The Reject Shop (TRS) - almost hit $15

[OneUp]

If TRS can manage 18% growth for 15 years that's NPAT of $109m.

At a PE of 15 that's $1.6 billion.

Versus current market cap of $200m.

[robbo]

The Reject Shop (TRS)

INterstnbgly--David Jones has increased share price by 44% and Woolies (WOW)--by 29 % this last 12 months...

From my own observational and investmetn experience; watchng the 'space' of small Industrial-- Caps ---going to small-mid caps and then on then mid caps --ie your Mortage Choice's, Mc Millan Shakespare's, Boom Logistics, Oaktons, Clive Peters, Rebel Sports, RCR Tomlinson, Emitch,Billabong, Miller Retail, JB Hi Fi, Seek, IWL, Jet Set, Photon, Just Jeans (JST) --agree it gets harder past $1 Billion Market Cap -- to keep doing the "better than 30% annual increase mark consistently "-- --although all these listed above have done that --and many significant north of 50% increase ....

From the TRS point of view, maybe also ..... the current 'shake out' at Coles-Myer---(CML) might have some future bearing.... [?][?]

Regards,

Robbo

[robbo]

The Reject Shop (TRS)

Annual Report and Chairman/CEO (TRS) Report now just out (from last night )-- ....

There is an awful Lot.... yep a whole lot imo.... to really like here, from an organizational S.C.A. 'intrinsic (TRS) value perspective'--

It is, imo,almost: 'Excellent Case Study' stuff-- in my view.[^]

Think the market will also like it too..[?].... Especially, 'when' they have digested it....

Did also Particularly agree with and admired the following highlighted points: from the, (TRS's) M.D. 's address.:

So below is my edited and highlighted: 'Readers Digest Version'

The Reject Shop Limited ABN 33 006 122 676

245 Racecourse Rd, Kensington, Victoria, Australia 3031


MANAGING DIRECTOR’S ADDRESS TO 2006 ANNUAL GENERAL MEETING
- 11 OCTOBER 2006

The Reject Shop has a talented, experienced and committed team, whose dedication and energy are responsible for the results you see today. It has been a very demanding year for all The Reject Shop team members, and I thank each of you for your continued hard work and enthusiasm. It gives me great confidence in the future, and in what more can be done.


FY06 results


Firstly, for the benefit of our shareholders, I would like briefly to review the financial year just past, and in particular, touch on:


Results for the year to June 2006, which included our maiden 2nd half profit.


Some of the main operational initiatives we have put in place this year to build the business.

Key factors in FY06 result.


Overall, it was an extremely strong year for The Reject Shop, both from a trading and a profit point of view.

**** The results demonstrate The Reject Shop’s business model is.... a strong and resilient one, .....capable of performing well even against a background of rising petrol prices and interest rate concerns.


To recap the Headline Numbers:

• Sales growth was up 16.8% to $237.2 million

• Net profit after tax was up 38.7% to $9.1 million

• Comparable store sales growth of 7.7% -- (with 9.8% in the second half)..


This continued the strong sales and profit trend of the past few years. More than anything, the FY06 results reflect the dedicated efforts of all The Reject Shop’s 2500 strong team to continue to lift performance across all areas of the business.

The result was achieved on:

#; Strong sales in basic and traffic building ranges

#; Improved performances in the main seasonal events – Christmas, Easter, Mothers Day (and Fathers Day)

#; Continued rollout of new stores, with 14 new stores opened

; The Board’s decision last year to invest in an expanded merchandise team, and the information systems to support them.

( I personally, Really did like and approve of this above importatnt strategy and point !). [^]

#; Improvements in stock replenishment and customer communications, enhancing the in-store experience for our customers.


At year end, we were in the fortunate position of having a robust balance sheet, minimal debt, and a clean inventory.

This provides confidence that we can continue to reward our
shareholders and at the same time continue to develop a strong foundation for The Reject Shop’s future growth.


Operational achievements

Our focus has been and remains on continuous improvement in all areas, and we made further excellent progress in this regard during the year.

Merchandise

#; A

[contrarianinvestor]

quote: There is an awful Lot.... yep a whole lot imo.... to really like here

This is scary. The share price usually peaks when optimism (especially in public discussion forums) peaks. . . . Um perhaps not, because I'm less optimistic and I'm posting here too!

[robbo]

Reject Shop (TRS)

Agree CI -- It is good to "keep it real"-- ....

What in the TRS Annual Report -- did you personally find you did not like ?

Did you personally think that based on the factual evidence-- the TRS management's --forecast earnings figures were too optimistic ?[?]

Kind Regards,

Robbo

[Bobbyvee]

Latest analysis from Intersuisse:

The company is trading at a FY07 PE, EBIT and EBITDA
ratio of 18.7, 12.5 and 9.7 times earnings. This is relatively
high for a retail company.
However due to the expectation of continual store expansion,
the estimated FY08 PE, EBIT and EBITDA ratios are
calculated at 16.0, 10.7 and 8.3 times respectively.
We previously reported TRS as an accumulate for long term
growth and we retain this view.

[contrarianinvestor]

quote:Originally posted by davidrob

Reject Shop (TRS)
What in the TRS Annual Report -- did you personally find you did not like ?

I don't like the 'sales talk' tone of the report - big bold letters highlighting only the good stuff. If they can print 38.7% NPAT increase in 36pt bold then they should print excessive MD compensation of $984,475 in bold too. Also, the 38.7% figure can be misleading because it does not take share dilution into account. The real EPS increase for us shareholders was 34.5%, not 38.7% as they would like us to believe. Sneaky reporting such as this makes me question management's integrity.

quote:
Did you personally think that based on the factual evidence-- the TRS management's --forecast earnings figures were too optimistic

forecast earnings figures looks reasonable. I don't think the share price contains any margin of safety anymore - A slight profit glitch may severely hurt the share price.

[winner69]

Will it hit 900 today????

Still heading north

Whilst in Melbourne earlier this month went into 2 Reject Shops .... chocker block they were with good queues at the checkout.

Did remind me a bit of the WHS in its early days but even so the results count don't they

JB Hi Fi shops were also flat out .... one shop assistant said could get enough of the Wiii thingies.

Looking good for both .... and they say that retail is still not the place to be .... so watch out when things DO turn around

[winner69]

Closed at 910

This time last year was 422 ... so more than doubled

Hit 500 in Feb
Hit 600 in June
Hit 700 in August
Nit 800 in September
Hit 900 today

Makes you wonder what would happen if they made a real good announcement in the New Year

[winner69]

quote:Originally posted by winner69

Closed at 910

This time last year was 422 ... so more than doubled

Hit 500 in Feb
Hit 600 in June
Hit 700 in August
Nit 800 in September
Hit 900 today

Makes you wonder what would happen if they made a real good announcement in the New Year

At this rate might even hit 1000 before years end

Not exceptional volumes but somebody very very keen on buying what is available