The Reject Shop (TRS) - almost hit $15

[OneUp]

One other thing:

FY07 NPAT forecast $10.7-10.9m. TRS has a tendency to shatter its own forecasts, so I'll call it $12.0m. Which puts TRS at a forward PE of 15.0. A lot better value than a number of other growth companies out there. Could justify a PE of 25. $10 within a year, I reckon.

[OneUp]

Just bought back the TRS I sold a few weeks ago + 10% cost [B)]. Are you back in, Tommy?

I think Lynch mentioned he often regretted selling superior companies, even if they got a little overvalued, because they just kept on keeping on.

[tommy]

Hi oneup,

Yup, but only bought back 10k this morning because timing-wise, buying
after a good announcement is a normally against my rules... and all my TRS funds had gone into EMI[:I]
Will build up my TRS holdings in the event of any violatility though. $6.50 would be a nice bargain...

In the meantime, here is a TRS-related article:

http://www.theage.com.au/news/busine...407883414.html

Retailers flout warning of consumer caution

Rebecca Urban
August 17, 2006

IF RETAIL bosses are feeling jittery about the outlook for consumer spending, they are not showing it. Yet.

Fresh from reporting solid annual profits, The Reject Shop, JB Hi-Fi and clothing store Noni-B have braved speculation that shoppers will tighten their purse strings in response to the rising cost of living, by tipping favourable pre-Christmas trading conditions and continued earnings growth.

All three companies claim to be well positioned to overcome any negative impact that rising fuel prices or further interest rate rises might have on business.

The Reject Shop, a discount variety outlet, yesterday forecast its profit would rise by as much as 20 per cent next year.

The bullish sentiments have echoed those of top-end department store David Jones, which this week reported a big jump in sales, and forecast earnings to grow between 5 per cent and 10 per cent in each of the 2007 and 2008 financial years.

Commentary on the outlook for consumer spending will be expected from Coles Myer chief John Fletcher today, when the nation's largest department store reports its annual results.

The group recently confirmed it was on track for a $785 million profit. Its shares have rallied more than 5 per cent to $11.70 this week.

The Reject Shop's share price jumped 7 per cent to a record high of $7 yesterday, after the company announced a special dividend of 7.5¢a share in addition to its final dividend of 10¢ a share, to be paid to shareholders on September 1.

The increased payout follows a 38 per cent jump in profit to $9.1 million for the financial year.

Managing director Barry Saunders said discount retailers were protected but not immune from economic influences, and it was possible that any weakening consumer sentiment could broaden the store's clientele.

"Market research is showing that it's the well-off as well as the less well-off that are supporting our stores," he said. "We've said for some time that it's those who need and want to save money who come to us. And that's a broad spectrum of society."

The Reject Shop has forecast earnings to rise this year to as much as $10.9 million.

Sales of large-screen plasma televisions helped push JB Hi-Fi's full-year profit to a record $25.8 million. However, the result was slightly lower than the market's forecast and the shares slipped 11¢ to $4.68.

Chief executive Richard Uechtritz said he was confident the company could continue to increase its earnings, in spite of the challenging conditions.

"It's not good to hear stories about the possibility of interest rate rises so close to Christmas, but there's other factors such as the tax cuts to consider," he said. "If people are holding back on their spending now, hopefully by Christmas they will have the dollars in their pockets."

Mr Uechtritz expects CDs, DVDs, portable music players and computer games to drive pre-Christmas sales.

Women's fashion house Noni-B reported its fifth consecutive year of earnings growth, up 24 per cent to $8.2 million. However, it offered limited guidance for this financial year and shares closed 7¢ lower at $3.85.


_____________
http://www.theage.com.au/news/busine...407883423.html


Confidence plunges as petrol and interest hit consumers

Leon Gettler
August 17, 2006
Latest related coverage

THE gap between consumer confidence and spending has widened, with a leading index showing consumer sentiment plunging a

[tommy]

http://www.news.com.au/perthnow/stor...35-951,00.html

Bonanza year for Reject shop

By AAP reporter

August 16, 2006 05:00pm
Article from: NEWS.com.au

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DISCOUNT store The Reject Shop defied interest rate hikes and fuel prices to post a 39 per cent increase in annual net profit today.
Investors liked the result and pushed The Reject Shop shares to record levels.

Underlining the strong 2005/06, The Reject Shop for the first time recorded a profit for the second half - of $400,000 - in what has traditionally been a quiet period for the retailer.

The discount chain store, with 114 stores throughout Australia, including WA, recorded a 38.7 per cent lift in net profit to $9.1 million for the year.

Sales grew 16.8 per cent to $237.2 million for the 12 months to June 25, 2006.

Managing director Barry Saunders said he expects net profit for the current financial year to rise to between $10.7 million and $10.9 million.

He said that while The Reject Shop was not immune to changing economic conditions, when times were tough people headed into his shops looking for bargains on "everyday need'' products such as toiletry goods, batteries and snack foods.

He said the latest market research showed it was the well-off, along with the less well-off, who were shopping at The Reject Shop.

The Melbourne-based company plans to open 15 new stores this year after opening 14 stores last year, including its first outlet in WA.

Shares closed 36 cents higher at $7.

[robbo]

The Reject Shop (TRS)

Continue to love this company (TRS) and suuport this great organization..

Well Done all TRS holders. []

Kindest Regards,

Robbo

[steve fleming]

quote:Originally posted by davidrob

The Reject Shop (TRS)

Continue to love this company (TRS) and suuport this great organization..

Well Done all TRS holders. []

Kindest Regards,

Robbo

Hi Robbo totally agree...and congratulations Oneup - TRS has proved to be an outstanding investment...can't see any reason why it won't continue to head towards $10

TRS seems to have developed a reputation and brand that makes it the automatic choice to go to at that end of the market.

Everytime i go past a TRS store i think of Oneup's analysis and how i should have got into TRS when he first started the thread!

[OneUp]

quote:Originally posted by steve fleming
Everytime i go past a TRS store i think of Oneup's analysis and how i should have got into TRS when he first started the thread!

Cheers Steve. I feel the same way about SSI, but about x10. Going to China tomorrow so will have a look out for SSI gaming products and their general popularity.

[steve fleming]

quote:Originally posted by OneUp

quote:Originally posted by steve fleming
Everytime i go past a TRS store i think of Oneup's analysis and how i should have got into TRS when he first started the thread!

Cheers Steve. I feel the same way about SSI, but about x10. Going to China tomorrow so will have a look out for SSI gaming products and their general popularity.

Enjoy your time in China, Oneup. Look forward to hearing if you can spot any SSI products in your travels!

[OneUp]

Hi Steve,
China is a weird and wonderful land. Ok, leave out the wonderful part.

Although casinos are officially banned in China (the Government appears very concerned at the potential harmful affects of gambling on the people, on social stability, and hence the CCP's grip on power), gambling in homes and even on the street is very common (I saw street gambling myself. Apparently the reason they did this was to save on power costs.) Gambling with family and friends is tolerated by the government because (a) it is thought to have relatively little egative social consequences and (b) it would be nearly impossible to prevent even if the CCP disapproved.

In my 4 weeks in China, I came across only one electronic gaming parlour (in Nanjing, 4 hours by train from Shanghai), not sure if it was affiliated with SSI. Anyway, it was about 30% full at 7pm in the evening.

I took the opportunity to ask some locals whether the concept of electronic gaming would take off. The reply was that it would depend on the odds and the prizes; because they could already gamble low amounts with friends or in cafes. One drawback of electronic gaming is that you don't get the social interaction associated with the current Chinese way of gambling. Another comment from a Chinese businessman I met was that if too many negative social effects were encountered, the CCP would not hesitate to jump in (the CCP wqould also want quite a large share of any profits if the gaming companies were allowed to continue operating).

[OneUp]

Oh yeah, I see TRS up another 10% in the last month. Easily covered the cost of my holiday!