WHS - Warehouse Group

[Ogg]

The sell off continues.

[Beagle]

http://www.4-traders.com/WAREHOUSE-G...364/revisions/

Revisions for earnings for 2017 tell the sad story. I simply don't "buy" the recovery story next year and think 19 cents EPS forecast is a joke. I think its clear to "blind freddy" management have bought themselves more losses by sticking to trying to recover a systemically flawed finance department offer. They are simply too embarrassed to admit they've made a massive mistake and as a result these ongoing losses may dog the company for years to come. First lesson in business is if you have a business division which is systemically flawed, surgically remove the thing before the cancer spreads !
I think they struggle to make 15 cps next year, (probably a LOT less after the next round of restructuring costs) and why anyone would give current management a PE of more than 10 is beyond my comprehension. Best chance for the company is a takeover but why would any company want to takeover WHS with its aging model of a widespread footprint of ultra big format expensive leases ?

[Balance]

http://www.4-traders.com/WAREHOUSE-G...364/revisions/


I think they struggle to make 15 cps next year, (probably a LOT less after the next round of restructuring costs) and why anyone would give current management a PE of more than 10 is beyond my comprehension. Best chance for the company is a takeover but why would any company want to takeover WHS with its aging model of a widespread footprint of ultra big format expensive leases ?

Talked to an ex-video shop owner and he lamented that he left the game too late to get any value for his shop 2 years ago when he tried to sell it. Was a great business when he set it up (franchise) 15 years ago - huge profits and phenomenal cash flow. Too easy to just keep it going until it was too late to get out.

Starting to get the same feeling with the Warehouse?

[Beagle]

Talked to an ex-video shop owner and he lamented that he left the game too late to get any value for his shop 2 years ago when he tried to sell it. Was a great business when he set it up (franchise) 15 years ago - huge profits and phenomenal cash flow. Too easy to just keep it going until it was too late to get out.

Starting to get the same feeling with the Warehouse?

Your analogy isn't without merit. Holders will no doubt point to the fact that there is still some modest sales growth and cling on in the belief that this icon of N.Z. retail cannot possibly head the way of the dinosaur but I have some reservations. Its such a tired old mature brand and management seem determined to keep shooting themselves in the foot and seem unable to execute a new and truly fresh strategy.
Death by 1000 cuts unless they can somehow totally reinvigorate what is surely a very mature brand. Holders are very, very "brave" in my opinion. What if they really stuff things up in FY18 just like FY17 and only make 7-8 cents EPS, how does the market price them then ? How many times can you restructure a restructured company before the market totally loses confidence ?
Interestingly over ten years ago on 31 January 2007 they were $7.30. The very long term chart looks pretty damming and the short term SP chart looks even worse

[bull....]

Statement put out by Amazon

"Amazon Web Services launched an Australian region in 2012, we launched a Kindle store on amazon.com.au in 2013 and we now have almost 1000 employees in the country," Amazon said.
"The next step is to bring a retail offering to Australia, and we are making those plans now."


http://www.theage.com.au/business/re...19-gvo6lb.html

[Balance]

Your analogy isn't without merit. Holders will no doubt point to the fact that there is still some modest sales growth and cling on in the belief that this icon of N.Z. retail cannot possibly head the way of the dinosaur but I have some reservations. Its such a tired old mature brand and management seem determined to keep shooting themselves in the foot and seem unable to execute a new and truly fresh strategy.
Death by 1000 cuts unless they can somehow totally reinvigorate what is surely a very mature brand. Holders are very, very "brave" in my opinion. What if they really stuff things up in FY18 just like FY17 and only make 7-8 cents EPS, how does the market price them then ? How many times can you restructure a restructured company before the market totally loses confidence ?
Interestingly over ten years ago on 31 January 2007 they were $7.30. The very long term chart looks pretty damming and the short term SP chart looks even worse

A few thoughts :

1. WHS does have a valuable retail footprint - all the restructuring to date has been about adding onto the footprint and moving into other businesses rather than maximizing use of the existing footprint. So every year that goes by reduces the value of that footprint.

2. The footprint, as Roger has pointed out, has been used to maintain a high dividend via sale & leaseback of properties. It is still mindboggling that WHS had $811m of lease commitments in the last financial year.

3. Takeover? Telling that JP did not take the opportunity of the NZX50 exit to top up their stake towards 20%?

[whatsup]

I wonder what the Norman ( Pasceo ) family is thinking of their "investment " now, maybe WHS should bring them on into the management team to produce the magic that they did with Farmers and several other retail purchases!

[Jim]

I wonder what the Norman ( Pasceo ) family is thinking of their "investment " now, maybe WHS should bring them on into the management team to produce the magic that they did with Farmers and several other retail purchases!

WHS is into a slippery slope. Is now in uncharted territory. Wait till Amazon appears, interesting time ahead

[Balance]

WHS is into a slippery slope. Is now in uncharted territory. Wait till Amazon appears, interesting time ahead

Nope - sp was here back in 1999.

[nocomment]

i see morningstar are recommending buying WHS ... does anyone pay attention to these recommendations? or are they just automatically generated based on the current price vs their calculated value? anyone thinking they should just sell WHS now and cut losses? how much lower is this rollercoaster going