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Thread: KMD - Kathmandu

  1. #1181
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    New Zealand companies have an absolutely outstanding record of buying overseas investments for too much and at the wrong time. Don't worry, Xavier's gonna show them how its done.

  2. #1182
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    as at 14:27:21, Wednesday 21 March, 2018 (NZDT)
    Briscoe Group supports Kathmandu capital raising

    BGP
    21/03/2018 14:27
    GENERAL
    NOT PRICE SENSITIVE
    REL: 1427 HRS Briscoe Group Limited

    GENERAL: BGP: Briscoe Group supports Kathmandu capital raising

    Briscoe Group Limited (NZX /ASX code: BGP) today confirms it has participated
    in the capital raising announced by Kathmandu Holdings Limited (KMD)
    receiving confirmation of an allocation of 2,570,925 KMD shares from the
    institutional placement for a cost of $5,553,198. It also intends to
    participate in the Share Purchase Plan.

    Rod Duke, Group Managing Director said, "We are very supportive of
    Kathmandu's initiative to diversify the business and position it for greater
    international growth."

    For and on behalf of the Board of Directors

    21 March 2018
    Rod Duke
    Group Managing Director

    Briscoe Group Limited is a company incorporated in New Zealand and registered
    in Australia as a foreign company under the name Briscoe Group Australasia
    Limited (ARBN 619 060 552). It is listed on the NZX Main Board and also the
    Australian Securities Exchange as a foreign exempt entity. (NZX/ASX code:
    BGP).
    End CA:00315840 For:BGP Type:GENERAL Time:2018-03-21 14:27:21

  3. #1183
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    really intrigued that BGP, and Rod D personally, supports the OBOZ acquisition. He floated BGP and raised a lot of cash many years ago. At the time they talked of potential acquisitions. but BGP/Duke have never completed any acquisitions - except perhaps Living & Giving which was small, and the 20% stake in KMD. This was despite getting close on a few, I recall Baby Factory for example, and the ASX compliance listing for BGP (which always looked like an enabler for an acquisition. I thought ADH).

    Why then does he support the OBOZ acquisition. Duke's stated rationale for why it makes sense could equally apply to BGP. Ie, BGP could also "diversify and position for international growth" through an offshore acquisition, but they've never done it. And apparently, don't want to (for reasons we all could understand). Yet he supports the KMD initiative. I don't understand the logic. Is it being consistently applied?

  4. #1184
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    Perhaps it's a way to get growth and (overseas) diversification without risking the main asset - BGP - too much?

  5. #1185
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    Quote Originally Posted by macduffy View Post
    Perhaps it's a way to get growth and (overseas) diversification without risking the main asset - BGP - too much?
    It will be fantastic for 2 to 4 years.Can't open enough stores in USA to keep up with demand.Canada next,then Brazil.
    Then Xavier will resign for family reasons,just before it turns to custard.
    Shoes sold off at a great loss.Capital raise to pay off bank debt.
    Shareholders are saved as Rod makes a very reasonable takeover offer.[Reasonable for Rod}.

  6. #1186
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    “Reasonable for Rod” lol

  7. #1187
    2019 NZ Stock Picking Winner silverblizzard888's Avatar
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    This acquisition probably isn't a splash in the water kind of move that investors like, but its a well calculated move to grow without putting too much pressure on the pace of store openings to bring all the growth.

    For those that think Rod isn't entirely with this plan I'd say you're wrong. This is totally a Rod type move. By acquiring Oboz and as they have mentioned in the statement, they want to head into the wholesale market. Taking the wholesale market approach to expand into North America is totally the Rod approach, its very conservative and calculated. Its a way for KMD to sell more product without opening any stores, which lowers the downside by a lot if they don't do well there. I think they have learnt their lesson from the UK where opening stores wasn't a immediate hit. Its a bit different for Rod at Briscoes since he couldn't take the same approach cause it doesn't manufacture its own branded products, but Kmd do and this is a very similar strategy that Rod wanted to do when he wanted to acquire Kmd a couple years ago.

    Its too easy to think KMD can do it all, considering their success in NZ and AUS its a easy mistake to think the same model works elsewhere. At the end of the day KMD is a manufacturer of their own goods who just happens to sell their own goods in their own stores too. The Oboz acquisition opens up channels and networks that will help them sell their product in overseas in the wholesale approach. If you looked at Adidas and Nike they used the wholesale approach for a very long time in a lot of countries and when their products grew too influential and sales amounted to the point where it seemed ridiculous not to open their own stores thats when they did. I think its a good approach.

    The value of the deal is average on present financials, they are paying over $100 million NZ for about $5 million net profit for Oboz for the upcoming financial year, but the net profits are growing over 80% and revenues 36%, which probably if consistent then perhaps they will deliver 9 million net profit next financial year and from then on the profits will justify the price tag and bring a lot of future benefits for Kmd. On financial terms its average value, but for future profits and connections it brings then its not too bad. Long term holders its a pretty good thing, short term holders I don't think theres much for you.
    Last edited by silverblizzard888; 21-03-2018 at 10:11 PM.

  8. #1188
    Speedy Az winner69's Avatar
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    Silverblizzard - good post but I reckon Rod’s/Briscoes main motive in ‘supporting’ the deal was not to dilute their current holding.

    Good they going to participate in the SPP as well ...... all $15,000 worth. Cool!
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  9. #1189
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    What is their point of difference in the USA the home of retail? Not keen on their push unless its real low key.

    At the moment I cant see what niche they will fill.

  10. #1190
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Schrodinger View Post
    What is their point of difference in the USA the home of retail? Not keen on their push unless its real low key.

    At the moment I cant see what niche they will fill.
    Think Appalachian Trail
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

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