IPL - Investore Property

[Snoopy]

Snoops this article mentions 10 mio a year profit from a PaK n Save , quite a few years back . These are the numbers I have heard , look at the NBR Wealth list ….Not sure you can trust the countdown numbers , 400 mio to change the name …
https://www.stuff.co.nz/business/350...tail-landscape

Thanks for that reference stoploss. Interesting reading. The article says:
"It was estimated at one point that Glen Innes Pak’nSave was making $10m a year."

I am not sure how much credence you could give that statement. It sounds like a hyped up theoretical peak point maximum with no supporting evidence, if $10m is indeed NPAT. But since Tahua is private, we don't know what their debt structure is. So I suspect $10m is probably EBIT, or maybe EBITDA. I don't see how some commentator could come up with $10m per year, without inside knowledge. And there would be no reason to give a private commentator such inside knowledge.

Having said that, I don't doubt that Pak’nSave 's are much more profitable than Countdown's because Pak’nSave s are individually owned, and part of the Foodstuffs co-operative grouping. No high paid corporate infrastructure to serve like at Woolworths. Plus being an 'international corporate', there is a possibility of Woolworth's 'transfer pricing' inflating the cost base of Woolworths doing business in NZ. I haven't looked into this in detail. But all the numbers I previously quoted, bar the $200,000 from the radio broadcast, I pulled out of the Woolworths annual report.

$400m (albeit over 3 years) to transform Countdown into Woolworths does sound to be an extraordinary amount of money, I agree. But if Woolworths do spend that money, it would be a legitimate tax deductible expense.

Given all this, I can understand why you say you don't trust the Countdown/Woolworths numbers. But I think your statement is more a commentary on corporate charging practice, rather than the declared profit numbers being 'wrong' as such. Woolworths are clearly fulfilling all of their tax obligations and complying with the tax laws on both sides of the Tasman. The fact that each individual Countdown/Woolworths supermarket could be making a lot more money under a Pak'n save ownership structure is likely true. But it is not relevant to the actual tax structure under which Countdown/Woolworths operates.

Finally the NBR rich list must be speculative for valuing non-listed assets, and of necessity does not take account of private indebtedness needed to hold that estimated wealth, because such information is not publicly available.

SNOOPY