WHS - Warehouse Group

[winner69]

Winner we only moved 50% percent of the position to ASX stocks:

Yes short term the profits will probably continue.

Mr B voiced concerned we had over the P&L. You will notice many of these retailers have Older Ascii text based screens at the counters.

Nothing wrong with that but it shows you that the retail inventory system are older and how WHS handles its IT will be critical.

Then if the move to cloud that brings a whole new nightmare as IT people start to realise that just a new server model that replies on REST API's

the nightmare of moving older systems can actually have a huge effect in the next few years on getting those logistic system more efficient.

the big moves in the future will be in travel and travel technologies.

Yes the DIV is huge! Not doubt about it but the near term profit on the trade out weights being stuck in a NZ stock that faces head winds.

There are 40% gains to be made next year on other exchanges in certain sectors.

A diversified portfolios is safer than going overweight on retail companies with old technologies.

There is a chance that Retail NZ is going to be left so far behind technology wise in the next 5 years .

Every time we see those old ascii screens i start to think OH dear.

Notice that MS's new GUI is starting to look like a phone as they start to create a more plug and play OS.

Plug and Play is where its at and the more i get to play with our new toy the more i realise the future is this distributed software model that runs on multiple OS's.

never want to go back to using standard stuff that cant move across boundaries.

These firms face some big problems if they havnt started to move data where it can be reused for the new retail experiences.

Great post waltzingman, especially the interesting and intriguing insights into technology retailers use.

Have you any insights into HLG technology, at the POS. Last time I bought from them in store the POS didn’t look that switched on……but what the heck do I know.

Online works OK’ish

[winner69]

I love the way you bring obscure investment lingo back into the domain of everyday use Winner. I had to look this one up though:

'Goof will': The unrealistic hope(s) of stupid investors, expecting a return that just cannot be justified on any rational basis

Good one! Although I am not sure if there is any real consequence of the Warehouse losing a bit of that? Not sure what the solution is though. In this low interest rate environment, maybe just a reset of expected returns based on more historic interest settings and market trading patterns?

SNOOPY

Very good snoops

So can I assume you are not a goofball and not interested in ‘investing’ in WHS

[Waltzing]

Winner - tech informed this morning that some older technologies continue to be used as the cost of putting a terminal linked by dedicated lines back to the servers is still cheaper than a whole new cloud system.

Just saying that the data needs to be in a format where the shopper can see a lot more in Virtual modes and fashion retail this is important. Buying buckets and spades at the warehouse isnt a problem for going to the beach.

As investors just looking at a P&L published in the annual report isnt going to cut it in terms of going overweight.

Probably why a lot of retail investors will go for retirement stocks. The medical facilities are kept modern and its a no brainer if the financials are clear. It just if the capital gains taxes on suites chip away at the retail investors capital gains.

WHS is now a GROUP and that means how are there systems working together and not duplicating admin and IT.

Margins and stock turn critical in this types of retail groups.

News this morning that all regions will have be to over 90 before auckland border opens.

As Hillary said OPEN! Gvt is starting to back itselfs into a corner and no one has in business has certainty.

Its all becoming a coin toss.

WHS directors are between a R and H.

[DonkeyKong]

Just for a bit of fun. I am pulling out the crystal ball.

As has been covered on this thread before. “The final dividend has been declared on the assumption that New Zealand is predominantly at Level 2 from the end of October.”. With key word “predominantly” being somewhat vague. And which measurement they would use also being vague.

The definition of “predominantly” is “for the most part“.

It is most likely Auckland and parts of the Waikato will still be in level 3 at the end of October.

At 30 June 2021, stats NZ estimates the NZ population to be 5,122,600 and Aucklands at 1.72 million. At the 2018 census they have Waikato at 458,202. So without taking into account it being parts of the Waikato region in level 3. Auckland plus Waikato is roughly 42.5% of NZ.

So if they used population as the measure. Then by definition, New Zealand is “for the most part” in level 2, i.e. at 57.5%. However, not significantly for the most part.

Which means they could give the dividend. But since it is not significantly for the most part, they could be prudent and justify not giving the dividend.

So what else might come into play?
- There is the cash burn issue beagle has mentioned. (I haven’t looked into this myself)
- The new traffic light system should come into play for Auckland in December. Opening retail shopping at the physical stores for the warehouse group.
- Do they use a measure other than population? Eg store locations?
- 70% of WHS shareholders are insiders. Do they want their dividend or would it shoot them in the foot? How much influence do they have?

My prediction. They will cancel the dividend to see how the Christmas period goes. And a reaction share price drop of 5-10% i.e. the dividend plus a little bit more for panic selling. Then if things go well, maybe there will be a special dividend.

Putting away the crystal ball now.

[nztx]

Just for a bit of fun. I am pulling out the crystal ball.

As has been covered on this thread before. “The final dividend has been declared on the assumption that New Zealand is predominantly at Level 2 from the end of October.”. With key word “predominantly” being somewhat vague. And which measurement they would use also being vague.

The definition of “predominantly” is “for the most part“.

It is most likely Auckland and parts of the Waikato will still be in level 3 at the end of October.

At 30 June 2021, stats NZ estimates the NZ population to be 5,122,600 and Aucklands at 1.72 million. At the 2018 census they have Waikato at 458,202. So without taking into account it being parts of the Waikato region in level 3. Auckland plus Waikato is roughly 42.5% of NZ.

So if they used population as the measure. Then by definition, New Zealand is “for the most part” in level 2, i.e. at 57.5%. However, not significantly for the most part.

Which means they could give the dividend. But since it is not significantly for the most part, they could be prudent and justify not giving the dividend.

So what else might come into play?
- There is the cash burn issue beagle has mentioned. (I haven’t looked into this myself)
- The new traffic light system should come into play for Auckland in December. Opening retail shopping at the physical stores for the warehouse group.
- Do they use a measure other than population? Eg store locations?
- 70% of WHS shareholders are insiders. Do they want their dividend or would it shoot them in the foot? How much influence do they have?

My prediction. They will cancel the dividend to see how the Christmas period goes. And a reaction share price drop of 5-10% i.e. the dividend plus a little bit more for panic selling. Then if things go well, maybe there will be a special dividend.

Putting away the crystal ball now.

or they could simply defer paying out until later, like many did in & following earlier lock downs ..

MHJ did this dividend deferral type job after declaring a dividend.

[Beagle]

For what its worth I'd put money on your crystal ball being accurate. Predominantly is probably derived from the word dominate. Dominate does not speak of just a little more than 50%

https://www.thefreedictionary.com/pr...20%22Egrets%2C

[DonkeyKong]

or they could simply defer paying out until later, like many did in & following earlier lock downs ..

MHJ did this dividend deferral type job after declaring a dividend.

That would be interesting. I hadn’t considered that.

[LaserEyeKiwi]

Just for a bit of fun. I am pulling out the crystal ball.

As has been covered on this thread before. “The final dividend has been declared on the assumption that New Zealand is predominantly at Level 2 from the end of October.”. With key word “predominantly” being somewhat vague. And which measurement they would use also being vague.

The definition of “predominantly” is “for the most part“.

It is most likely Auckland and parts of the Waikato will still be in level 3 at the end of October.

At 30 June 2021, stats NZ estimates the NZ population to be 5,122,600 and Aucklands at 1.72 million. At the 2018 census they have Waikato at 458,202. So without taking into account it being parts of the Waikato region in level 3. Auckland plus Waikato is roughly 42.5% of NZ.

So if they used population as the measure. Then by definition, New Zealand is “for the most part” in level 2, i.e. at 57.5%. However, not significantly for the most part.

Which means they could give the dividend. But since it is not significantly for the most part, they could be prudent and justify not giving the dividend.

So what else might come into play?
- There is the cash burn issue beagle has mentioned. (I haven’t looked into this myself)
- The new traffic light system should come into play for Auckland in December. Opening retail shopping at the physical stores for the warehouse group.
- Do they use a measure other than population? Eg store locations?
- 70% of WHS shareholders are insiders. Do they want their dividend or would it shoot them in the foot? How much influence do they have?

My prediction. They will cancel the dividend to see how the Christmas period goes. And a reaction share price drop of 5-10% i.e. the dividend plus a little bit more for panic selling. Then if things go well, maybe there will be a special dividend.

Putting away the crystal ball now.

The dividend announcement regarding “most of country being in level 2 at end of October” was done before the Auckland 3-step reopening process was announced (which has retail reopening under level 3 at “step 2”), and also before the traffic light system was announced (for which retail is open under every level).

by “level 2”, management was highly likely to be referring to retail being open, which now is no longer limited to level 2 conditions.

The government has essentially all but guaranteed Auckland region retail will be back open again before Xmas (in either “level 3 step 2”, or under traffic light “red” level). there is no vaccine level requirement for retail opening in Auckland under level 3 step 2. It could in fact happen next week for all we know (though I think is more likely a few weeks longer away). The new vaccine mandate also does not apply for retail, meaning they can reopen retail before the vaccine certificate program is in place.

Given that, and the strong retail spending numbers outside of Auckland (and even inside Auckland under click and collect and delivery conditions), I think WHS management will be comfortable with the dividend payment proceeding, even with in store retail shopping not being open in Auckland & Waikato at end of October.

Yes there is a chance the dividend is delayed, but I think you all are way overhyping the situation. Even then a minor time delay for the dividend payment is just that, minor.

‘the dividend payment, while large, is a small portion of their cash on hand - I think the conditions for which they will consider not paying it are not present.

Lastly, I think the last line of the dividend announcement gives a very clear indication about management commitment to paying dividends: “We are pleased to be able to declare a final dividend, even in the wake of further COVID-19 lockdown periods following year end”

[LaserEyeKiwi]

FYI the annual WHS shareholder meeting was announced yesterday for November 26th.

https://www.nzx.com/announcements/381652

[LaserEyeKiwi]

And here comes Covid in Christchurch just to make a mockery of my dividend optimism above. Ha ha ha.