BGR - Briscoes Valuation

[emearg]

The result is out. Not bad work I reckon.

Here is the commentary:
Managing Director, Rod Duke said, "We are reasonably pleased with our sales, margins and overall performance for the final quarter of the year. Competition was fierce across most retail sectors but customers responded favourably to our marketing initiatives, which continually reinforce our unique product quality, range and value combination. Trading was particularly strong immediately prior to and post Christmas, and we were especially pleased with the significant lift in sales achieved by our online stores across all three trading brands for December. We will continue to drive all of our businesses to ensure our customers have the best possible choice of product and that they have a great in-store experience. It's not sufficient just to offer on price! It is clear that to attract customers it is essential to provide a great value proposition.

"The performance of Rebel Sport is also a highlight for us this year given the extremely high comparative numbers we were up against as a result of the significant boost in business generated by the Rugby World Cup in 2011. For Rebel Sport to post positive same store sales, increased gross profit margin and increased bottom line profit for the year is an achievement we are very proud of.

"We now expect the Group's reported full year tax paid Group profit to exceed $30.0 million. This would represent an increase of at least 9% over last year's $27.53 million reported full year NPAT."
</commentary>

9% boost in profit! Good work Rod Duke and team says this happy owner of a wee slice of the Briscoes pie. Emmmmm pie

[KJ]

I decided to sell today as it is probably overvalued like a number of stocks.
Current yr NPAT will be about $30.4m-PE 17.3
Next yr say NPAT $33.4m-PE 15.8
If the market generally comes back BGR will fall off quite a bit I think & WHS may be a tougher competitor as it looks to improve the brands it offers.Could be completely wrong of course.

[emearg]

Think you left too soon...special divs to come because of all the cash.

I agree with the first part but I'm not sure about a special dividend. They have been sitting on a large pile of cash for many years which meant they didn't have to worry about debt restructuring during the GFC. That is how Rod likes to run things i.e. in a conservative manner. They did make the point a year or two back that the pile of cash varies significantly (40 million?) over a 6 month reporting cycle.

Has there been anything announced that makes you think a special dividend is coming?

[KJ]

Think you left too soon...special divs to come because of all the cash.

Ah-fear & greed.I have a good profit and am happy with that.I see what I think are better opportunities for my money.No one can know the short term price movements & that is how it is.Is the price going to continue to rise? maybe.Will there be a special div? maybe.Will the price be $2 in 3 mths time? maybe.

[emearg]

Ah-fear & greed.I have a good profit and am happy with that.I see what I think are better opportunities for my money.No one can know the short term price movements & that is how it is.Is the price going to continue to rise? maybe.Will there be a special div? maybe.Will the price be $2 in 3 mths time? maybe.

Nobody really knows the answers to those questions but the same questions can be asked about all stocks. BGR is looking expensive compared to WHS but I wouldn't put any money into the WHS as their business plan is a disaster in my opinion. So cheap doesn't mean good value.

Out of interest what are you buying into with your BGR money?

[winner69]

Nobody really knows the answers to those questions but the same questions can be asked about all stocks. BGR is looking expensive compared to WHS but I wouldn't put any money into the WHS as their business plan is a disaster in my opinion. So cheap doesn't mean good value.

Out of interest what are you buying into with your BGR money?

How do you guys 'value' the cash when saying BGR looks expensive

[emearg]

How do you guys 'value' the cash when saying BGR looks expensive

I don't think BGR is expensive. I just said it looks expensive when compared to WHS (on a PE basis)

[KJ]

Emearg-have not bought yet as I feel the market may well come back-am interested in TEL-I tend to buy mainly good div stocks.

[KJ]

Emearg-have not bought yet as I feel the market may well come back-am interested in TEL-I tend to buy mainly good div stocks.

And FBU at $8 or less

[emearg]

And FBU at $8 or less

Yes the market may come back but it may keep going up for the next 6 months...

FBU has been trending up for the last four months. With Chch, Mainzeal etc I can't see any reason for it to fall below $8. The current share price is forward looking and that seems completely reasonable to me.

BGR has been trending up for the last 12 months. I can't any reason for it to go backwards as they keep producing better and better results. Doesn't BGR pay a good dividend?