WHS - Warehouse Group

[winner69]

onlinesid ... was 375 earlier

Heck ... where are the faithful ... all though who thinks the WHS is a great story and once Aust was gone the world be a lot brighter and as icehot sais a shareprice of 600 soon.

Looks like the market has at last deemed WHS to be a DOG ... an unwanted one at that .... and probably with fleas as well

Bongo - you are the man ... you were right .... HQ staff were and probably are still in a panic ... more bad news to come out? ... or was it because they all are likely to lose their jobs soon.

[onlinesid]

quote:Originally posted by Bling_Bling

If Tindell sells his stake, the price will jump 20% !

Care to ellaborate further?

[Bling_Bling]

quote:Originally posted by onlinesid

quote:Originally posted by Bling_Bling

If Tindell sells his stake, the price will jump 20% !

Care to ellaborate further?

The best thing for WHS is a major stakeholder that can add value to the company. It seems like Tindell has done his bit and time to move over for a larger company that has the muscle behind them to takeover and move this puppy to the next level.

[minimoke]

Given they were at the London Employment Expo looking for senior distribution / logistics people suggests there are more than one or two challenges ahead.

[Dimebag]

Just posted this on the other WHS thread:

Last year WHS made about $108m pre-tax & abnormals. Australia contributed a loss of about A$5.4m.

Following the sale of the Australian "assets", WHS's consolidated earnings should increase by about $6m from the de-consolidation of the AU losses, and a further $6m from the reduction in interest outgoings (assuming the $99m is used to retire debt).

WHS's adjusted pre-tax earnings would therefore be about $120m, or about $80.4m after taxes. This equates to about 26.3cps.

At $3.68, WHS are therefore trading at about 14x earnings, the lowest in a long time, but still not an exceptional bargain. It equates to a pre-tax earnings yield of 10.67%, and post-tax of 7.15%.

WHS's NZ growth has slowed considerably in recent times. EBIT was down more than 8% last year, and sales flat. Q1 2006 saw a continuation of this trend; total sales were up 3.2%, but the all-important same store sales a more meagre 0.2% (much below the rate of inflation). WHS is therefore continuing to lose market share. WHS stationary was up 2.9%, with same store sales down by 1.6%. Clearly, the detour into Australia has had the unfortunate consequence that WHS have neglected their NZ business - their strongest asset - and have continued to lose ground and have their competitive advantages steadily eroded.

It was always difficult to see WHS making headway in foodstuffs, given the very efficient and established operating model of the likes of Pak'n'Save which have the discount segment sown up. The liquor venture has some potential, but it won't add materially to WHS's aggregate results.

As such, it appears as though WHS has largely gone "ex growth", and will be prices largely as a dividend stock from here.

A full payout would yield 10.67% pre-tax, which is not too shabby, but that rests on the assumption that WHS can sustain margins at their present levels. This may or may not be a fair assumption.

Whatever the case though, it is difficult to see a large amount of upside in WHS's price at any point in the future, at least unless and until they get there act together in NZ & perhaps move to a position of gaining market share again.

All in all, one would have to conclude that WHS at $3.68 is priced about right, and might appeal to those looking for pre-tax dividends of 8-10%.

Cheers,
Dimebag (none held)

[CJ]

I guess this makes it official, WHS is a Dog:

http://www.fatprophets.com.au/conten...dor%2c+Fat+257

[Bling_Bling]

Where is the growth coming from?

[onlinesid]

It still falling lower even when I thought it's reached the bottom!

[Dimebag]

There is no growth moving forward - that is the point. WHS are now a dividend stock.

The fact that a company has no growth prospects worth paying for does not make the stock automatically a dog. At a pre-tax earnings yield of say 13%, it would be reasonable value. The stock would have to sell for $3.00 for this to be the case.

For those looking for decent inflation-indexed income, $3.00 would be a buy IMO.

Dimebag (none held)
Current Price: $3.50

[winner69]

What will be interesting is what happens to WHS pricing strategy and the price roll back if the dollar falls to the level some a predicting

Remember it wasn't that long ago the NZD was worth USD 0.4. The rising currency has caused price deflation and margin problems for the WHS (because the number of things they sold did not increase) ... great for consumers though

latest catalogue has a lot of reference to November prices and previous prices .... what will happen when the new cost could be higher than the old sell price.

Probably will impact demand as well ... would ananda buy those cool Foxhole 3/4 pants for $30 in a few months time (the ones she paid $16.80 for the other day)

Maybe selling less for more might be an answer but the WHS overheads will continue to increase so overall margins might remain under pressure in the future ... bad if demand really drops away

Like Dimebag $3 might be where WHS wettles down at