SCY Chart

[blackcap]

Some fun things in the interin report.

Roy has certainly upset the staff replacing loyal staff with his people.Now a them and us atmosphere.
.

Percy, could not find any of this in the interim report. Maybe you could elaborate? Because for me this is an important issue when investing.

[percy]

Percy, could not find any of this in the interim report. Maybe you could elaborate? Because for me this is an important issue when investing.

You will not find it anywhere,as it came from someone who is mates with a number of SCY staff.I would point out he is a substantial shareholder who is concerned.

[blackcap]

You will not find it anywhere,as it came from someone who is mates with a number of SCY staff.I would point out he is a substantial shareholder who is concerned.

Is he concerned enough to sell out? Good price to do so if he wants to.
Thanks Percy, such anecdotal insights are welcome and I do not ignore them. Will see how it plays out in the coming year. Interestingly enough though Sandon etc are interested in this company and Duncan Saville who is astute also took a stake a whole few years ago. I cannot complain since I purchased shareprice has gone up and consistent dividends. Yes retail is breaking even but its tough everywhere so if they can break even and thus support the finance company that is all that is really required for adequate return on capital.

[percy]

Is he concerned enough to sell out? Good price to do so if he wants to.
Thanks Percy, such anecdotal insights are welcome and I do not ignore them. Will see how it plays out in the coming year. Interestingly enough though Sandon etc are interested in this company and Duncan Saville who is astute also took a stake a whole few years ago. I cannot complain since I purchased shareprice has gone up and consistent dividends. Yes retail is breaking even but its tough everywhere so if they can break even and thus support the finance company that is all that is really required for adequate return on capital.

No he has been a holder for a good number of years,and just unhappy about "club Roy".
As you may remember I was a big holder of SCY a number of years ago.Today only hold a few.
However all these changes,ie selling Power Stores,Alectra and Colombo St property should have been done years ago.So it falls back to very bad decissions at board level.Years wasted in the wilderness.!
Yes I agree Duncan Saville is astute.
Value? The only value I can see is if SCY were to franchise the business,as per Harvey Norman.

[blackcap]

No he has been a holder for a good number of years,and just unhappy about "club Roy".
As you may remember I was a big holder of SCY a number of years ago.Today only hold a few.
However all these changes,ie selling Power Stores,Alectra and Colombo St property should have been done years ago.So it falls back to very bad decissions at board level.Years wasted in the wilderness.!
Yes I agree Duncan Saville is astute.
Value? The only value I can see is if SCY were to franchise the business,as per Harvey Norman.

Cheers Percy, yes I do remember and thanks for the PM conversation a while back. Cheers for getting back with my query. If "club Roy" is sowing seeds of discontent that is not a good thing. I will give them the benefit of the doubt for now.
Your reference to cash flow hedges got me doing some digging. Seems it is an accounting tool.....

http://www.accountingtools.com/cash-...dge-definition

[percy]

Soldiering on.
Tougher trading conditions.No surprises there .
$5.7mil to be returned to shareholders via a 3 in 20 shares buy back at 72cents is interesting.
So shareholders will own a bit bigger slice of the cake, and have some cash to enjoy,but still the cake does not look very appetizing to me.

[dubya]

I bought some shares in Smiths City a couple of years ago when I read two companies connected with Sir Ron Brierley in Australia (Mercantile Investments and Sandon Capital) were accumulating them. They publicly advised at the time that the two companies would work together with their respective holdings, and they have now each accumulated 19.8% of the stock, so companies connected to Ron Brierley now control 40% of the company. As I understand it, they can not buy any more without launching a takeover bid.

Since they started buying, the share price has gone from 50c to the mid 70’s, and now after the buying from Australia has dried up, the price has inched back to mid to low 60’s. All on low volume.

The dividend at the current price is about 7.80% gross. Audited NAB of about 90c.
The company recently announced a 3:20 share buyback @ 72c. An extra-ordinary shareholders meeting is scheduled for November where share holder approval will be sought for this. The buyback is from insurance proceeds and a property sale, so as advised by the company will be a capital distribution. After the buy back (which is 15% of the total shares) the shares will be cancelled.

The company has just had it’s 99th year celebration, which they have reported was their most successful sales promotion yet. The finance company side of their business (78,000 active accounts on their books) continues to tick along, so I guess there is a good synergy whereby they sell the item and finance it themselves, so thereby getting two ‘bites of the cherry’.
They have recently expanded into Auckland and Northland.

I’m not aware of any NZ institutions or Kiwisaver providers with any relevant holdings.

Are there any other shareholders on this forum, or anyone actually, with a view as to what they think might happen going forward. The Ron Brierley of old is a well known corporate raider, and doesn’t buy stakes in companies for altruistic reasons.

There has to be an exit strategy for Brierley and the two companies. I have nothing to back this up, and it’s a bit of crystal ball gazing and fortune telling, but with the share price having been driven up when they were buying, and now drifting back down quite a lot after they stopped - maybe they wait for it to get as low as possible, then launch a takeover? At say a 10% premium to the then current share price. Everyone will think that’s really good considering where the price was before the takeover offer.

What they do after that is anyone’s guess, but they will certainly be trying to extract the 20-40c difference between share price and NAB.

Ideas anyone??

[percy]

I bought some shares in Smiths City a couple of years ago when I read two companies connected with Sir Ron Brierley in Australia (Mercantile Investments and Sandon Capital) were accumulating them. They publicly advised at the time that the two companies would work together with their respective holdings, and they have now each accumulated 19.8% of the stock, so companies connected to Ron Brierley now control 40% of the company. As I understand it, they can not buy any more without launching a takeover bid.

Since they started buying, the share price has gone from 50c to the mid 70’s, and now after the buying from Australia has dried up, the price has inched back to mid to low 60’s. All on low volume.

The dividend at the current price is about 7.80% gross. Audited NAB of about 90c.
The company recently announced a 3:20 share buyback @ 72c. An extra-ordinary shareholders meeting is scheduled for November where share holder approval will be sought for this. The buyback is from insurance proceeds and a property sale, so as advised by the company will be a capital distribution. After the buy back (which is 15% of the total shares) the shares will be cancelled.

The company has just had it’s 99th year celebration, which they have reported was their most successful sales promotion yet. The finance company side of their business (78,000 active accounts on their books) continues to tick along, so I guess there is a good synergy whereby they sell the item and finance it themselves, so thereby getting two ‘bites of the cherry’.
They have recently expanded into Auckland and Northland.

I’m not aware of any NZ institutions or Kiwisaver providers with any relevant holdings.

Are there any other shareholders on this forum, or anyone actually, with a view as to what they think might happen going forward. The Ron Brierley of old is a well known corporate raider, and doesn’t buy stakes in companies for altruistic reasons.

There has to be an exit strategy for Brierley and the two companies. I have nothing to back this up, and it’s a bit of crystal ball gazing and fortune telling, but with the share price having been driven up when they were buying, and now drifting back down quite a lot after they stopped - maybe they wait for it to get as low as possible, then launch a takeover? At say a 10% premium to the then current share price. Everyone will think that’s really good considering where the price was before the takeover offer.

What they do after that is anyone’s guess, but they will certainly be trying to extract the 20-40c difference between share price and NAB.

Ideas anyone??

Brierley never had an exit plan with BIL or IEL,IEP,TKM,or Mt Charlotte..
Doudt he has one here.
NTA will quickly disappear should they show a loss,and with such slim margins the stock take,could result in either a profit or a loss.
The profitable finance company, depends on retail to supply the customers,so not a lot of value without retail.
Take care.

[dubya]

Thanks for that Percy. I appreciate your comments. I thought a few more people on here might have been holders and had a view, but I guess it’s not a widely held stock. Time will tell I suppose. And btw, you were one of the people I referred to in my first post on this forum. Cheers.

[blackcap]

Thanks for that Percy. I appreciate your comments. I thought a few more people on here might have been holders and had a view, but I guess it’s not a widely held stock. Time will tell I suppose. And btw, you were one of the people I referred to in my first post on this forum. Cheers.

Hi Dubya, I do hold a few of these as well. Happy with the 3.5 cents per annum dividend to date, but watching with a wary eye as to how the company keeps performing. Its a tough market out there. The icing on the cake is the finance division which pretty much makes all their profit. So retail is pretty much breaking even. So can go both ways here. Can get a margin of a % or 2 and really do well or make -2% margin and really start to suffer. What Brierly and Sandon are doing I am not sure, Sandon say they are activist investors but to date have not really seen any "activity" from them. Good luck.