WHS - Warehouse Group

[value_investor]

Hmm - is there something wrong with my eyes or did WHS really manage to break through the MA 100 and now touching the MA 200?

Retail must be doing really well these days if the tide manages to even lift wrecked vessels like that - or is anything changing with the WHS?

Actually - been there recently (looking for some outdoor furniture) and couldn't make out a difference - some stuff is really low quality and cheap as, and other stuff, which looks better, is as expensive as everywhere else.

So - not sure, whether this is just a ripple or whether the tide is turning ... but whatever it is - there are probably much better places to park once money ;

I actually came to a similar conclusion looking into it. On surface value, the valuation and dividend is great. Price has looked to stablise from the downtrend, and the dividend yield is very high.

However, the changes from the financial services business exit has left a lot of uncertainty to the point where the management haven't issued a guidance out. Which to me is very worrying. This is probably why they haven't issued anything regarding profit like they did last year around the holiday season (when they downgraded it).

Add in the fact that sales have stayed the same or gone down and the fact that the dividend is really being issued artificially on the back of the Newmarket asset sale in FY17. I'm not sure that they will be able to manage it long term given the pressures in their new strategy or having "everyday lower prices". Looking at the last sales update, I just don't see it.

Then I thought hang on, this holiday season I bought all my gifts online and not once did I use The Warehouse, majority of the time I was using Mightyape. I haven't been inside any of their stores apart from Noel Leeming in the past 6 months. Also I've started buying from Aliexpress and I know I'm not the only one. Even K-Mart these days are so well presented and modernised.

Based on probabilities, there's just too much uncertainty for me to put my money in this one. I'm not even a avid customer so its hard to associate with it. Like you said there are better places to have it at the moment. But hey, if anyone is brave enough and you can see it coming back with a vengeance then by all means. I'm not touching any retail stocks in 2018.

[JeremyALD]

Hmm - is there something wrong with my eyes or did WHS really manage to break through the MA 100 and now touching the MA 200?

Retail must be doing really well these days if the tide manages to even lift wrecked vessels like that - or is anything changing with the WHS?

Actually - been there recently (looking for some outdoor furniture) and couldn't make out a difference - some stuff is really low quality and cheap as, and other stuff, which looks better, is as expensive as everywhere else.

So - not sure, whether this is just a ripple or whether the tide is turning ... but whatever it is - there are probably much better places to park once money ;

Still a far cry from where it was a year ago. It seems department stores had a very good Xmas from Paymark information (not sure if WHS would be considered department), however if they didn't increase sales YOY this Xmas it would be a worry.

[hardt]

Still a far cry from where it was a year ago. It seems department stores had a very good Xmas from Paymark information (not sure if WHS would be considered department), however if they didn't increase sales YOY this Xmas it would be a worry.

Went into a big red yesterday and found the product mix is vastly different from what I remember.

Looks like they are desperately changing their image to a more friendly briscoes-esque establishment.. which seems to be the only way they will get slightly higher margin goods out the doors.

Selling the cheapest products you can find with razor thin margins will inevitably lead to a far greater impact of the major decline in foot traffic which is taking over retail globally... not long before it gets here ( other than behind, why would NZ be different )

Staying far away from non exclusive brick and mortar retailers for now... not to say there isn't money in it shorter term.

[winner69]

Hmm - is there something wrong with my eyes or did WHS really manage to break through the MA 100 and now touching the MA 200?
;

Spose one could now say that about $2.00/$210 is about as low it will go.

Amazing that over the last 200 trading days the WHS share price has averaged $2.10 odd. That’s the best part of a year.

Prob just confirms that buying in a downtrend and/or holding and/or hoping that Nick’s strategy is going to work isn’t the best investment plan

Is the last week the usual holiday rise or some actual confidence in this stock

Hey BP ...might be a golden cross soon.

[BlackPeter]

Spose one could now say that about $2.00/$210 is about as low it will go.

Amazing that over the last 200 trading days the WHS share price has averaged $2.10 odd. That’s the best part of a year.

Prob just confirms that buying in a downtrend and/or holding and/or hoping that Nick’s strategy is going to work isn’t the best investment plan

Is the last week the usual holiday rise or some actual confidence in this stock

Hey BP ...might be a golden cross soon.

Which might be evidence that not all which shines is gold ; But yes, technically we might get a golden cross. If you have the SP oscillating in a rather narrow channel (between $ 2 and $2.30) there are opportunities for plenty of golden and other crosses without a lot of fun!

[winner69]

Not so flash trading update but Nick says it’s all going to plan so no worries

The paragraph below says they have put about $8m (maybe more)aside for staff incentives (hopefully not just senior management but it does mention retaining global talent) ...

Our forecast for H1 Adjusted Net Profit from continuing operations for the Group is $32m-$35m, which is 22%-28% down on the comparative continuing operations performance last year. The result for the half includes a significant accrual for a redesigned incentive programme, intended to reward better than expected financial performance along with reinforcing specific behaviours necessary to execute the transformation. It recognises the need to retain staff and recruit top global talent through this rapid period of radical transition. If the second half year (H2) performance fails to deliver on our improved outlook, the accrual will be reversed to profit. If not for the accrual, our financial performance in H1 would be close to last year’s.

[Beagle]

Not so flash trading update but Nick says it’s all going to plan so no worries

The paragraph below says they have put about $8m (maybe more)aside for staff incentives (hopefully not just senior management but it does mention retaining global talent) ...

Our forecast for H1 Adjusted Net Profit from continuing operations for the Group is $32m-$35m, which is 22%-28% down on the comparative continuing operations performance last year. The result for the half includes a significant accrual for a redesigned incentive programme, intended to reward better than expected financial performance along with reinforcing specific behaviours necessary to execute the transformation. It recognises the need to retain staff and recruit top global talent through this rapid period of radical transition. If the second half year (H2) performance fails to deliver on our improved outlook, the accrual will be reversed to profit. If not for the accrual, our financial performance in H1 would be close to last year’s.

Financial engineering / management creating a bigger trough for themselves... at it's finest. They keep talking the talk that there is some hope they can stop the tide going out and now are designing multi million dollar incentive plans for senior management that will reward what could be "at best" mediocre financial performance. This is akin to saying if you can plug the leaks in the dam we'll give you a multi million dollar bonus, never mind whether the dam is catching more water or if there is systemic structural issues with the dam that will lead to its almost inevitable demise.

Just look at the long term trend in the SP...

[winner69]

Extracting the facts from all the good news that Nick goes on about

Red - Same Store Sales were down (2.8%) over the critical Christmas period compared to the Q1 rate of (4.0%). .....Not good - jeez that 2.8% is quite a decline over Christmas considering that Q1 was up 4%. Selling heaps more stuff but for less dollars overall ...hmmm

Stationery - we expect sales to be down approximately 6.5% at the first half (H1) . They were down 7.2% down at Q1 so the ship not sining as fast. However Nick did say after Q it is expected to return to normal trading levels as the business heads into the critical Christmas and Back to School periods. This not hap

NL / Torpedo - Noel Leeming continues to perform strongly. Likewise, Torpedo7 retail has been steadily improving during the year. --- Thats good but the saviour the group need. Interestingly and maybe telling is no indication of how strong performing strongly actually is


No wonder profits continue to decline ....but no worries Nick has it under contral

[winner69]

Financial engineering / management creating a bigger trough for themselves... at it's finest. They keep talking the talk that there is some hope they can stop the tide going out and now are designing multi million dollar incentive plans for senior management that will reward what could be "at best" mediocre financial performance. This is akin to saying if you can plug the leaks in the dam we'll give you a multi million dollar bonus, never mind whether the dam is catching more water or if there is systemic structural issues with the dam that will lead to its almost inevitable demise.

Just look at the long term trend in the SP...

On one hand they remain optimistic of success by making an accrual .....but on the other hand they have little confidence by saying they will write it back to profit if it don't work.

And Beagle the incentives not all about financial results .... it is also about rewarding specific behaviours

[Beagle]

Didn't paymark or whoever that electronic outfit is report record Christmas and Boxing day sales mate ? I know Rod Duke is reported as saying they had their best December in years.
Still...Nick knows best...that's why they're installing charging points at their warehouse stores to charge electric cars that their shopping demographic can't afford ?...go figure ?
That will be good in ten years time when electric vehicles are affordable enough for their customers to have them so I suppose you could argue that management are forward thinking...assuming the company survives another 10 years
Suppose I should try and give up my fascination with their super slow motion train wreck...