Briscoe Group BGP

[Basil]

"It just looks super expensive versus where it has historically traded."

I couldn't agree more but would add on a relative basis to TRA and HLG who are both growing earnings nicely it looks ridiculously expensive..

[winner (n)]

I couldn't agree more but would add on a relative basis to TRA and HLG who are both growing earnings nicely it looks ridiculously expensive..

FY19 Briscoes sales $632m NPAT $63.4m Profit Margin 10.0% and share price fraction under $4.00

FY26 my forecast sales $800m NPAT $60.0m Profit Margin 7.5% and share price now about $6.00

So in 7 years sales UP 26% but NPAT DOWN 5% .....Profit Margin down from 10.0% to 7.5% questions what you up to Rod

But BGP been re-rated heaps and share holders happy

Where to from here is anybody's guess

[Basil]

No growth in profit in 7 years is very poor and means in real inflation adjusted terms net profit is down ~ 30%.  In my investment rule book no growth companies are worth no more than a PE of 8.5

[winner (n)]

No growth in profit in 7 years is very poor and means in real inflation adjusted terms net profit is down ~ 30%.  In my investment rule book no growth companies are worth no more than a PE of 8.5

Sales growth last 7 years has been 3.5% pa

Even allowing for the ups and downs of the pandemic I think that's a pretty normal growth rate ....going forward probably about 3.0% pa/3.5% pa is all one can expect in a mature market

No wonder Rod focuses so much on gross margin

[winner (n)]

How Briscoes sales have gone from 2017 is a fascinating picture

Back on trend .... but methinks the future isn't as bright as the past as they facing msre facing some of the challenges that the likes of the Red Sheds are

We'll see what happens eh

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[Ferg]

How Briscoes sales have gone from 2017 is a fascinating picture

Back on trend .... but methinks the future isn't as bright as the past as they facing msre facing some of the challenges that the likes of the Red Sheds are

We'll see what happens eh

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Wrong image?

[winner (n)]

Wrong image?

Ta ....fixed it

[Waltzing]

If the Dixie lowers which  Jeffrey Gundlach of DL Capital says this morning is headed a lot lower NZ dollar and UAS could benefit and purchasing power slowly rebuild... that could help all sectors of the economy...

[Basil]

Briscoe Group Limited (NZX/ASX code: BGP)

Highlights for the 26-week period – 27 January 2025 to 27 July 2025:
• Sales of $371.27 million, 99.8% of last year
• Improved sales trend: Q2 growth +2.07% vs Q1 -2.58%
• Online sales as mix of total Group sales 19.36%, (LY 18.77%)
• Online sales growth +2.92% vs last year
• Total Inventory $105.98 million (LY 106.32 million)
• $14.85 million capital investment, including $10.37 million for the new distribution centre project
• New distribution project progressing on time and within budget
• NPAT $29.31 million

Note, NPAT is the last item mentioned AND they don't post the comparable profit last year so that should immediately put you on alert.
Last year it was a normalised figure of $40.584 million, itself down -5.07% on FY23 but this year interim profit is down a whopping 28% on FY24 !
EPS down considerably and now only 13.15 cps.
Not sure why this trades on a PE of 20 with declining profit  and little in the way of readily apparent growth opportunities going forward but each to their own way of investing.  For mine, this result is a shocker and shows how incredibly tough the retail environment is.  Makes the consistent profit growth of HLG and TRA, in such an incredibly weak economy, (which both trade on far more attractive metrics), all the more remarkable. 

[winner (n)]

Interesting chart in presentation

Sort of proves the theory thst greedy retailers caused the high inflation of a few years ago ...and now bemoan the consequences of that greed with consumers not spending less.

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[Basil]

Great image Winner.  Its appears to me Briscoes made great profits from people nesting at home and cooking up a storm during Covid and now its a very different story.  They did well in FY22 and FY23 with EPS of 39 and 40 cents respectively but its been all downhill since then, probably mid 20's this year which is less than FY18 and more than 30% lower than 8 years ago in real inflation adjusted terms.  I can't see how they're going to get back to doing decent earnings ?
Its being priced like a company with excellent growth prospects and yet earnings over time are going backwards at a fair rate of knots in real terms.

[winner (n)]

So $60m profit this year ...about the same as 2018/2019/2020

I feel they could struggle to maintai profit about $60m. Plenty of new challenges coming up.

May we've had Peak Rod

[Basil]

He's had an extraordinary run but he's definitely in the twilight of his career now.

[Left Field]

Maybe peak Rod is right.

I took advantage of Briscoe's Father day specials to shop for a toaster.  Briscoe's cheapest was a $100 (ie 30%  below their normal retail) and it was a v cheap looking plastic model.

Wandered round to K-Mart, they had a smart Stainless Steel version for $50 (well $49.99 to be exact,)  and this was their usual retail price.

I suspect K - Mart's everyday low prices (and good quality) plus no big need for huge advertising spend, makes it hard for Rod and more profitable for K-Mart.

ps check out how K-Mart's Anko brand has become so successful ....Over $US 3 Billion in sales in 23/24.....  https://ankoglobal.com

[Basil]

I find the same.  K Mart consistently half to two thirds of Briscoes prices on their so called "special" pricing.  People sick of being played for a fool ?