BGR - Briscoes Valuation

[Filthy]

So.... BGP is trading 0.86c off its pre-Covid high of ~4.50 (23.6% off). In comparison, HLG is trading $1.63 off its pre-Covid high of ~$6.00 (37.3% off).
HLG with (what I perceive to be) a slightly better online offering, which is really important (especially if we bounce around these 'levels' for a bit). HLG also has a stronger divi (0.15 deferred, plus another in DEC and another in APR of maybe ~0.16 & ~0.15).... BGP with maybe 0.18(ish) total, so....at a guess, its maybe 7% vs 5%
Assuming both retailers (bearing in mind BGP is slightly more 'defensive' because of its diversification) continue to weather the storm and the divi-hounds (or beagles) come out in a low-interest environment, AND they both match their pre-covid results in ~2022, it seems to me that HLG has a bit more headroom for a return...
disc. hold HLG
disc. dont hold BGP, but happy to be convinced! (was looking for a ~$3.10 entry after Q2, but I seem to have missed the boat)

[emearg]

So.... BGP is trading 0.86c off its pre-Covid high of ~4.50 (23.6% off). In comparison, HLG is trading $1.63 off its pre-Covid high of ~$6.00 (37.3% off).
HLG with (what I perceive to be) a slightly better online offering, which is really important (especially if we bounce around these 'levels' for a bit). HLG also has a stronger divi (0.15 deferred, plus another in DEC and another in APR of maybe ~0.16 & ~0.15).... BGP with maybe 0.18(ish) total, so....at a guess, its maybe 7% vs 5%
Assuming both retailers (bearing in mind BGP is slightly more 'defensive' because of its diversification) continue to weather the storm and the divi-hounds (or beagles) come out in a low-interest environment, AND they both match their pre-covid results in ~2022, it seems to me that HLG has a bit more headroom for a return...
disc. hold HLG
disc. dont hold BGP, but happy to be convinced! (was looking for a ~$3.10 entry after Q2, but I seem to have missed the boat)

How much debt does HLG have? How much cash does it have in its war chest?

[winner69]

How much debt does HLG have? How much cash does it have in its war chest?

If rod sold his Kathmandu shares he would have heaps more eh

You know the answer to that question you asked bit get your point

[emearg]

If rod sold his Kathmandu shares he would have heaps more eh

You know the answer to that question you asked bit get your point

Actually I don't know much about HLG, but I presume they have debt because most listed companies do. BGR is pretty unusual in this regard. It served them well in 2008. It is serving them well now too I should think. This makes them a reasonably safe stock, at least in comparison with other retailers and I should imagine this is taken into account by the market.

[peat]

Actually I don't know much about HLG, but I presume they have debt because most listed companies do..

Not an unreasonable assumption but incorrect in this case
They don't have any significant debt.

[winner69]

Actually I don't know much about HLG, but I presume they have debt because most listed companies do. BGR is pretty unusual in this regard. It served them well in 2008. It is serving them well now too I should think. This makes them a reasonably safe stock, at least in comparison with other retailers and I should imagine this is taken into account by the market.

HLG have NO debt and at half year had $13m in the bank

They haven't had any debt for decades ..... fantastic stock management helps

[emearg]

HLG have NO debt and at half year had $13m in the bank

They haven't had any debt for decades ..... fantastic stock management helps

Told ya I didn't know much about them so that is good to know. My response to Filthy was made in good faith i.e. it was an honest question.

[winner69]

Told ya I didn't know much about them so that is good to know. My response to Filthy was made in good faith i.e. it was an honest question.

BGR's cash and KMD holding does complicate valuation a bit ....esp if using multiples and comparing to other retailers

[nztx]

BGR's cash and KMD holding does complicate valuation a bit ....esp if using multiples and comparing to other retailers

A rough calculation at lowest point of Covid times Mar - Apr suggested estimate of KMD
holding red ink on revaluation value in BGR Books was approx $100 Mil or 25% of BGR SHF

Since then the diluted BGR holding in KMD has significantly recovered in terms of SP

HLG & BGR are both pretty astute operators in their respective retail sectors & equally deserving of
much respect

I rate HLG slightly ahead due to their past up to recent dividend dividend record and lack of
equity holdings - rather 100% owned Australian interests, which have fared apparently well
when other competitors were failing.. The Rag trade is not easy for many operators at retail

As a holder of an expensive pre Covid-19 BGR bundle, the KMD holding very nearly meant not increasing,
which have now done & pleased to have done so. SP has now exceeded the averaged down cost

Let's see if BGR match HLG in now paying out something significant towards recognising
the cancelled March 2020 BGR Final Dividend

Discl: Holder in both HLG & BGR

[bull....]

HLG have NO debt and at half year had $13m in the bank

They haven't had any debt for decades ..... fantastic stock management helps

according to there interim report in 2020 they have 98m in total liabilities ( debt owing )