BGR - Briscoes Valuation

[nztx]

Both Warehouse & Briscoes hungry for a big acquisition - good time to be a retail operator with a possibility of two big fish hungry to acquire you.

Fascinating to me at least to consider what sort of business both of these firms might be looking into acquiring, and whether they are biding their time pending the outcome of the commerce commission review of the Supermarket Duopoly. If ComCom decides the big two need to divest and/or allow others to access their supply chain, then that would be a big opening for many large players.

Is it ?

At least Two big hungry overseas fish swimming close in looking to secure spots & take a large bite out of Kiwi retail isn't there ?

how might that affect the larger Kiwi Fish ?

[bull....]

boxing day sales should be massive , have the inside word there be a 50 - 60% of sale

[Rawz]

boxing day sales should be massive , have the inside word there be a 50 - 60% of sale

So just the same as usual then lol 😂

[Waltzing]

NO doubt everyone is eagerly checking out the box day numbers ..the fearless KIWI shopper..

https://www.nzherald.co.nz/nz/boxing...H2657V3INHSDQ/

[winner69]

NO doubt everyone is eagerly checking out the box day numbers ..the fearless KIWI shopper..

https://www.nzherald.co.nz/nz/boxing...H2657V3INHSDQ/

Using words like 'blitz' and 'whopping' the commentators and journos have made out this is fantastic news ....but there are words like 'decline' and 'down' and 'drop down' etc

But no worrries ..... let's believe it's all hunky dory and the retail juggernaught continues to speed down the freeway

[Waltzing]

yes and now peek days not one day.. but the comments at S Park in TV 1 last night was the shoppers says we are not going to stay locked up.

they are going to go out into the great southern summer.

its a positive attitude to life even in difficult times.

[winner69]

Briscoes share price up quite a lot since WHS saying sales have been pretty poor

Punters maybe assuming that Briscoes have taken a lot of business away from the Red Sheds and T7

[winner69]

Rod said when announcing half year full year profit going to be above prior year $73m and up to $85. He repeated this in November after Q3 sales release.

So assuming still on track H222 profit will be between $26m and $37m

That will be 43% to 43% less than H221 ..... the same time frame as WHS H122 and their profit going to be 60% down in same period

Rod done a good job signalling how tough those six months are going to be without spooking the market .... I think so

If Briscoes come in a way below below that $73m Rod be slaughtered

[Rawz]

Rod said when announcing half year full year profit going to be above prior year $73m and up to $85. He repeated this in November after Q3 sales release.

So assuming still on track H222 profit will be between $26m and $37m

That will be 43% to 43% less than H221 ..... the same time frame as WHS H122 and their profit going to be 60% down in same period

Rod done a good job signalling how tough those six months are going to be without spooking the market .... I think so

If Briscoes come in a way below below that $73m Rod be slaughtered

Genuine question.. how is it that MHJ is the only NZX retailer increasing HY profits? BRG, HLG, WHS all way down.. ?

[Muse]

Genuine question.. how is it that MHJ is the only NZX retailer increasing HY profits? BRG, HLG, WHS all way down.. ?

I'm not sure thats the full picture. Briscoes runs a 31 January year end - so their 2022 financial year will be coming to a close very soon. Briscoes provide quarterly updates, so the half year is known (1HFY22 up), and Q3FY22 not surprising down on FY21, and thus 2hFY22 not yet known or completed (but we can safely assume it will be down). Regardless of half year performance, briscoes did provide full year guidance that FY22 would be up on FY21's full year (record) NPAT of 73.2m, and be as high as $85m. As far as I can tell, forsyth barr are the only broker still actively covering BGP (both jarden & macquarie have in the past). Forbar were initially forecast FY22 NPAT of $96.6m immediately prior to lockdowns and haven't yet updated (awaiting the full year results) but the analyst did comment that while it would be highly unlikely briscoes would meet forbars forecast they expected it would still exceed the upper end of their guidance. Duke has been pretty bullish (when has he not) on trading so lets just assume $85m NPAT - that's 16% year on year growth in npat - pretty impressive, and aside from MHJ probably the only nz retailer to do so (the warehouse and hallenstein glassons certainly will have declining profits year on year).

Specific to MHJ - people forget what absolutely dire financial circumstances they were in. FY20 their normalised npat was only $9m, declining revenue with compressing margins, high working capital and terrible return on funds employed, had debt and net debt equivalents in the form of employee liabilities they had to square up (long story). The turn around they executed came at the right time, catching the wind, increasing margins, fixing up its balance sheet etc. So the returns have been geometric rather than just arithmetic like for most retailers. You gotta love these turn arounds - STU included - that come at the right time.