WHS slowly slip sliding away $2.42 now !
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WHS slowly slip sliding away $2.42 now !
What's the all time low?
bounced of it in mid 2015 too just too confirm the level = agree looks bad on the chart - I think in mid 2015 I was saying it was stuffed too and the normans buying was the only thing holding it up .
Strategy? WHS has been re-positioning since 2006 when Ian Maurice was CEO. Remember Warehouse Extra? Warehouse Cellars? Warehouse Pharmacy?
He and subsequent CEOs had the luxury of a very strong balance sheet (with company owned freehold stores and land as backup assets) and still high levels of cash flow to pursue all those 'failed' re-positioning and restructuring.
Nick Grayston does not now have the benefit of a very strong balance sheet or very strong cash flow to have the same flexibility - the need to raise equity in 2014 is testimony to the lack of balance sheet strength.
The recent announcement of a change in operating model is really only about staff cuts imo. When a company embarks upon staff cuts to effect cost savings, usually means it is bloated in the first place or it is running out of ideas. As Roger has pointed out, Warehouse stores have hardly enough staff as it is! Contrast with K-mart where there are staff everywhere to tidy up, re stack shelves and to answer customers' queries.
PS. reminder to not to invest into a downtrend.
Best comparison may be Briscoe?
Take out the $60m cash and BGR is trading on a historical PER of 15.7 times.
WHS compared to BGR should be trading on a discount of at least 25% to reflect i) earnings downtrend vs BGR's uptrend & ii) weak balance sheet vs BGR's cashed up overcapitalized financial position.
So WHS should trade on a PER of 11.8 times on EPS of say, 15.5c = sp of $1.83.
Your $2.00 is in the same ball park direction of what WHS is now worth! Scary!
I thinking this maybe the last 10c div unless they can grow profit and margins or it could be 10c for the yr guess the well cemented trend is falling profits and falling dividends.
Im sure some people will try and catch falling knife for the div - not a sure fire way to wealth unless you get the shares real cheap today but what is real cheap? or a bargain
Hey Balance, you mentioned Warehouse Pharmacy of days gone by
Whether Nick actually said this or not I can't tell but they seem to be back on the agenda -
Chief executive Nick Grayston said e-commerce only makes up about 10 percent of the New Zealand market, much lower than in other developed countries. But Warehouse has to prepare for increased disruption and part of the response is to move away from a "transactional relationship" with customers where price is the only determinant, to "an engagement model" which could include walk-in health clinics, a return to pharmacies, financial advice and mobile services.
http://www.sharechat.co.nz/article/5...-services.html