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16-10-2017, 10:07 AM
#951
Originally Posted by bull....
review under way , confirms to me from the research i undertook of the problems within the business - nice to see ones research validated
And nice to see they are addressing the issues, the market will view this in a positive light.
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16-10-2017, 10:28 AM
#952
Originally Posted by couta1
And nice to see they are addressing the issues, the market will view this in a positive light.
Considering the current SP this a very positive announcement. They have confirmed revenue will be higher than last year and NPAT at will be similar to first half. They've also stated that Sir John is not standing for re-election, a strategic review is taking place and the dividend will be similar to last year.
These are all things people were worried that they wouldn't do so I'm happy and will pick up some more today.
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16-10-2017, 10:28 AM
#953
I am a little intrigued that they need to hire external advisors to conduct a strategic review along similar lines to what FBU have done.
I find this quite perplexing. What is it about these companies in the construction sector that can't make hay while the sun is shining ?
You would think in the middle of a building boom both companies would be smashing the ball out of the park AKA Lance Cairnes style and yet they're ostensibly both admitting they don't have the answers to their own somewhat inept, (very inept in the case of FBU) financial performance and are hoping that external advisors will solve their problems.
Do I see this in a positive light ? Yes and No. Yes that they admit they need to strategically review their business to enhance shareholders returns and No that they don't have the wherewithal within their own organization to effect the changes necessary.
That said I am somewhat inclined to agree with JeremyALD's comment directly above but I still find it hard to have confidence in the company in the circumstances.
To be fair I see the reduction in capex as a good thing, confirmation on dividend payout as good for divvy hounds and I know some institutions and shareholders will be very pleased to see the Chairman not standing again as its quite obvious some fresh blood is required to take this company forward.
Wonder what the strategic review using specialist external advisors that looks at all aspects of their business and runs to March 2018 will cost ? How many millions ?
Maybe they should get the best specialist external advisor onto the board ?
Last edited by Beagle; 16-10-2017 at 10:46 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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16-10-2017, 10:42 AM
#954
Originally Posted by bull....
review under way , confirms to me from the research i undertook of the problems within the business - nice to see ones research validated
Yes, you knew and I knew but they didn’t
We knew about the external consultant to help sort out the running of the factory
Reading between the line the overall strategic review is just internal managers having a day or so locked away to go over the current strategic plan.
Surely that’s just part of the day to day running of the business and nothing startling in this news. Would have been done about now as part of the planning cycle anyway. Nothing much will come out of this except less enthusiastic promises about how good things are going to be.
Reduce capex by $5m will prop up the F18 divie ....good or bad. Wonder what bit of capex they have decided not to run with or have deferred .....less efficiency gains in future by not spending now?
And at least we know that flat is actually flat (for half year anyway). Flat does mean NZ is going backwards which is not good)
Pretty weak announcement in my view. Done to appease the market (with little substance) ....but the market is easy to please these days so will be seen as good .....even good news because it was not bad news.
Hope abounds here .....hope hope is not Metro’s new strategy
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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16-10-2017, 10:50 AM
#955
Originally Posted by JeremyALD
Considering the current SP this a very positive announcement. They have confirmed revenue will be higher than last year and NPAT at will be similar to first half. They've also stated that Sir John is not standing for re-election, a strategic review is taking place and the dividend will be similar to last year.
These are all things people were worried that they wouldn't do so I'm happy and will pick up some more today.
Don’t totally agree but the market will be pleased (sucked in?) and that’s all that matters
Share price 120 / 130 by end of month ...hope so
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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16-10-2017, 11:07 AM
#956
Originally Posted by winner69
Don’t totally agree but the market will be pleased (sucked in?) and that’s all that matters
Share price 120 / 130 by end of month ...hope so
Market underwhelmed at present, still can't break through 30 day MA at this stage.
Last edited by Beagle; 16-10-2017 at 11:08 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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16-10-2017, 11:09 AM
#957
Originally Posted by winner69
Don’t totally agree but the market will be pleased (sucked in?) and that’s all that matters
Share price 120 / 130 by end of month ...hope so
Hey winner, speaking of hope, I hope you have booked your Bryan Adams tickets for his upcoming tour in Jan18, a legend returns for the last time I'd say.
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16-10-2017, 11:16 AM
#958
Originally Posted by winner69
Yes, you knew and I knew but they didn’t
We knew about the external consultant to help sort out the running of the factory
Reading between the line the overall strategic review is just internal managers having a day or so locked away to go over the current strategic plan.
Surely that’s just part of the day to day running of the business and nothing startling in this news. Would have been done about now as part of the planning cycle anyway. Nothing much will come out of this except less enthusiastic promises about how good things are going to be.
Reduce capex by $5m will prop up the F18 divie ....good or bad. Wonder what bit of capex they have decided not to run with or have deferred .....less efficiency gains in future by not spending now?
And at least we know that flat is actually flat (for half year anyway). Flat does mean NZ is going backwards which is not good)
Pretty weak announcement in my view. Done to appease the market (with little substance) ....but the market is easy to please these days so will be seen as good .....even good news because it was not bad news.
Hope abounds here .....hope hope is not Metro’s new strategy
we could both do the job a lot cheaper than external advisors eh
one step ahead of the herd
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16-10-2017, 11:40 AM
#959
Originally Posted by Beagle
Market underwhelmed at present, still can't break through 30 day MA at this stage.
Probably too many open questions and issues:
- Confirmation that NZ NPAT is dropping (only Australian revenue helps them to keep it flat) is not good (though sort of expected).
- good that the chair does not want to stand anymore - but hasn't he just started a new 3 year term?
- the next plant refurbishment period is "ante portas". Last time this happened (a year ago) was quite margin depressing ...
I did some more thinking about the NZ building industry and there is in my view one other issue which is likely to longterm impact on their revenues and margins:
NZ houses are at current ridiculously expensive compared to buildings in other parts of the world. One of the reasons: Our houses are - despite looking all the same - hardly size standardised. Referring to windows this means that you can't buy them at Bunnings, but each window is basically differently sized and a one-off product. Same cr*p frame for each window, but each measure is different making them expensive to manufacture and keeping overseas competition to the detriment of the NZ consumer at bay.
I my view one of the main methods to reduce building costs in NZ (and at the same time increasing the quality) is to create a number of "standardised" building blocks which can then be cheaply and in large volumes manufactured. Windows are one of these components. As soon as they sell say 50% of all new windows in just 3 different sizes it is very easy to buy these windows cheap anywhere in the world.
If this happens, than MPG will inevitably lose market share to overseas competitors and on top of that will lose margin for the remaining product.
I am sure they will survive (still lots of replacement business - and room to reduce the margins), but I don't take it anymore for granted that they will soon return to their previous growth rates ... and I think a further margin reduction is more likely than not.
Look what difference a lost endowment effect can do to your thinking ... but on the other hand do I now probably suffer under confirmation bias - i.e. better DYOR;
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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16-10-2017, 11:43 AM
#960
Originally Posted by bull....
we could both do the job a lot cheaper than external advisors eh
Agree
No specific mention about external people doing the strategic review though (only for that operations bit)
But for goodness sake these types of reviews are done every year (or should be) ....maybe Metro been flying by the seats of their pants or something and hoping to ride a building boom.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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