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Briscoe Group BGP

Started by winner (n), Nov 03, 2022, 09:50 AM

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winner (n)

#30
Q4 sales were down 2.2% on last year

Trend in sales interesting

Heading back to the continuation of the pre-covid trend ,,,, seeing Rod not very bullish about F24

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Waltzing

#31
not too bad W().

that lower bound line still looks good..

DIV still ok then..

yep hes hedging his bets and then if inflation abates as the FED Chair has talked about yesterday he is setting himself up for under promise and over deliver or what ever its termed..

winner (n)

Briscoes sales about $800m and profit about $88m

WHS group sells 4 times as much as profit less than this

No wonder Rod always smiles when media/commentators bring up WHS

Waltzing

does it make the case that Bris is undervalued by the market...almost a no growth P/E

Basil

#34
Inflation running at over 7% for the year.
Market liked the announcement and closed up 12 cents at $4.75 on sales growth that trailed the rate of inflation for the year, (sales down in real inflation adjusted dollars) and it sounds like earnings may also be lower in real terms.

Closing price PE = 12.28 for a company that possibly isn't growing real earnings or sales.
Ben Graham reckoned a fair no growth PE is 8.5 when the risk free rate is 4.0%.

BGP doesn't have the wonderful expansion opportunities Glassons Au has so in my view at $4.75 its fully priced.

We never used to worry about inflation adjusting sales and earnings (for several decades now), when it was running at about an average annual rate of 2% but I think we have to be very careful with our thinking now because apparent sales and profit growth (and the multiple applicable) may no longer be appropriate in the current high inflationary environment if in real terms there is no growth.

If you start inflation adjusting WHS sales and expected eps and comparing them to last year...oh dear, that looks REALLY bad.

Waltzing

#35
But if they managed to do that well with what BOB i mean Rob describes as impacted... then maybe they will pull a rabbit out of the hat again... commentary was that they were impacted in 1 and 2 , plus they say effect of inflation staarted in 3 and 4..

In 2 years time? sure 24 might be a bit tough but going forward and inflation abates the underlying chart says steady but slow growth..

expected 175 basis point hit to margins.

https://www.stuff.co.nz/business/131140528/briscoe-expects-record-fullyear-profit-but-sees-tougher-times-ahead

sure FED likely to stay the course with amazing NON farm payrolls overnight.

Fully priced for now as expertly calculated by MR B.

What if they lift the DIV anyway and KMD increases DIV over the next 5 years.

Of course they may dump the KMD holding.. bet they wished they had LVMH.

winner (n)

Hope Glassons NZ sales over last 12 months have grown faster than inflation

Basil

#37
Found this really interesting.
Quote"Gross margin remains a focus for the Group and we are seeing increasing
pressure as the impacts of the economic downturn are felt. We continue to
see benefits from the initiatives the team are driving in order to optimise
and protect the significant gains (633 basis points) to gross profit made by
the Group during the preceding two years. We expect Group gross margin
percentage for the full year to close around 175 basis points below the gross
margin percentage of 45.76% achieved for last year."

Sales down for the year by 1.6% in real inflation adjusted terms and gross margin under real pressure.
A key question is how much of that extra 633 bps gross margin, (which is a HUGE increase over the covid period) will they be able to keep in the ordinary course of business going forward?

The way I see it is profit looks likely to be materially lower in the current year as its very unlikely they can maintain sales in real terms and margin compression down towards more normal levels looks highly likely.    Can't help wondering if Tammy is still the right person to be fronting their advertisements?
Maybe people are tired of their somewhat disingenuous "sales" they have every week or sometimes more often where product is allegedly heavily discounted but even after the so-called discount is still quite expensive relative to similar products at K Mart or similar.

It's hard to see how Briscoes can grow in the near to medium term with K Mart and Costco expanding.  Maybe a no growth PE of 8.5 is where this really should be?  eps of 38.67 cps x 8.5 = $3.29, Ouch!

Winner - I am confident the N.Z. operations of HLG have enjoyed a very strong first half as have Glassons Au.
Not long until the first half guidance announcement on or about 17th February 👍

Waltzing

"Hope Glassons NZ sales over last 12 months have grown faster than inflation"

no chance surely...

Winner graph for Brisc shows the impact and BOB commentary says it all...

im sure BRISC is busy round the table looking for the most cost saving ways and means to get stock here...

a lot of the stuff comes from china and MR B is correct to say margin will be under pressure.

still what if thet do INCREASE the DIV!!!  yes surely they wont but they might say lets give a little more back as in 2 to 3 years we can see the sun emerging from behind the clouds..

winner (n)

Seems retailers seeing a huge drop in real sales in January

From media: Payment service network Worldline NZ's chief sales officer Bruce Proffit indicated consumer spending at core retail merchants fell 0.7 percent last month

Basil

Wettest January since 1869!
Wettest 3 month period to the end of January EVER!
I think quite a few people were simply sheltering at home rather than going out to shops.

winner (n)

#41
Quote from: Basil on Feb 04, 2023, 12:06 PMWettest January since 1869!
Wettest 3 month period to the end of January EVER!
I think quite a few people were simply sheltering at home rather than going out to shops.

Yep, plenty of excuses for retailers to use these days

Unseasonable weather always a credible one

Better start taking ESG things real seriously

KW

Quote from: Basil on Feb 04, 2023, 12:06 PMWettest January since 1869!
Wettest 3 month period to the end of January EVER!
I think quite a few people were simply sheltering at home rather than going out to shops.

On the other hand, nothing else to do but online shopping  :o

I think that's the big downside of the Briscoes model - ridiculously expensive RRPs so they can do "50-60% off" sales every week.  If you are bored and shopping online, you end up comparing a full priced Briscoes item to one at Kogan or Kmart and you just laugh and buy elsewhere.  Thats a lost sale. 
Don't drink and buy shares in a downtrend, you bloody idiot.

Jay

Eftpos was down for a time today for some merchants - Briscoes, Rebel Sport and Kathmandu amongst others.
Only caught some of it on the news, but sounded like Auckland was for not too long, other parts of the country longer
Woulds be some lost sales!

Waltzing

Oh well rain prob ment on line was the way to go was that also effected.