Woolworths hardware venture - which suppliers will be acquired?

[winner69]

Pick the right targets and big bucks to be made here

Woolwaorths joint venture with Lowes to set up big box hardware stores in opposition to Bunnings will result in hundreds of millions of stock going into them ... with ongoing sales

However some commentators are saying that this could reault in a flurry of corporate activity. Rumours are around that US, Asian and European suppliers, esp those who already supply Lowes, are looking at opportunities in Australia. Lowes are leading the way from alla ccounts

Action is already under way with Valspar wanting WYL with an ititial offer at a 50% premium to the previaling shareprice. I doubt whether that will be the last we hear of this bid ... at least $2 is the asking price

GUD who have Sundeam appliances and a range of cleaning products is another one touted as a target. They themselves are involved in taking over Dexion.

GWT (GWA Ltd)is another likley target. Already a major supplier of bathroom fittings and water heaters to hardware stores they would be a great prospect for a similar US outfit to acquire

Wattyl already on the block insofar as paint goes suggests that ORI's Dulux division will be targeted. Dulux in throes of a demerger from ORI and outfits like PPG and Akzo have already been touted as acquirers. To an acquirer selling off the Selleys and Yates brands could be profitable as well and probably a few around who wouldn't mind those brands.

WYL shareprice was way down and some have already profited hansomely and may get more. GWA and GUD are prob still dirt cheap to a keen acquirer who wants to get into the Australian hardware game as it undergoes significant changes. Dulux when it lists weparately may already have a bit of premium in the price but would be a valuable asset for an overseas paint company to take over

Probably a few more around but this major event will see a lot of activity .... pick the right ones that taken over and money to be made

[ENP]

I'm very very keen on purchasing Woolworths sometime this year or the next. I'm just trying to figure out how to buy low...

[Lizard]

Maybe OLH is worth another look. Been in a downtrend practically forever... if they haven't gone broke by now.

[winner69]

Good one Lizard .... yep surprising they aren't broke seeing all the profit warnings the last few years but 93 year old companies just dont die

Plenty of paint brushes to go into all these new big boxes .... and Lowes just might talk their brush supplier in the US to take out a minnow in Australia with the petty cash and get a foothold in this part of the world

Good brushes they make but my DIY is such that a a $3 one from Bunnings you use once and if you forget to clean it up properly it soesn't matter .... was impressed with the last $3 4 inch brush i got from them .... might have been a cheap chinese import but 3 coats of decking oil on the deck and not one bristle fell out .... trouble is the oil was solvent based and I had no turps to wash it out and it is bit of a solid mass now

[Lizard]

At $3, it's probably not worth the turps!

My favourite paintbrush should probably be carbon-dated. Hand-made and handed-down. Might well be older than Oldfields.

[winner69]

Maybe OLH is worth another look. Been in a downtrend practically forever... if they haven't gone broke by now.

OLH in trading halt .... big forward orders for 2011 (as well as more writeoffs)

You may have been on to it with OLH Lizard

Getting supply contracts to to the Woolworths hardware expansion will make many a company .... like in OLH case zillions of paint brushes and things to go on the shelves

So keep looking at opportunities here .... not everything will come from China

[percy]

So keep looking at opportunities here .... not everything will come from China[/QUOTE]
You are right winner69,I am sure WOW have their buyers looking to Vietnam,Indonesia,India,and Taiwan to fill any gaps China can not fill.

[Lizard]

OLH in trading halt .... big forward orders for 2011 (as well as more writeoffs)

You may have been on to it with OLH Lizard


Might have been - additional $3-$9m in revenue from new supply agreements with large Retailers (2011 and beyond).

For a company with market cap of $2.8m and about $31m pa in revenue, it looks interesting. Might still need some more cash getting there though.

[winner69]

Valspar increase offer for Wattyl WYL to $1.67 (from $1.30) ..... more than double the price of a few months ago .... yippee

This all tied up witht he new Woolworths expansion no doubt ..... they need suppliers and plenty of stock .... so must be other opportunities out there

WYL at $1.67 is still a steal but disgruntled punters might be happy .... but Hunter Hall might hold out for more

[Lizard]

Another minnow for you in the hardware sector... MBD (Marbletrends)... you could probably buy it with your spare change, Winner. Market cap of $4.3m (at 7cps), forecasting NPBT of $1.69m... guess that's a P/E around 3.6. Paying a special div in October, to bring final div to at least 0.5cps, following on from 0.5cps paid in January.

You get about $3.7m of net debt with that, for EV/EBIT 3.9.

Supposedly running a share buyback, but not particularly active. Chairman buying under creep provisions and a bit of a barrier to takeover.

There are a heap of these "dreadfully cheap" minnows in the market right now. Terrible habit of mine - must be on good behaviour and not buy every one I find. From experience, they can all go wrong so quickly - offsetting the spectacular few.

[Lizard]

I see MBD agm today says they can't keep up with the Bunnings orders/logistics and need a bigger warehouse.

Might write them up separate thread some time. Accounts for this one aren't terribly straight-forward as fully consolidate subsidiary in which they only have a 70% interest, but then balance sheet also records a liability for put option held by the minority holder for the remainder. The confusion between what figures they are referring to (i.e. Marbletrend Pty vs Marbletrend Group), makes it difficult to interpret the agm comments. However, if I read it correctly, they are running 11% of last year on sales and at 2.2x the EBIT margin, possibly with expectations of FY EBIT margin being over 3x last year.

Currently, historic P/E is in the region of 6 when normalised (at 8cps), but, depending what is read into the agm figures, forward P/E could be under 2.5 (i.e. Marbletrend Pty NPAT of $3-$4m, up from $1.22m in 2010). Paid 1cps in total divs last year too, so seems worth a small punt.

[percy]

Hi Lizard.Just loved the MD's presentation."Well positioned for growth in strategic market segments". Does this mean they hope to sell more toilets in the outback ?.

[Lizard]

Hi Lizard.Just loved the MD's presentation."Well positioned for growth in strategic market segments". Does this mean they hope to sell more toilets in the outback ?.

Yep, exactly. Outback has gone soft and everyone wants a flush... :D

[Lizard]

Haven't got around to writing up a thread for MBD yet, but someone has turned up to take an interest in the stock. Maybe an effort to get the share price up before they cut a deal to take out the 30% minority in Marbletrend Pty Ltd?

[h2so4]

Yes MBD getting re rated.

..........mental note........take more notice of Lizards posts in 2011.:)

[h2so4]

Haven't got around to writing up a thread for MBD yet, but someone has turned up to take an interest in the stock. Maybe an effort to get the share price up before they cut a deal to take out the 30% minority in Marbletrend Pty Ltd?

+50% gain and still no thread.

I guess 2011 is be bigger and bigger for you Liz.:)

[winner69]

Just been reading through all of Oldfeilds past announcements , its been a rather interesting read.

could be a gem in the rough at the right price for someone with a lot of patience.

AA

This from the SMH


OLD HABITS

The chairman of the loss-making paint roller and garden shed concern Oldfields Holdings seems happy to carry on with the theme set at last year's annual meeting.

''Last year my predecessor started his address by stating that the year to June 2010 had been a difficult one for Oldfields Holdings,'' Julie McLellan told yesterday's shareholder meeting.

''I am not going to break with that tradition,'' she said. Oldfields, which reported a $3 million loss last financial year, has seen its share price dip 94 per cent since the onset of the financial crisis.

On a positive note, she said: ''The outlook is not rosy but it is not bleak.''

[macduffy]

I'm surprised that she didn't also say

"Rapid progress will be slow."

:)

[winner69]

GWT (GWA Ltd)is another likley target. Already a major supplier of bathroom fittings and water heaters to hardware stores they would be a great prospect for a similar US outfit to acquire



Obviously GWA missed out on the bonanza of filling up big boxes or getting taken over

Seems like 400 employees weren't fully occupied and get to spend their redundancy money on xmas presents before looking for another job in an ever diminishing manufacturing sector