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  1. #31
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    Quote Originally Posted by COLIN View Post
    Hey - but they've just said that there was "significant margin improvement!"
    Oh, missed that. So far the report season started with a good note, hopefully more positive reports coming out and turn the market sentiment a bit. After all, this should be a recovery year.

  2. #32
    percy
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    Retail is very difficult at present.Appears someone forgot to tell Rod Duke .
    This an outstanding result.

  3. #33
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    Quote Originally Posted by percy View Post
    Retail is very difficult at present.Appears someone forgot to tell Rod Duke .
    This an outstanding result.

    Thats becuase is one of few retailers in NZ .... retailing is in his blood ... he has a canny sense of knowing what punters want and how to make a buck out of them .... that to a large extend is an art .... more so than a science ... it comes naturally to him .... he is a rare breed and doesn't get the recognition he deserves

  4. #34
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    I have just posted this on the WHS thread, but it seems relevant to include it here!


    Rod Duke continues to prove himself to be one of the countries most capable retailers.

    In my opinion Stephen Tindall used to be one of the countries most capable retailers.

    I'm not sure about the current Warehouse management or strategy. They have gone a little more upmarket in terms of layout, quality and prices and don't have the constant sales that used to appeal to a lot of people (or was it just me?)

    I'm not sure any of these things suit the Warehouse brand that was created over a couple of decades? It seems they have tried to become a bit of a 'me too' (like Dick Smiths have just done) shop and have perhaps lost some of their appeal because of that?

    Over the past few years I have found myself buying very little from the Warehouse. Briscoes sells better quality gear (in my opinion) for not much more (when it is on sale). If I want CDs and DVDs which I used to buy at the Warehouse I now go to JB HiFi as they have a much better range and are generally cheaper.

  5. #35
    percy
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    emerg.
    good post. my wife comes home with nice stuff from briscoes.

  6. #36
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    Second qtr results out and more evidence of tight retail conditions, with quarter down on same time last year, particularly in homewares (sporting goods up - lots of soccer balls I imagine). However, BGR continues to hold its own:

    "Despite the tough operating conditions, Group EBIT has tracked ahead of last year for both quarters and we expect our results for the half year to show Group EBIT ahead of last year by around 30%
    From that, I guess first half profit looks to be around $8.7m, up from prior year of $6.5m. If they can hold steady second-half through the crucial Christmas period, then probably looking at a FY of about $23.5m, or forward P/E a little under 11 at current price of $1.19. Since they're not short on cash, holding or increasing the div is no problem which should put a floor under the price at some point.

  7. #37
    percy
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    Quote Originally Posted by Lizard View Post
    Second qtr results out and more evidence of tight retail conditions, with quarter down on same time last year, particularly in homewares (sporting goods up - lots of soccer balls I imagine). However, BGR continues to hold its own:



    From that, I guess first half profit looks to be around $8.7m, up from prior year of $6.5m. If they can hold steady second-half through the crucial Christmas period, then probably looking at a FY of about $23.5m, or forward P/E a little under 11 at current price of $1.19. Since they're not short on cash, holding or increasing the div is no problem which should put a floor under the price at some point.
    Lizard as allways it looks as though you are right on the money with this extremely well run retailer.

  8. #38
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    Liz - Duke indicated that the 1H NPAT result will be similar to last year's $6.5m, after taking into account the extra $2.6m tax adjustment.

    But I agree that the FY11 NPAT result should be slightly up on last year due to the $1.9m write-down of the Living & Giving stores last year that shouldn't be repeated this year (barring any further deterioration of retail conditions).

    Assuming full year forecasts of $23m NPAT ($21m last year) and $45.7m EBITDA ($38.8m last year but Duke indicated 1H EBIT is up 30% on pcp) and net cash position steady at $59m, BGR's fundamentals look like this:

    Current Market cap = $1.19 x 212.15m shares = $252m
    EPS = $23m / 212.15m shares = 0.108
    PE = $1.19 / 0.108 = 11.0x
    EV/EBITDA = ($252m - $59m) / $45.7m = 4.2x
    Gross divi yield = 7.1c / 119 / 70% = 8.5%

    I value BGR at between $1.30 - $1.40 using:
    PE multiple of 12x = 0.108 x 12 = $1.30
    EV/EBITDA multiple of 5.5x = (5.5 x $45.7m + $59m) / 212.15m shares = $1.47
    DCF of free CFs at 11.5% discount rate = $1.42

    The trouble with BGR (and OIC) is that it needs to find a better place for its cash. Either find a decent acquisition or return the $59m (28cps) to the shareholders.
    Last edited by Catalyst; 06-08-2010 at 12:45 PM.

  9. #39
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    The 3rd quarter sales figures were surprisingly good with an increase on pcp of 6.5% - although seems they tailed off in early October after the gst increase. And the outlook statement is rather on the cautious side, so would guess a bit of pressure on margins, despite favourable forex.

    Assuming an unexceptional Christmas period, I would think heading for about $23.8 - $24.1m NPAT for FY11 (excluding effect of extra $2.6m tax).

    Valuation about $1.50, so nothing too exciting, but a steady longer term hold for now.

  10. #40
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    Quote Originally Posted by Lizard View Post
    Valuation about $1.50, so nothing too exciting, but a steady longer term hold for now.
    A steady longer-term hold providing a gross yield of around 8% - not bad in an income-producing portfolio.

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