WHS - Warehouse Group

[0verdose]

Nick took a pay cut this year and only got $3.224m

That's 57 times what the median employee rem was

Some might say the group got more value out of a 'median' employee on $56k than Nick

Really should have got rid of him years ago, his ideas are just egotistical self indulgence at this stage.

[Minimoke]

Not helped by the charity Sanitarium not selling them weetbix. This is going to be a good test for the new Supermarket regulator.

[winner (n)]

Basil ....$3.4 billion sales and generated no cash

Recast cash flow statement to show where it came and went it looks like this .....last years divies paid by selling a building it seems

Whatever worst thing is that on a day to day basis WHS didn't generate any free cash flow (negative $3m)

Anyway look at this ...excuse the formatting

Reported Operating Cash Flow $214m
Less lease/Rent payments. -$101m
Adjusted Operating Cash Flow $113m

Less Capex. -$116m

Gives Free Cash Flow $-$3m

Less Dividends paid. -$35m

Total Cash consumed. -$38m

Funded by sale of property $31m and $10m debt (with a little extra in petty cash tin)

[Basil]

Nick took a pay cut this year and only got $3.224m

That's 57 times what the median employee rem was

Some might say the group got more value out of a 'median' employee on $56k than Nick

I lay the blame squarely at the weak board with people like Joan, clearly well past it and due for retirement and without any vision of how to restore shareholder returns.  As usual WHS management and the board try and mask their pitiful performance behind a range of ESG initiatives to try and disguise their truly pathetic performance.  Thye should never have renewed his contract and it's a real embarrassment to the board that Nick takes home more than 10% of company profit given his appalling performance.  With this board and management its uninvestable unless you have a death wish for your capital.

[lorraina]

Love Craigs' headline on their WHS research......Torpedoed.....lol.

[Hectorplains]

Not helped by the charity Sanitarium not selling them weetbix. This is going to be a good test for the new Supermarket regulator.

Sanitarium's charity tax status riles me but that's beside the point.  They have kept their powder dry in providing little comment to Nick's public ravings; the timing of which has provided a nice distraction from WHS dire full year result (probably just a coincidence that, eh.)

The alternative argument might well be that Warehouse did not have sufficiently robust supply contracts in place.  They are the 'Johnny Come Lately' to this party (2021), I'd be putting my eggs (or Weetbix) in the basket of my long term retailers too. Afterall, Warehouse's grocery initiative has come and gone once already. 

Nick's time might be better spent on crunching some numbers.  Grocery is now nearly 20% of Warehouse sales. It's a notoriously low margin game and the Warehouse's pitch is that they're the cheapest. Just maybe this 'strategy' is driving the growing revenue but not profit quandary? Nick's case for grocery is always expressed about it being for the public good.  The public good is not always good for business.  Put it this way, I don't expect Kmart will be selling grocery anytime soon.

[Sideshow Bob]

Good PR for WHS though - never shopped for groceries there but $1/pack cheaper than PNS and $3/pack cheaper than NW and now people know it.

WHS might have work out that people come in for $X in milk/butter/sh1tbix and other groceries, but also then spend $Y in other WHS junk.....

[Basil]

Sanitarium's charity tax status riles me but that's beside the point.  They have kept their powder dry in providing little comment to Nick's public ravings; the timing of which has provided a nice distraction from WHS dire full year result (probably just a coincidence that, eh.)

The alternative argument might well be that Warehouse did not have sufficiently robust supply contracts in place.  They are the 'Johnny Come Lately' to this party (2021), I'd be putting my eggs (or Weetbix) in the basket of my long term retailers too. Afterall, Warehouse's grocery initiative has come and gone once already. 

Nick's time might be better spent on crunching some numbers.  Grocery is now nearly 20% of Warehouse sales. It's a notoriously low margin game and the Warehouse's pitch is that they're the cheapest. Just maybe this 'strategy' is driving the growing revenue but not profit quandary? Nick's case for grocery is always expressed about it being for the public good.  The public good is not always good for business.  Put it this way, I don't expect Kmart will be selling grocery anytime soon.

Great post mate, I'm enjoying your regular contributions on here. 
As you'll know Charitable Trusts are established with a Trust deed which sets out the purposes of the entity and those could be many and varied but given we're talking about stopping supply to the retailer who sells this staple at the cheapest price isn't there at least a moral obligation to keep supplying the little guy in the interests of the benefit of the general public?  Doesn't seem very "charitable" to allow the incumbent duopoly to continue to price gouge kiwi consumers for such a basic staple.  Weetbix are dry tasteless rubbish if you ask me but that's beside the point.

Agree 100% that this little storm in a teacup has interesting timing and looks rather contrived.

[Hectorplains]

Great post mate, I'm enjoying your regular contributions on here. 
As you'll know Charitable Trusts are established with a Trust deed which sets out the purposes of the entity and those could be many and varied but given we're talking about stopping supply to the retailer who sells this staple at the cheapest price isn't there at least a moral obligation to keep supplying the little guy in the interests of the benefit of the general public?  Doesn't seem very "charitable" to allow the incumbent duopoly to continue to price gouge kiwi consumers for such a basic staple.  Weetbix are dry tasteless rubbish if you ask me but that's beside the point.

Agree 100% that this little storm in a teacup has interesting timing and looks rather contrived.

Thank you!  True... althou history repeatedly and depressingly shows us that organised religion and moral obligation are often not good bedfellows. More preached than practiced, eh.

[Minimoke]

I lay the blame squarely at the weak board with people like Joan, clearly well past it and due for retirement and without any vision of how to restore shareholder returns.  As usual WHS management and the board try and mask their pitiful performance behind a range of ESG initiatives to try and disguise their truly pathetic performance.  Thye should never have renewed his contract and it's a real embarrassment to the board that Nick takes home more than 10% of company profit given his appalling performance.  With this board and management its uninvestable unless you have a death wish for your capital.

I lost pretty much total interest in the Warehouse when they decided to go down the Living Wage route in 2019. Well done that union. Around 600 redundancies a year later. Gee. What a surprise.

Thought I might try to make a positive contribution to this thread. But honesty only got to page 3 and I get the Gender Equality stats, the 100% Coal Burner Fleet and $4m raised for the community.

Well done to the warehouse. Raising all that cash, tax free for the community. And then I look at net profit $30m. Seriously - they would be better off in the charity game.

[Hectorplains]

Seriously - they would be better off in the charity game.

Hmmm, maybe Sanitarium could buy them out?   If it's at a premium that'd be an act of charity towards holders. 

[BlackPeter]

Hmmm, maybe Sanitarium could buy them out?   If it's at a premium that'd be an act of charity towards holders. 

Might not be necessary to succumb to the bad ones - Nick would make a great Bishop - just look at the other self appointed guy.

The warehouse could turn into a charity like Sanitarium ... and than they could get their respective lords to sort this issue out. That's the way humanity resolved its conflicts for millenia, didn't we?

[Jay]

Good PR for WHS though - never shopped for groceries there but $1/pack cheaper than PNS and $3/pack cheaper than NW and now people know it.

WHS might have work out that people come in for $X in milk/butter/sh1tbix and other groceries, but also then spend $Y in other WHS junk.....

Pretty sure that is their plan/hope and maybe it has worked, with increase in sales as mentioned above

[winner (n)]

So groceries 18.7% of Red Shed sales and grocery sales up 26.1% on pcp

Says grocery sales grew from $280m to $353 in F23 (and accounted for 44% of the Red Sheds sales growth)

Grocery dept surely is 'going from strength to strength'

[winner (n)]

There's a slide head up THE ROADMAP TO NET ZERO


hope that's not the profit guidance