WHS - Warehouse Group

[winner69]

Nick says more cost cutting needed - not always a good thing

Cost cotting to be both "strategic" and "tactical" - he sure uses the right buzz words that Nick

[Beagle]

I agree with you, I went to St Lukes on Sat and Sunday around Midday - there was a stack of carparks in one of the carparks - like maybe 1/5th empty - was quite weird as in previous times you can hardly get a park at St Lukes on any given weekend let alone the week before Xmas. - Seemed quite quiet - apart from Kmart - that place as packed to the rafters the checkout line went to the back of the store - they must be doing something right.

My kids tell me if you want cheap, K Mart is where its at. I heard them advertising on the radio this morning, open 24 hours in the lead up to Xmas for those last minute gifts. That's the sort of proactive retailer WHS are up against.
I think K mart also provide a reasonable shopping environment too, (apart from their awful self service checkout). The old red tin shed that is WHS is a very tired down-market shopping experience in my view, (acknowledge I am not the target demographic).

[BlackPeter]

My kids tell me if you want cheap, K Mart is where its at. I heard them advertising on the radio this morning, open 24 hours in the lead up to Xmas for those last minute gifts. That's the sort of proactive retailer WHS are up against.
I think K mart also provide a reasonable shopping environment too, (apart from their awful self service checkout). The old red tin shed that is WHS is a very tired down-market shopping experience in my view, (acknowledge I am not the target demographic).

Hmm - I guess your latest comment might be true for me as well. Still - my wife and I managed to get recently both into KMart and Warehouse and left KMart empty handed, while we found a lot surprisingly cheap but good quality household items (starter for a young couple) and baby articles in the Warehouse. They have as well lots of reasonable priced fragrances (following the nose of my wife - take care, TIL ...) and (at least for this country and in this time) a great sortiment of quality chocolates;

I don't think it is time to write off the red sheds ... but yes, there are things they need to work on:

my wife commented on the quite sad selection in women's clothing (too much sad looking and unstylish black stuff - and more jumpsuits than anything nice) - of course she didn't buy anything in this section. Maybe they need in this sector a purchasing manager with a bit better taste or style or both ...

mentioned before the blue sheds ...hard to understand why they don't think about ideas how to improve this quite unproductive asset

Get their finance division off the ground or ground it. Given most Kiwis preference to buy on credit do I find it hard to understand how it is possible not to make profit in this area.

[Biscuit]

I don't think it is time to write off the red sheds ... but yes, there are things they need to work on:

WHS does what it does quite well (it sells a wide range of variable quality stuff across the country at an honest price). They just have not found a way to grow once they hit saturation and their market is constantly being chipped away by competitors new and old (Trademe, Briscoes...etc etc). They are trapped and are going to stay trapped until takeover or oblivion.

[couta1]

WHS does what it does quite well (it sells a wide range of variable quality stuff across the country at an honest price). They just have not found a way to grow once they hit saturation and their market is constantly being chipped away by competitors new and old (Trademe, Briscoes...etc etc). They are trapped and are going to stay trapped until takeover or oblivion.

They will still be grinding out reasonable divvys 10 yrs from now even if the share price does bugger all.Disc-Hold

[Biscuit]

They will still be grinding out reasonable divvys 10 yrs from now even if the share price does bugger all.Disc-Hold

I don't hold. I bought some years ago and eventually sold out. I think the dividend pretty much covered the loss of capital from share price fall. I sold when I no longer believed they had a credible strategy to stop the backwards momentum. But I have not followed them for a while now and just have residual skepticism. It would be nice if management were realistic with shareholders about their strategy and prospects.

[Beagle]

WHS does what it does quite well (it sells a wide range of variable quality stuff across the country at an honest price). They just have not found a way to grow once they hit saturation and their market is constantly being chipped away by competitors new and old (Trademe, Briscoes...etc etc). They are trapped and are going to stay trapped until takeover or oblivion.

I think that sums the situation up pretty well. The encroachment on the Warehouse's patch is relentless from many sides and is a systemic issue that's not going to go away, while at the same time their brand, format and overall concept looks tired and drab. Any way you slice and dice this thing its a very mature and very tired brand with limited, (if any) growth prospects.
If one is investing for the dividends there are far better choices.

[winner69]

Quite disappointing and wondering whether this might be a sign to come for other retailers? Good revenue, lower margins ...; Anyway - would still result in an EPS of 20 cents for the full year - i.e. should not impact on the dividend (unless there is more to come);

On an adjusted npat basis that WHS uses if full year is down 15% then eps will be 16 cents

Hoe they havea few decent property sales coming up to fund that dividend

At least the write down of the financial services part will be 'non cash'

[Beagle]

One of the key issues faced by all credit providers is the availability of the no asset procedure for unsecured debts up to $47,000. A simple one-off twelve month process that is considerably less odious than a full three year bankruptcy. I would think the Warehouse, (chasing their demographic), will find that they experience more than their fair share of losses through this procedure.
https://www.insolvency.govt.nz/perso...et-procedures/

[BlackPeter]

WHS does what it does quite well (it sells a wide range of variable quality stuff across the country at an honest price). They just have not found a way to grow once they hit saturation and their market is constantly being chipped away by competitors new and old (Trademe, Briscoes...etc etc). They are trapped and are going to stay trapped until takeover or oblivion.

CAGR (2009 - 2016) 7.5% p.a.; Forward CAGR (based on analyst consensus) 7.3%;

I hear what you are saying (just looking at the red sheds), but the numbers for the warehouse empire definitely show growth ...