy/sell orders.

Baaaaaaaaa!

[Baddarcy]

The Chairman, a Director and the CFO all seem keen, can't be a bad thing.

[Beagle]

The Chairman, a Director and the CFO all seem keen, can't be a bad thing.
Tunnel vision ?... its not like any of them have truly meaningful stakes in the company considering the numeration they get from it.
If they were buying lots of 100,000 or more and really putting their knackers on the line it might really mean something.

[Baddarcy]

Tunnel vision ?... its not like any of them have truly meaningful stakes in the company considering the numeration they get from it.
If they were buying lots of 100,000 or more and really putting their knackers on the line it might really mean something.

So your saying its a bad thing? Yes its not a huge amount they are investing but $50k i wouldn't call pocket money.

Holland = $NZD 29,600
Kirk - $AUD 50,347.22
Casey = $NZD 29,993.25

[bunter]

Chairman is David Kirk - also on TME, was on Fletchers.

Also IIRC setting up an 80's style investment company to invest in tech companies.

Hmmm.

[Beagle]

So your saying its a bad thing? Yes its not a huge amount they are investing but $50k i wouldn't call pocket money.

Holland = $NZD 29,600
Kirk - $AUD 50,347.22
Casey = $NZD 29,993.25

How much are they paid by the company ?

[sb9]

Interesting to see couple of big SSHs issued this afternoon, looks like Fisher Funds sold out some and NAB bought some.

[Beagle]

I did some digging to put the size of the recent director CFO and Chairman's purchase into proper perspective.
2014 annual report shows Chairman's remuneration is $244k non exec directors $128K.
Salary bands are 1 person earning between $1.13 - 1.14m must be CEO and the next band down is 1 person earning $630K - $640K probably CFO.
While I would agree that its a better sign that they're buying some than doing nothing or selling its hardly like they're betting the ranch on it, (in terms of their remuneration) is it !!
Fascinating tussle with institutions changing their holdings at considerable pace.

[sb9]

Fascinating tussle with institutions changing their holdings at considerable pace.

Wonder where Fisher Funds might be looking to invest with that money.

[winner69]

Goldman become a SSH

But the detail of he trades on pages 7 to 16 make intriguing reading. More sells than buys
https://www.nzx.com/files/attachments/207836.pdf

Must be a story there somewhere seeing they are clever dudes.

And remember Goldman were the ones who helped float KMD

[GoldenStag]

Goldman become a SSH
More sells than buys


But the fact they are now a SSH mean that the total buys is greater than the sells, no?

They are indeed clever dudes, and this SSH looks like their client base trasactions, meaning their clients are buying up, presumably on some advice from GS.

So we have Harbour Asset Management, Tribeca, Fisher Funds, and NAB all selling down. And we have GS buying.

It is the Fisher Funds selling down which concerns me. They are usually pretty good, and I have effectively bet against them by buying some shares.
The other Australian funds aren't such a bother as they will be in turmoil with their Australian portfolios at the moment and may be doing triage across the board.

The macro conditions for KMD aren't good because they have 2/3 store exposure to the Australian market. The stronger NZD forex is unfavourable for KMD, and Australia is heading into a consumer-wallet-tightening ramp down.

The micro conditions are probably better for KMD in that they can freeze their dividend, stop their expansion in Australia, and perhaps slice staff to control their cost base.

I think at the price it is a good buy, but let's hope Australians are still happy about spending this year. Maybe we should wish for a cold Australian winter?

[sb9]

Yep, a stronger NZD against AUD does not bode well for company's performance in coming years.

[winner69]

Goldman still buying

[GoldenStag]

Looks like the GS guys are still going. Another 1% movement. Weird how their relevant event is 10th Feb, earlier than their last disclosure.

[GoldenStag]

GS still going. Up to 8.5% now. Pretty soon, we'll need someone from GS on the board.
What happens when GS gets its fill?

[Jaa]

Some good news for Kathmandu, FCO following Mountain Designs out of NZ.

FCO shutting down NZ stores (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11404628)

[GoldenStag]

Goldman now at 10.4425%
Maybe they know something we don't?

https://www.nzx.com/companies/KMD/announcements/260945

Perhaps they are taking a punt on the NZD/AUD forex changing? (super cycle for forex says this is the max, but past history is not necessarily an accurate representation of future events)

[GoldenStag]

Australian Super upping their holding...

https://www.nzx.com/companies/KMD/announcements/260952

[TheHunter]

Australian Super must have changed their minds.... https://www.nzx.com/companies/KMD/announcements/261751

[macduffy]

Australian Super must have changed their minds.... https://www.nzx.com/companies/KMD/announcements/261751

Some pretty active trading in the stock disclosed there!

[TheHunter]

Some pretty active trading in the stock disclosed there!

Looks like they haven't finished either.

[TheHunter]

First half results up:

https://www.nzx.com/companies/KMD/announcements/262197

Loss of 1.8m, in line with the trading update of a loss in the range of 1 - 2m.

[Beagle]

Bottom end of guidance range. Strange that they would declare a dividend when they're making a loss...trying to keep shareholders on side for a future rights issue ?

[couta1]

Bottom end of guidance range. Strange that they would declare a dividend when they're making a loss...trying to keep shareholders on side for a future rights issue ?
The final divvy later in the year is the bigger one so that will probably get a good haircut if sales don't improve very much doubt there will be any rights issue, remember this could all turn around quickly with good winter sales over the upcoming months unfortunately no one except God himself is able to give us an answer on that one. Disc-Holding

[pennyacw]

You need to keep in mind that over the last four years 58% of Revenue and 77% of EPS have been obtained in H2 of the financial year. The products they sell in the winter season are higher margin and they have less competitors that can provide the quality products KMD makes, it is almost a different market in many ways.

It is not all bad. Operating cash, although negative, is up on last year and they still have pretty good profitability over the last 12 months. Their earnings yield is not as attractive as it once was. But the business still looks pretty good.

They just need to sort out their leadership team and get some stability going forward.

[TheHunter]

They just need to sort out their leadership team and get some stability going forward.

The new CEO - Xavier Simonet stepping in should help with this.

[Beagle]

The final divvy later in the year is the bigger one so that will probably get a good haircut if sales don't improve very much doubt there will be any rights issue, remember this could all turn around quickly with good winter sales over the upcoming months unfortunately no one except God himself is able to give us an answer on that one. Disc-Holding

Looks like Fishing Camping and Outdoors are closing down ? or is this just a creative sales pitch and they're moving online only, don't know ?
But if correct and they are closing their 13 retails stores this might help KMD shareholders a bit. That said it looks like sales in Aussie where they have most of their stores are still soft for KMD and all the signs are there that conditions will remain challenging for retail in Australia. Plenty of risk left in this puppy IMHO.
http://www.fco.co.nz/#PR_ONSALE

Bottom line is that although this result was within previously indicated guidelines the market doesn't like it and the stock is now down quite significantly (circa 8.5% at time of this amended comment). The market appears to have been wanting to see a clearly articulated / revised strategy to meet changing retail conditions. Maybe Mr market expected a cessation to the store roll-out until profitability has been restored ?

[winner69]

You need to keep in mind that over the last four years 58% of Revenue and 77% of EPS have been obtained in H2 of the financial year. The products they sell in the winter season are higher margin and they have less competitors that can provide the quality products KMD makes, it is almost a different market in many ways.

It is not all bad. Operating cash, although negative, is up on last year and they still have pretty good profitability over the last 12 months. Their earnings yield is not as attractive as it once was. But the business still looks pretty good.

They just need to sort out their leadership team and get some stability going forward.

One hopes at this year more than 100% of earnings comes in H2

[winner69]

This slide from their presentation suggests that it isn't just this half year being the problem

Wow look at that declining same store growth chart I have circled. Suggests something fundamentally wrong /not working

At least it is still positive but with declining margins doesn't paint a healthy picture. No wonder the share price has taken another dive today

The new leader has an enormous task ..... good luck to him, he needs it methinks

[Wallace D]

This slide from their presentation suggests that it isn't just this half year being the problem

Wow look at that declining same store growth chart I have circled. Suggests something fundamentally wrong /not working

At least it is still positive but with declining margins doesn't paint a healthy picture. No wonder the share price has taken another dive today

The new leader has an enormous task ..... good luck to him, he needs it methinks


Hi Winner, the thing that jumped out at me in the HY report, was they stated that: our Xmas trading and sales through January did not produce the sales we expected, our analysis tells us that contributing factors included, "promotional campaigns did not drive the expected foot traffic".

My concern it that they also say their 2016 focus in on increasing on-line sales, a valid part of the business, but with most retailers still stating about 95% of revenues still come from inshore sales, this is no golden egg?

Mobile-centric marketing and increased personalization is the way big retailers are going. The demographic of KMD's customer's would probably suit the products Vmob has to offer, as shareholders it may be worth mentioning.

Wallace D (not Holding, but monitoring)

[TheHunter]

Looks like Fishing Camping and Outdoors are closing down ? or is this just a creative sales pitch and they're moving online only, don't know ?
But if correct and they are closing their 13 retails stores this might help KMD shareholders a bit. That said it looks like sales in Aussie where they have most of their stores are still soft for KMD and all the signs are there that conditions will remain challenging for retail in Australia. Plenty of risk left in this puppy IMHO.
http://www.fco.co.nz/#PR_ONSALE


They are closing all 13 NZ stores, as previously posted:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11404628

[GoldenStag]

12.4% drop today. A bit of a bigger drop than I expected.

[couta1]

12.4% drop today. A bit of a bigger drop than I expected.
You shouldn't be surprised after all your dealing with a schizophrenic market which can be trusted about as much as an angry bull in a China shop. ( Just more nervous Nellie's being shaken out)

[JayRiggs]

She'll be right. Mr Xavier Simonet's extensive experience with women's handbags will add a much needed feminine touch to Kathmandu and bring more ladies to the shops.

disc: holding

[Master98]

The final divvy later in the year is the bigger one so that will probably get a good haircut if sales don't improve very much doubt there will be any rights issue, remember this could all turn around quickly with good winter sales over the upcoming months unfortunately no one except God himself is able to give us an answer on that one. Disc-Holding

surprised me you still hold this stock:confused:, should cut your loss as early as can.

[Master98]

She'll be right. Mr Xavier Simonet's extensive experience with women's handbags will add a much needed feminine touch to Kathmandu and bring more ladies to the shops.

disc: holding

lol he is not GOD.

[couta1]

surprised me you still hold this stock:confused:, should cut your loss as early as can.
Will sit this one out besides winter is nearly upon us so will soon be time to get out my high quality Kathmandu ski suit and hit the slopes. PS- Praying for a harsh winter

[Master98]

Will sit this one out besides winter is nearly upon us so will soon be time to get out my high quality Kathmandu ski suit and hit the slopes. PS- Praying for a harsh winter

good on you mate, I sold mine at $2.0 with loss, won't back in the near future.

[neyney2010]

Don't know why I keep buying crap stocks. Hope you're right couta1.

[TheHunter]

Don't know why I keep buying crap stocks. Hope you're right couta1.

Crap stock? Or just bargain prices?

[Baa_Baa]

Crap stock? Or just bargain prices?

ASX close suggests a follow on down tomorrow, close A$1.375

[mayday]

Crap stock? Or just bargain prices?

may be just another ppl

[TheHunter]

ASX close suggests a follow on down tomorrow, close A$1.375

A$1.375 = NZ$1.41, but could always still go down.

[winner69]

Somebody asked what did the financials actually say.

Comparing H114 to H115 profit before tax is down $16.8m, like $15.0m last year to a loss of $1.8m this year. How come?

Well they did sell quite a lot more. Positive impact $7.5m. Good

Gross margin down 4.6% points from extra discounting and getting rid of excessive stock. Negative impact $8.3m Really bad

More stores more rent. Net increase in rents $3.5m. Part of growth strategy but not matched by increased sales.

More stores and growth probably contributed to increasee in Other Selling Expenses of $6.5m. Not really that good.

Don't know what caused this but Admin and General Expenses were up $6.2m. Doesn't look like things are under control does it.

Put all that together and that's why npbt was $16.8m down on last year.

Store expansion costing heaps but not resulting in increased sales and margins really under pressure. Surely these factors are going to come through H215 as well. A busier half and if things are not quite as bad as H1 I will stick to my $10m to $15m FY15 forecast. But things have to get better eh and this doesn't support a divie anywhere near last years level.

Man on radio said same store sales down last couple of months. Makes that chart I highlighted yesterday even more ominous. Something fundamentally wrong.

[Beagle]

Very good analysis there W69.
It seems to me that they need a major restructure / efficiency review. Time for some of the fat cat exec's to take a serious haircut with their bloated salaries / perks ?
I completely agree that there seems to be systemic issues within this company.

[vorno]

*Walk into Kathmandu, want a pair of shorts... no I don't want to pay ~$100. Cya, I'm off to one of the many other outdoor retailers for a lower price!

The end.

[BlackPeter]

*Walk into Kathmandu, want a pair of shorts... no I don't want to pay ~$100. Cya, I'm off to one of the many other outdoor retailers for a lower price!

The end.

You mean you managed to find a time slot without any big sale? Maybe they just had their annual stock take and forgot to put up the next "sale" posters. With Christmas, Boxing day, Waitangi day and end of season sale gone it must be now the Easter sell period. Lol. Nobody buys at Kathmandu unless products are at least 60% discounted ...

[Antipodean]

You mean you managed to find a time slot without any big sale? Maybe they just had their annual stock take and forgot to put up the next "sale" posters. With Christmas, Boxing day, Waitangi day and end of season sale gone it must be now the Easter sell period. Lol. Nobody buys at Kathmandu unless products are at least 60% discounted ...

Otherwise known as the Briscoes method of pricing. Seems to be working out better for them in recent times.

[Beagle]

Otherwise known as the Briscoes method of pricing. Seems to be working out better for them in recent times.

It works for Briscoes because they basically invented the disingenuous sale pricing model and have a sale every Thursday and every weekend.
If you're going to use this B.S. sale tactic and grossly inflated prices at other times, (A pricing model I detest), then you need to have really frequent sales and lots of advertising.

[vorno]

You mean you managed to find a time slot without any big sale?...

lol yeah... I went in during one of their sales, but the shorts were full-price unfortunately!

[winner69]

lol yeah... I went in during one of their sales, but the shorts were full-price unfortunately!

Plenty of shorts on sale on website
http://www.kathmandu.co.nz/mens/trousers/shorts.html


My inbox getting daily reminders of the Easter sale and special offers just for me. A bit of overkill really ......supoose a lot of their 1.2 million summit club members feel the same way

[Beagle]

Plenty of shorts on sale on website
http://www.kathmandu.co.nz/mens/trousers/shorts.html


My inbox getting daily reminders of the Easter sale and special offers just for me. A bit of overkill really ......supoose a lot of their 1.2 million summit club members feel the same way

Sounds like a very exclusive club with very special spam benifets :D
I suspect the tens of thousands of people unemployed from restructuring in the mining, oil and gas sectors in Australian are now buying their shorts from Target and K Mart.

[pennyacw]

Despite my posts earlier I do not claim to be an expert in this company, as I have only bought this company due to it having good returns on operating capital and a strong earning yield over the last 12 months. However, there does not appear to be much logic or long-term outlook involved in analysing the recent announcements.

I think the reaction is much like a dairy shop owner running around with his paints down screaming, as a result of selling 15 bags of ships this month instead of the 20 packs he sold last month. Seems a little to emotional.

[winner69]

Despite my posts earlier I do not claim to be an expert in this company, as I have only bought this company due to it having good returns on operating capital and a strong earning yield over the last 12 months. However, there does not appear to be much logic or long-term outlook involved in analysing the recent announcements.

I think the reaction is much like a dairy shop owner running around with his paints down screaming, as a result of selling 15 bags of ships this month instead of the 20 packs he sold last month. Seems a little to emotional.

But the period before the 20 packs of ships he sold 25 packs of ships and the period before that he sold 30 packs of ships and the period before that he sold 35 packs of ships

Get the picture - no wonder his pants are down.

To be fair the story with KMD is actually selling 1 more pack of ships when everybody thinks he should be selling 3 more packs of ships ..... but then again this morning the man on the radio said he was now selling less packs of ships than before. Ouch

(suppose you meant to say chips)

[percy]

But the period before the 20 packs of ships he sold 25 packs of ships and the period before that he sold 30 packs of ships and the period before that he sold 35 packs of ships

Get the picture - no wonder his pants are down.

To be fair the story with KMD is actually selling 1 more pack of ships when everybody thinks he should be selling 3 more packs of ships ..... but then again this morning the man on the radio said he was now selling less packs of ships than before. Ouch

(suppose you meant to say chips)

Classic Winner69.
Life was so boring while you were away.!! lol.

[iceman]

Now I remember why I missed him when he took his leave recently :D


Classic Winner69.
Life was so boring while you were away.!! lol.

[pennyacw]

But the period before the 20 packs of ships he sold 25 packs of ships and the period before that he sold 30 packs of ships and the period before that he sold 35 packs of ships

Get the picture - no wonder his pants are down.

To be fair the story with KMD is actually selling 1 more pack of ships when everybody thinks he should be selling 3 more packs of ships ..... but then again this morning the man on the radio said he was now selling less packs of ships than before. Ouch

(suppose you meant to say chips)

The point is even with out the growth story they still provide good earnings yield to be classed as a good investment story. As you say, it is more of a case of selling 1 more as appose to 3 more, but people are over reacting on the declining in growth story.

[GoldenStag]

The point is even with out the growth story they still provide good earnings yield to be classed as a good investment story. As you say, it is more of a case of selling 1 more as appose to 3 more, but people are over reacting on the declining in growth story.

This part is fine, but the forex kills off most of any medium and long term happiness. Chinese supply deals would be done in USD, and 2/3 of KMD sales would be done in AUD. The profit is then worked out in NZD which goes badly on the NZD side for both of these. Higher cost, lower revenue, less margin.

So, saying that it is okay in the medium and long term is to say that the Australian economy (i.e. forex) is going to be okay in the medium and long term. And most people would say that isn't a sure bet. The Chinese aren't expected to go gangbuster on Aussie ore etc in the next 5-10 years. So, the forex isn't expected to revert suddenly and cut KMD a break.

I'm not saying it is all forex, but it certainly isn't helping and any margin squeeze in the short term on top of this won't help. Exec level decisions can't get around the forex unless they start manufacturing in Australia :-)

[pennyacw]

Yes, good point - I get what you mean. I would say (think you may have already stated this point) that you would hope companies and therefore investors do not invest and put together business structures based on forex arrangement. It would be a fairly speculative act in my view.

Sound point though - can't do a thumbs up on this.

[Beagle]

The point is even with out the growth story they still provide good earnings yield to be classed as a good investment story. As you say, it is more of a case of selling 1 more as appose to 3 more, but people are over reacting on the declining in growth story.

Be very careful with historical earnings yield...can look increasingly attractive all the time as the SP keeps declining. Classic value trap this one. Consensus brokers SP target 12 months out is still $2.20...was a widespread buy by many analysts last year with a target price of $4. If one extrapolates this, brokers will be rating it a buy this time next year with a price target of $1.10 and the SP will be about 70 cents. Analysts trying to cover their butts while Rome burns ?

[pennyacw]

Yes, there are other things to look at. But if you look at historical data, historical earnings yield is a good predictor (not all the time) of investment returns for a collection of stocks. Research on the NZX and ASX market shows similar outcomes to the research conducted by value investors on US markets.

[Beagle]

Yes, there are other things to look at. But if you look at historical data, historical earnings yield is a good predictor (not all the time) of investment returns for a collection of stocks. Research on the NZX and ASX market shows similar outcomes to the research conducted by value investors on US markets.

Try telling that to Pumpkin Patch and Cavalier shareholders...

[couta1]

I stand by my belief that this company will turn things around given time no matter what anyone else says on here, just saying:cool:

[Beagle]

I stand by my belief that this company will turn things around given time no matter what anyone else says on here, just saying:cool:

"Hope springs eternal"...you've watched Shawshank Redemption too many times mate :)

[h2so4]

I stand by my belief that this company will turn things around given time no matter what anyone else says on here, just saying:cool:

What if I said they didn't manage one turnover of stock in the previous 6 month period.
What if I also said they burnt through $30m cash over and above the $1.8m reported loss for the same period.

[percy]

I stand by my belief that this company will turn things around given time no matter what anyone else says on here, just saying:cool:

What a great day it has been on this thread;first of all Winner69's classic post #632,and now Couta1's.
I am enjoying the great humour!!! lol.

[couta1]

"Hope springs eternal"...you've watched Shawshank Redemption too many times mate :)
Yeah im a bit of an eternal optimist but then again ive probably weathered a bigger battering on the sharemarket than most on here over the last couple of years and its far from over looking at the red arrow at the bottom of my portfolio by ive learnt heaps and have always found a never say die attitude to come out trumps in the end.

[noodles]

Yeah im a bit of an eternal optimist but then again ive probably weathered a bigger battering on the sharemarket than most on here over the last couple of years and its far from over looking at the red arrow at the bottom of my portfolio by ive learnt heaps and have always found a never say die attitude to come out trumps in the end.

Couta, While I'm not suggesting you are wrong in this case, I consider one of my strengths is admitting that I'm wrong, selling, and redeploying funds. I.e. Sell the dogs, hold onto winners. A never say die attitude is more appropriate to marathon runners, not investment.

[winner69]

What if I said they didn't manage one turnover of stock in the previous 6 month period.
What if I also said they burnt through $30m cash over and above the $1.8m reported loss for the same period.

Nearly $100m of stock is frightening eh, esp when they only sold $73m of goods in the half year.

They have more than 7 months sales in stock .......hope most of it is what the likes o couta wants / needs. Looks like plenty more sales needed to clear this mountain.

Cash burn ....I reckon only $16m in the half ......only, heck that's quite a lot.

No worries though, a turn around is under way I believe and new big shareholder is happy

[h2so4]

Nearly $100m of stock is frightening eh, esp when they only sold $73m of goods in the half year.

They have more than 7 months sales in stock .......hope most of it is what the likes o couta wants / needs. Looks like plenty more sales needed to clear this mountain.

Cash burn ....I reckon only $16m in the half ......only, heck that's quite a lot.

No worries though, a turn around is under way I believe and new big shareholder is happy

Well I hope the turn around turns.

They can always hock off their stock on trademe with a few Harmoney loans. :)

[percy]

Old stock for retailers is a nightmare.It clogs up the whole system.In the shops it takes up valuable space.New stock can not be displayed because of the old stock.So sales are affected.You can not just turn off the supply of new stock as lead times from China/India are often long.Then where do you put the new stock.Store it in a warehouse until there is room in the shops? Discount the hell out of the old stock to make room for new stock? That leads to people buying up the old stock,but stops them buying the new stock. So we see very quickly old stock is near worthless.Glassons used to give their old stock to the Salvation Army.
Maybe we will see The Army advertising $599 puffer jackets at $29.99?

[winner69]

A must read
https://www.nzx.com/files/attachments/210341.pdf

Chelsea from Forbar asked a few questions, I sense an upgrade from them

Me, didn't really inspire me or instil any confidence for the future. But they say they on track for better times couta

Most telling comment - they have a best,better, good ranging strategy .....and bugger me those stupid consumers / customers are gravitating to the good end. Jeez customers are stupid not buying the best stuff.

And it looks like I am a target being a Summit Club member. At least we are going to get cheaper prices, that should help margins? A lot seems to depend on this summit club,

[BIRMANBOY]

I think Groucho Marx said "I wouldn't want to join any club that would accept me as a member":) More to the point..any business that doesn't control their stock efficiently, both buying and sales segments and allows the stock turnover rate to stretch out is going to be struggling.

[Beagle]

Yep, whilst stock at cost is down on the pcp at $97.3m and using a stated GP margin of 59% that suggests a sales value of $237m.
Sales are averaging just on $30m a month so even at the lower stock level as reported this time that's 7.9 months, (call it 8 months for rounding) of total group sales represented by stock as at balance date and that after aggressive discounting to clear slow moving stock as stated by the company !! I'm not quite sure what to make of this other than to suggest some stock must be basically obsolete / no longer in fashion or otherwise extremely difficult to shift ?
Maybe its time for a real sale :)

[ratkin]

Maybe its time for a real sale :)

This is a big part of their problem. Everybody now knows that their sales are not real. You see an item with a price tag of 100$ reduced from 300$ , instead of thinking thats a bargain, you just know that the thing has never actually been sold for 300 in the first place.
Massive stores, filled with fleecy crap, at prices you cant trust.

[sb9]

This is a big part of their problem. Everybody now knows that their sales are not real. You see an item with a price tag of 100$ reduced from 300$ , instead of thinking thats a bargain, you just know that the thing has never actually been sold for 300 in the first place.
Massive stores, filled with fleecy crap, at prices you cant trust.

Very true, hv never bought anything from Kathmandu unless on special for the third time...usually on clearance. I guess many of us are like that, no one wants to pay RRP as there will be on sale soon. Makes you wonder abt their price strategy.

[winner69]

Apparently there are murmurings that following some 'complaints' the Commerce Commision are looking at the Kathmandu and others about their pricing ......like is the ticket prices real price meaning discounts stated are 'deceptive'

[percy]

Apparently there are murmurings that following some 'complaints' the Commerce Commision are looking at the Kathmandu and others about their pricing ......like is the ticket prices real price meaning discounts stated are 'deceptive'

I am not sure what the latest regulations are, but they used to be, an item had to be on display in store for a month at "full price" before it could be shown as a genuine "full price".Stores would get around this by having their "sale" stock arrive in store just a few weeks before "the sale".
In the book trade you could not state "usually"such and such price unless you had had it for sale at that price.The way round it was to put the publisher's recommended retail price,then your sale price.
The Commerce Commission did try to stop publishers/wholesalers/manufacturers putting recommended retail prices.
The other bad practice was retailers advertising 300 only on sale,when they only had 50 to 100.
And another bad practice was advertising a product you had no stock of, to get people into your store,and then saying you had sold out of it,but we have this, which is better value.!!!!! lol.

[Beagle]

Hmmmm, Interesting discussion on deceptive trade practice.
I know of one vehicle importer that's well known in Auckland parallel importing high end Euro cars that is currently running an end of financial year sale PROMOTING MASSIVE END OF FINANCIAL YEAR DISCOUNTS...except that it appears most of the cars are the same prices they were in January and February. Fair Trading Act breech ?, you be the judge. (Yes I confess I'm a car enthusiast and have too many saved on my trade me watchlist just in case they're having a real sale at some stage)

I believe the average consumer thinks most retailers have cried wolf so many times Sale becomes spurious marketing noise.

The other day I noticed Fishing Camping and Outdoors having a closing down sale and I'm quite surprised that they really are closing down in due course. Don't get suckered into their first closing down sale though currently on, the really big discounts will come closer to 30 June when the super retail group in Australia that own them are on record as saying they want to shut it down by balance date. This last closing down sale by FCO will provide hot competition for the consumer dollar in this segment for a little while to come. A real sale of goods in this sector is coming in June, mark it down in your Diary :)

[winner69]

Hmmmm, Interesting discussion on deceptive trade practice.
I know of one vehicle importer that's well known in Auckland parallel importing high end Euro cars that is currently running an end of financial year sale PROMOTING MASSIVE END OF FINANCIAL YEAR DISCOUNTS...except that it appears most of the cars are the same prices they were in January and February. Fair Trading Act breech ?, you be the judge. (Yes I confess I'm a car enthusiast and have too many saved on my trade me watchlist just in case they're having a real sale at some stage)

I believe the average consumer thinks most retailers have cried wolf so many times Sale becomes spurious marketing noise.

The other day I noticed Fishing Camping and Outdoors having a closing down sale and I'm quite surprised that they really are closing down in due course. Don't get suckered into their first closing down sale though currently on, the really big discounts will come closer to 30 June when the super retail group in Australia that own them are on record as saying they want to shut it down by balance date. This last closing down sale by FCO will provide hot competition for the consumer dollar in this segment for a little while to come. A real sale of goods in this sector is coming in June, mark it down in your Diary :)

That analyst briefing they intimated that FCO closing down action is a threat to KMD

Also interesting they said Torpedo was doing OK as well.

Bugger bugger says some KMD shareholders ......along with a warm winter things could get a bit desperate

[winner69]

One other dodgy pricing activity is Mitre 10 and Bunnings and their find a better price and we'll beat it by 15%

What incentive for either to reduce the price of popular products they both stock - none. Prices stay up and consumer loses out even though they think they getting the best / lowest price.

In some states of the USA this practice is seen as a form of price fixing and illegal.

[Jay]

And in some cases only one of them stocks a certain brand - Is it Bunning's with Ryobi, cannot buy them anywhere else apart from Bunnings.
MITRE 10 mega originally promoted we do have sales our prices are always low, now they have Bathroom events, garden events etc - a sale by any other name

Or the conditions are so complicated, it won't happen anyway, Brisoces have started this now, another who are always on sale, however the difference between them and KMD is they seem to be doing really well.

[Onion]

Very true, hv never bought anything from Kathmandu unless on special for the third time...usually on clearance. I guess many of us are like that, no one wants to pay RRP as there will be on sale soon. Makes you wonder abt their price strategy.

When recently looking for a jacket for my daughter the Kathmandu staff were actively encouraging us NOT to buy until the Easter sale.

[sharp]

I anticipate a SSH notice to come through for a holding by a conservative fund/institution.

[macduffy]

Another small burden for Kathmandu:

Macpac's Easter sale is being advertised with some "Kathmandu-like" reductions!

:ohmy:

[vorno]

Another small burden for Kathmandu:

Macpac's Easter sale is being advertised with some "Kathmandu-like" reductions!

:ohmy:

...I went on a multi-day hike not so long ago with ~7 people. They all had Macpac backpacks.
Coincidence?

[macduffy]

...I went on a multi-day hike not so long ago with ~7 people. They all had Macpac backpacks.
Coincidence?

No, not coincidence. More likely that you seek out discerning companions.

;)

[winner69]

And in some cases only one of them stocks a certain brand - Is it Bunning's with Ryobi, cannot buy them anywhere else apart from Bunnings.
MITRE 10 mega originally promoted we do have sales our prices are always low, now they have Bathroom events, garden events etc - a sale by any other name

Or the conditions are so complicated, it won't happen anyway, Brisoces have started this now, another who are always on sale, however the difference between them and KMD is they seem to be doing really well.

Ryobi at Bunnings and not at M10 so no 'price beating' and consumers pay more than if there was competition. Mitre 10 hooked up with Black and Dekker so no 'price beating' and consumers pay more than they should.

But as long as shoppers reckon they getting lowest price and a good deal its all honky dory

[sharp]

The patchy weather today and forecast (and probably the Easter/Autumn sale) seems to have triggered a few Shortlanders to purchase Kathmandu goodies today.

Surely, I can't be the only one to think that KMD has an attractive P/E ratio and dividend payout. Yes, sales were down last year, but it was an unusually warm winter and made it difficult for retailers see WHS. One hopes for a harsh winter.

[Baddarcy]

Surely, I can't be the only one to think that KMD has an attractive P/E ratio and dividend payout. Yes, sales were down last year, but it was an unusually warm winter and made it difficult for retailers see WHS. One hopes for a harsh winter.

I can only assume the market believes that the P/E ratio will decline, but yes you're right it does look attractive at the moment.

[sharp]

http://www.nbr.co.nz/article/who-might-be-interested-kathmandu-cs-p-170853

"Analysts have flagged that Kathmandu’s rapid share price fall after results were released last week could trigger takeover interest "

Any guesses as to who might be involved with the recent large off-market transactions?

[winner69]

When I read the first paragraph I thought how the gods are conspiring against KMD again with a warm autumn. El Nino last thing they needed

http://www.stuff.co.nz/national/67601691/el-nino-weather-conditions-likely-for-nz

But it's all honky dory ...later on it said 'Looking ahead to the winter months, el nino typically brings "more intense and more frequent southerlies and that will bring more colder conditions"

Yippee

[Beagle]

http://www.nbr.co.nz/article/who-might-be-interested-kathmandu-cs-p-170853

"Analysts have flagged that Kathmandu’s rapid share price fall after results were released last week could trigger takeover interest "

Any guesses as to who might be involved with the recent large off-market transactions?

April fools joke ? Still trading on quite demanding multiples given the circumstances. Brokers seem to be picking about $17m earnings for them for the current year, (I'd be very surprised if they make that much), putting a retail stock with a chequered history on mid teens PE. Yeah right, really compelling value there...

[Tomtom]

When I read the first paragraph I thought how the gods are conspiring against KMD again with a warm autumn. How is it they've not managed to engage clients in buying every season? In winter you sell them jackets, hats and gloves then when summer comes shorts, t-shirts and canvas shoes.

I'll be a watcher until there is some evidence they are likely to turn the situation around.

[Wolf]

Less risky investments around in my opinion. Not a sector i'd want to be in either.

The dividend yield is a bad way to look at this company as if it is fully paid this year, they are effectively borrowing to pay the dividend.
Future earnings outlook looks shady as well.


New CEO looks promising.
Looking back over the last few years operating costs have spiked quite often, so managements control over costs is the issue here.
It all depends on whether this year is a one off and whether the company can turn around.
They need to focus less on rolling out stores everywhere and more on getting those margins back up.

The rising debt is also a concern, don't want to see another pumpkin patch here.

[Baddarcy]

This weather won't be doing KMD's NZ stores any harm me thinks.

[TheHunter]

This weather won't be doing KMD's NZ stores any harm me thinks.

I popped into my local KMD yesterday, it was rather busy and seen multiple sales take place in just a few mins. Mac Pac across the road looked suprisingly empty.

Would be interesting to know what the vibe of KMD stores is like in other areas if anyone else has paid a visit?

[Beagle]

This weather won't be doing KMD's NZ stores any harm me thinks.

No it won't and neither will the fact that T.V. one's field operation staff reporting on the weather from out in the cold always seem to be kitted up in Kathmandu gear....but to be honest I think this stock needs all the help it can get and then some.

[neyney2010]

No it won't and neither will the fact that T.V. one's field operation staff reporting on the weather from out in the cold always seem to be kitted up in Kathmandu gear....but to be honest I think this stock needs all the help it can get and then some.


Agree. Will dup everything, once the stock bounces back a bit. This will be another PPL.

[winner69]

I popped into my local KMD yesterday, it was rather busy and seen multiple sales take place in just a few mins. Mac Pac across the road looked suprisingly empty.

Would be interesting to know what the vibe of KMD stores is like in other areas if anyone else has paid a visit?

There were a couple of people outside my nearest store at 9 this morning .....that's good for KMD I thought seeing it was probably minus something in the wind

Turned out they were staff ...........waiting for the manager to turn up

When I went past ten minutes later the store was open but no customers.

[MAC]

The first snow is on the port hills in Christchurch today, quite a big dump it was too;

I counted a total of only 4 customers in the Tower Junction Kathmandu this morning including myself, but there is just so much competition now.

Within 50m of that Kathmandu shop there is also a Bivouac, a MacPac, a Torpedeo 7 and a High Country.

After looking through them all and being a bit blinded for choice, I ended up buying what we were after, hiking boots for my daughter, from High Country.

On a positive note though, the friendly sales women at the Kathmandu tried to sign me up for the summit club for just $8, which is lower than I thought it was, it used to be $100 if I recall.

[Beagle]

The first snow is on the port hills in Christchurch today, quite a big dump it was too;

I counted a total of only 4 customers in the Tower Junction Kathmandu this morning including myself, but there is just so much competition now.

Within 50m of that Kathmandu shop there is also a Bivouac, a MacPac, a Torpedeo 7 and a High Country.After looking through them all and being a bit blinded for choice, I ended up buying what we were after, hiking boots for my daughter, from High Country.

On a positive note though, the friendly sales women at the Kathmandu tried to sign me up for the summit club for just $8, which is lower than I thought it was, it used to be $100 if I recall.

WOW !! Factor in the prolific growth of online sales and our ability to buy from overseas GST free, (not sure for how much longer) and that's the problem for KMD right there. Well not quite.
Fishing Camping and Outdoors are still having their closing down sale for their 13 north island branches with prices which really are on sale, not faux sale prices like elsewhere.

[Baddarcy]

News release from the Aussie Met Service, predicting that winter will be warmer but wetter than 'normal'.

Warmer = Bad but Wetter = Good.... so fairly neutral looking to me

http://media.bom.gov.au/releases/157/latest-update-confirms-chance-of-el-nio-more-likely/

[couta1]

News release from the Aussie Met Service, predicting that winter will be warmer but wetter than 'normal'.

Warmer = Bad but Wetter = Good.... so fairly neutral looking to me

http://media.bom.gov.au/releases/157/latest-update-confirms-chance-of-el-nio-more-likely/
Warmer in Aussie also equals good as less snow over there will force more Aussies this way on all those extra flights provided by Air NZ and of course they will need all that high quality Kathmandu gear purchased in Aussie before they arrive aye:cool:

[Baddarcy]

This feels like a stock that is trying to rise, but it being held back by a seller (presumably just one) who every day or so drops a 100k share parcel on it.

Another one first thing this morning.

[emveha]

Good on them http://www.kathmandu.co.nz/get-to-know-us/company-news/nepal-earthquake-response

[winner69]

Google Adwords or whatever has helped them .......more than usual Kathmandu ads pop up when reading about the disaster

Spose that how the world works these days

[TheHunter]

Also now appealing in store to help raise funds, glad to see they're doing their part. Good on ya KMD.

[couta1]

I see in the Herald this morning that low interest rates are fueling Aussie spending in clothing,footwear and accessories should be good for KMD especially with the winter approaching:cool:

[bull....]

I see in the Herald this morning that low interest rates are fueling Aussie spending in clothing,footwear and accessories should be good for KMD especially with the winter approaching:cool:

saw it 2 , and the lower aus/nz xrate will help all retailers with aus operations achieve better profits 2

[TheHunter]

Goldman still purchasing strongly. Tempted for a top up myself.

[TheHunter]

Bit confused by National Australia Bank Ltd's holding movements, upped holding on the 5th of June by 1% then decreased by 1% today... any ideas?

On a postive note, this El Nino weather is doing wonders for the amount of puffer jackets out and about.

[winner69]

Bit confused by National Australia Bank Ltd's holding movements, upped holding on the 5th of June by 1% then decreased by 1% today... any ideas?

On a postive note, this El Nino weather is doing wonders for the amount of puffer jackets out and about.

I think they have been involved in a bit of shorting activity judging from the transaction shown in the notice.

Maybe more of an expert on such things can enlighten us further

[couta1]

The drop in the kiwi dollar should help here as most sales come from Aussie, that and the masses of snow the Southern skifields have received will see those Aussies scrambling to buy new gear before arriving here on mass come July.

[TheHunter]

Agreed Couta - translation will be an upside, the impact on margins due to the cost of imported product will be the downside tho.

The heavy winter is looking promising.

[Food4Thought]

Sales here will be relatively warm.... considering it isn't that warm in Australia either at the moment. The Australians love NZ for the snow season. Sales will really pick up. Sounds way too cold in NZ at the moment. Wishing for some sunshine over that side for all.

[TheHunter]

What's the vibe like in KMD stores across the ditch Food4Thought?

[Food4Thought]

I would say, reasonably warm... stable, probably a slight peak as the winter isn't really that good. Worse than last year for certain, and worse to come this week.

[couta1]

Massive off market trade just went through at $1.80 ?????

[TheHunter]

30mil shares traded off market @ $1.80.. shame it wasn't on market

[sb9]

Briscoes on board...interesting development.

[couta1]

Briscoes on board...interesting development.
Looks like this stock is going to defy the current downtrend, yeah. Another lesson in being patient and not selling out for a substantial loss.

[Harvey Specter]

Looks like this stock is going to defy the current downtrend, yeah. Another lesson in being patient and not selling out for a substantial loss.Takeover offer by Briscos pending. (per Herald)

[Scooter]

Take over at $1.80

[TheHunter]

Congrats to all who got in within the $1.30's :t_up:

[Regi]

Damn, I was so close to buying this the other day. Congrats all.

[TheHunter]

Still undervalued IMO and has a lot of price recovery to go, especially with Briscoes on board.

[longy]

Congrats to all who got in within the $1.30's :t_up:

I think it was luck for me than chart reading. Any how...I did not buy at 1.3 but bought some at 1.4 last week. I have no idea that this was coming but was purely based on lines on the chart that said I should buy some. Well it pays off this time around. Happy.

[TheHunter]

Charts will never tell you these things. I bought on on the basis of the half year 'loss' being extremely overplayed IMO and the stock being well undervalued.... & it still is I think.

Regarding the notice, what does the offer of cash & scrip to all holders mean exactly?

[JayRiggs]

Lets not forget Mr Xavier Simonet! He's starting work today :)

[hey_homes]

"The group said it intended to lodge a takeover bid for the remaining 80.1 per cent of Kathmandu immediately."

What does a "takeover bid" mean exactly? As a holder will I be presented with an offer of some sort?

[JayRiggs]

"The group said it intended to lodge a takeover bid for the remaining 80.1 per cent of Kathmandu immediately."

What does a "takeover bid" mean exactly? As a holder will I be presented with an offer of some sort?

Well I hope if they do make an offer, it'll be more than $1.80.
I bought over $2, so I don't wanna sell for a loss.

[couta1]

Well I hope if they do make an offer, it'll be more than $1.80.
I bought over $2, so I don't wanna sell for a loss.
In the same boat at $2.80 buy in.

[TheHunter]

More than happy to sell my shares to Mr Duke for $2.80.

[TheHunter]

"The group said it intended to lodge a takeover bid for the remaining 80.1 per cent of Kathmandu immediately."

What does a "takeover bid" mean exactly? As a holder will I be presented with an offer of some sort?

Notice says shares and scrip... so cash and shares in the new group. As for price/quantity of this offer, will have to wait and see.

Surprised people are selling for under $1.80, given the immediate lodge for a take over and 20% purchase @ $1.80 - surely the offer will be at a higher price than that.

[Harvey Specter]

Notice says shares and scrip... so cash and shares in the new group. As for price/quantity of this offer, will have to wait and see.

Surprised people are selling for under $1.80, given the immediate lodge for a take over and 20% purchase @ $1.80 - surely the offer will be at a higher price than that.They bought of instos at $1.80 didn't they? My guess is there would be a ratchet clause in there if they increase the offer price above that so I would expect the offer to be at $1.80 - at least initially.

If you want to 'hold on' to your shares, why not accept the share offer and have a shareholding in a 'potentially' much better company.

Will be interesting to see what happens.

[winner69]

Lets not forget Mr Xavier Simonet! He's starting work today :)

I'm sure he will enjoy working with Rod

Better than grumpy shareholders as the boss

[Arbroath]

No contact with the Kathmandu board so I'd assume this is not a friendly approach and the KMD board are very unlikely to recommend acceptance of anything sub $2 a share. I'm surprised at all the sellers also. Imagine the Instos that sold overnight to BGR at $1.80 will have a clause that they get topped up if the final price is say $2.10 a share etc although they have been paid 100% cash and the offer is a cash and scrip offer so possibly not.





Surprised people are selling for under $1.80, given the immediate lodge for a take over and 20% purchase @ $1.80 - surely the offer will be at a higher price than that.[/QUOTE]

[Beagle]

I'm not surprised that people are selling for under $1.80. Fact is the offer will be several months away from settlement and will clearly involve part scrip.
The board of KMD will have to commission an independent valuation which will take quite some time and KMD's prospects are very difficult to gauge given their woeful recent profit performance and hopeless stock turn.
KMD board can claim anything they like that the company is worth more but is it really ? Recent SP weakness suggests otherwise.
The board only have themselves and management to blame for the inept way this company has been run. I'd be running for the hills with my $1.75 cash and count myself extremely fortunate to have sold a pup for a good price and be shopping for a real bargain later this week if I had shares in KMD. Nearly everything on the NZX is currently on sale but KMD shares are currently selling for a very fulsome price IMHO.

[Arbroath]

Fair points Roger but I'd happily bet you a steak lunch this takeover does not succeed at $1.80. KMD is in play now and this bid is quite opportunistic. No contact made with KMD board so its hostile. The question is what do the large insto holders think is fair value and my guess is $2-2.20 range.

But the whole thing could take the rest of the year to play out and like you say you can take $1.75 and buy some other beaten down stocks at the moment...



I'm not surprised that people are selling for under $1.80. Fact is the offer will be several months away from settlement and will clearly involve part scrip.
The board of KMD will have to commission an independent valuation which will take quite some time and KMD's prospects are very difficult to gauge given their woeful recent profit performance and hopeless stock turn.
KMD board can claim anything they like that the company is worth more but is it really ? Recent SP weakness suggests otherwise.
The board only have themselves and management to blame for the inept way this company has been run. I'd be running for the hills with my $1.75 cash and count myself extremely fortunate to have sold a pup for a good price and be shopping for a real bargain later this week if I had shares in KMD. Nearly everything on the NZX is currently on sale but KMD shares are currently selling for a very fulsome price IMHO.

[couta1]

Sorry Roger I won't be selling, I can be very patient:cool:

[workingdad]

I'm not surprised that people are selling for under $1.80. Fact is the offer will be several months away from settlement and will clearly involve part scrip.
The board of KMD will have to commission an independent valuation which will take quite some time and KMD's prospects are very difficult to gauge given their woeful recent profit performance and hopeless stock turn.
KMD board can claim anything they like that the company is worth more but is it really ? Recent SP weakness suggests otherwise.
The board only have themselves and management to blame for the inept way this company has been run. I'd be running for the hills with my $1.75 cash and count myself extremely fortunate to have sold a pup for a good price and be shopping for a real bargain later this week if I had shares in KMD. Nearly everything on the NZX is currently on sale but KMD shares are currently selling for a very fulsome price IMHO.

I got rid of KMD and WHS a couple of months ago while the price was still up and still think it was a good call, even factoring in the Brisco's takeover bid retail IMHO is not something I want to have in the portfolio at the moment, theres too many economic indicators signaling less than robust times ahead for even strong contenders let alone KMD. Its a risk like a lot and I take them but not in this case.

[TheHunter]

I disagree Roger - this stock is worth well over $1.80.

Remember this floated at around $2.20 if my memory serves me correctly. Since then, numerous stores have been opened and significant expansion into new markets. IMO - the market has significantly overplayed one poor half year result. Now having Briscoes on board... 1.80 is a give away.

Im with Couta - happy to hold and to see what Mr Duke offers me.

[Baddarcy]

Possibly a noob question, but is KMD trading on the ASX suspended?

[JayRiggs]

Possibly a noob question, but is KMD trading on the ASX suspended?

Shares on the ASX start trading according to their letter in the alphabet.
So something like ANZ would start trading first at 12pm. KMD woulda started trading maybe 12:10pm?

[tim23]

Reckon will have to be north of $1.80 probably $2.20ish I reckon.

[TheHunter]

Very well played by Mr Duke, acquiring at a 30% premium to market shows how they perceive this stock to be well undervalued. Excellent strategic move.

I hope it's north of $2.20, plenty of value to be gained even at that price. Emphasis on 'hope' tho.

[Harvey Specter]

Will be interesting to see which instos sold. With NZSuper holding a huge amount, they could put him over 50% pretty much by themselves.

[Hawkeye]

I wonder what the ratio of cash to scrip would be?
Glad I purchased some a week ago

[bull....]

Will be interesting to see which instos sold. With NZSuper holding a huge amount, they could put him over 50% pretty much by themselves.

probably goldman sachs they were buying heaps at lower price

[bull....]

I wonder what the ratio of cash to scrip would be?
Glad I purchased some a week ago

probably weighted more scrip than cash then intos can roll loss making Kathmandu scrip into briscoes

[TheHunter]

probably weighted more scrip than cash then intos can roll loss making Kathmandu scrip into briscoes

I'll eat my hat if KMD makes a full year loss

[winner69]

I'll eat my hat if KMD makes a full year loss

I think bull was meaning many instos were sitting on losses with their KMD shares ...and this is one way to sort of 'lose' those losses

[TheHunter]

I think bull was meaning many instos were sitting on losses with their KMD shares ...and this is one way to sort of 'lose' those losses

Oh right, got ya!

But speaking of which... KMD hasn't posted any market update for a long time. Anyone have some earnings expectations?

[winner69]

Oh right, got ya!

But speaking of which... KMD hasn't posted any market update for a long time. Anyone have some earnings expectations?

Guarantee there will be a real positive announcement shortly after offer is made.

Will be along lines of a fantastic early start to winter, the sales have gone exceptionally well and we expect full year earnings to be about $25m to $30m

(I did the sums after h1 and got $10m to $15m but that was before the fantastic start to winter)

[winner69]

If $25m for fy16 that's 12.5 cents/share

PE of 15 gives $1.80

He a clever guy that Rod

I don't think he offer $2.20 hunter, you never know

[Hawkeye]

He''ll keep it at 1.80 but offer his higher priced shares in exchange. Not sure how he would go about it, maybe for every 10 KMD you have, he would pay out 6 at $1.80 and fork over 3 briscoes shares?

[pennyacw]

In theory BGR should be offering slightly more than what they have offered instiutional investors, as large holdings are less liquid and therefore harder to sell out of positions. However, I would expect there to be some politics at play going forward and thus a higher price will only be achieved through share offerings.

One thing to keep in mind is allot of the current share price valuations will not take into account of the recent price increase. Target prices are likely to have taken the amount the share price needs to increase in allot of valuations 'around town'.

[TheHunter]

Really keen to hear some sort of response/update/comment from KMD

[Jay]

Really keen to hear some sort of response/update/comment from KMD
If they have not received an official offer, what have they got to comment about??

[JayRiggs]

Alrighty guys, we have a bit of action going on.

BGR Lodges Takeover Notice for all of the shares in KMD

2:53pm, 1 Jul 2015 | TAKEOVER

Briscoe Group Lodges Takeover Notice for all of the shares in Kathmandu Holdings Limited
1 July 2015: Briscoe Group Limited (Briscoe Group) announced today a takeover offer to acquire all of the ordinary shares it does not already own in Kathmandu Holdings Limited (Kathmandu). As disclosed yesterday, Briscoe Group currently holds relevant interests in 19.9% of Kathmandu Shares.
The Offer is for 5 Briscoe Group shares for each 9 Kathmandu shares plus a cash amount of NZ$0.20 per Kathmandu Share (the “Offer”). Based on the Briscoe Group one month VWAP of NZ$2.88 on 29 June 2015, this equates to an Offer price of NZ$1.80 (approximately A$1.58) per Kathmandu share.
An attractive Offer
An Offer equating to NZ$1.80 per share represents:
• a 34% premium to the one month VWAP for Kathmandu up to and including 29 June 2015; and
• a FY15 P/E multiple of 15.5x and a FY15 EV/EBIT multiple of 11.0x based on broker consensus estimates of Kathmandu’s FY15 earnings .
Briscoe Group Managing Director and majority shareholder Rod Duke said the proposed Offer represents a substantial premium and an attractive valuation multiple for the shares of Kathmandu.
“The Offer is an opportunity for Kathmandu shareholders to receive a premium for their shares in Kathmandu and to share in the benefits that would arise from being a shareholder in a larger and more diversified retail group.”
The acquisition of Kathmandu would create an Australasian retailing group that generates annual sales of over NZ$900 million and a group with wide product diversity and earnings potential that would be beneficial to shareholders, employees and customers.
Rod Duke said, “We see this as a great opportunity for both companies and their respective shareholders. Our intention is to bring the best practices from each organisation and leverage the scale of the combined group to grow earnings for the benefit of all shareholders. A larger company would also have a superior sharemarket presence, and should see more trading liquidity.
“Importantly, the combined group would have a broader and more diverse product offering that would be able to naturally compensate for seasonal trading patterns.”
Briscoe Group Chairman Dame Rosanne Meo said, “Briscoe Group has a long track record of success in retailing. In the last five years Briscoe Group has delivered strong returns to shareholders, growing earnings in every year. The key to its success has been the management team led by Rod Duke. They have established Briscoe Group as a leading retailer with 80 stores across New Zealand within the homeware and sporting goods retailing sectors, and a market value of approximately NZ$600 million.
“We are confident a combined Kathmandu and Briscoe Group would benefit from Rod and his management team’s retailing expertise and strong track record.”
Briscoe Group has delivered a total shareholder return of 234 percent since November 2009, which compares to 81 percent for the broader New Zealand market and Kathmandu’s negative 19 percent over the same period (since it listed on the NZSX and ASX).
Impact on Briscoe Group
Briscoe Group is seeking to acquire the 80.1 percent of the ordinary share capital of Kathmandu it does not own through the issue of 89.7 million Briscoe Group shares and payment of NZ$32.3 million in cash. This would reduce major shareholder Rod Duke’s interest in the combined group to 55.1%. The purchase of Briscoe Group’s existing 19.9% of Kathmandu’s shares was funded by a combination of available cash and a new bank facility. Measured at January 2015, the proforma net debt for the Combined Group is NZ$96.8 million , compared to Briscoe Group’s net cash balance at that time of NZ$89.7 million. On a proforma basis to January 2015, the Offer is accretive to Briscoe Group’s earnings per share. If the acquisition is completed Briscoe Group intends to apply for a listing on the ASX .



https://www.nzx.com/companies/BGR/announcements/266472

[Harvey Specter]

Alrighty guys, we have a bit of action going on.


https://www.nzx.com/companies/BGR/announcements/266472As expected - not sure why some of you were expecting an offer over $1.80. Mostly in shares so you still benefit from growth going forward.

My guess is the instos (that haven't sold yet) will back it so it will get over the line. Per 2014 accounts, 41 holders owned 92%

[drcjp]

Not enough Mr Duke
Make it 7/9 25c p/s and we might have a cup of tea together
He's a smooth operator but can't expect to have it accepted prior to FY results

but then maybe he can?

[winner69]

$440m (including existing debt) odd seems an awful lot to pay for Kathmandu. Hope Rod hasn't lost his marbles.

Pretty hefty EV:EBIT multiple ....think you guys are lucky. Well done anyway

Keep an eye on that BGR share price.

[winner69]

And don't forget the earnings upgrade to come sometime soon from KMD

Lose Monet H1 and make $30m in H2 is some effort

That'll make the company worth 3 bucks plus

[Harvey Specter]

Pretty hefty EV:EBIT multiple ....think you guys are lucky. Well done anywayYip - 11 x EBIT is high

[babymonster]

not much... i would thought most instos are holding above $2...

[longy]

So based on the current SP of BGR it would comes to $1.78 for every KMD share. Please correct me if it is incorrect.

[winner69]

So based on the current SP of BGR it would comes to $1.78 for every KMD share. Please correct me if it is incorrect.

Sounds about right

It'll go up and down over the next few weeks /months .....so keep watching that Briscoes share price.

You want Briscoes shares anyway?

[longy]

Sounds about right

It'll go up and down over the next few weeks /months .....so keep watching that Briscoes share price.

You want Briscoes shares anyway?

Yes.. I do. I remembered when Briscoes first listed.. I did not think much of it... then saw it went up over the years....hum here is another chance. Thanks.

[Harvey Specter]

not much... i would thought most instos are holding above $2...Instos value daily so they were holding at $1.30.

[winner69]

Yes.. I do. I remembered when Briscoes first listed.. I did not think much of it... then saw it went up over the years....hum here is another chance. Thanks.

So you be quite excited about this ten.

Wouldn't want Briscoes to pay too much then would we

[Yoda]

Yes.. I do. I remembered when Briscoes first listed.. I did not think much of it... then saw it went up over the years....hum here is another chance. Thanks.
Not all roses for briscoes though, was it. From what i can make out on the basic charts, they listed at about 1.50, in 2002 and it took 13 years to make 100% . Was nearer .50c down from near 2.70 ish in 2009, but has been below or near 200MA RECENTLY. Oh to have bought in 2009 :ohmy:
Will this give some impetus for an up turn?
If Briscoes shares rise what does that mean for us? A basic question, sorry

[winner69]

Not all roses for briscoes though, was it. From what i can make out on the basic charts, they listed at about 1.50, in 2002 and it took 13 years to make 100% . Was nearer .50c down from near 2.70 ish in 2009, but has been below or near 200MA RECENTLY. Oh to have bought in 2009 :ohmy:
Will this give some impetus for an up turn?
If Briscoes shares rise what does that mean for us? A basic question, sorry

If it all works out you still get 5 BRG for 9 of your KMD shares.... so in theory BGR goes up you get more than $1.80 worth of goodies

[tim23]

BGR down 10c today thought holders might have viewed the deal better, early days yet, another bidder may emerge.