Research archive for WHL

Woolworths have reported numbers for the 52 weeks to end 29 June 2014. This is compared to the 53 week prior financial year, retailers just report that way! Sales increased on a comparable basis (the extra week is a benefit of 2 percent unsurprisingly) by 14.4 percent, adjusted profits before tax increased 20.1 percent. HEPS increased by 9 percent to 365.2 cents per share, strip out the transaction costs of 182 million Rand (David Jones and Country Road, as well as a currency loss of 139 million Rand) and adjusted HEPS (or aHEPS as they call it in the release) grew 17 percent to 398 cents per share.

A couple of interesting company announcements this morning, firstly from Woolworths in which the Australian Foreign Investment Review Board have okayed their takeover offer for the rest of Country Road that they did not own. Woolies owned (as per the release) on the 23 of July after market, 87.92 percent of Country Road. Who are these shareholders who are going to get bumped out? Long suffering it seems. I have to share this, from the annual report:

Woolworths have released a 52 week trading statement this morning, for the 52 weeks to end 29 June 2014. As a result of retailers measuring their business from week to week, sometimes you compare to a "53 week year" if you get my drift. For the purposes of comparing, Woolworths use both a 52 and 53 week comparison, because the prior financial year.

Woolies news, David Jones' shareholders have voted overwhelmingly for the South African company to buy them out, check out the release from down under: David Jones Shareholders Vote in Favour of Scheme of Arrangement. 96.81% percent of the shares in issue voted in favour of the deal, but only 89.64% percent of the holders voted in favour. Meaning that whilst the people that had most of the shares voted in favour, many private individuals probably thought this was a bad idea.

This morning Woolies announced that they have made an offer for the outstanding 12% of Country Road, which is listed in Australia. The offer is at a premium of 21.4% to yesterday's closing price, will value the offer at A$213 million, which based on today's Aussie Dollar of R9.99 (let's call it R10) is R2.13 billion.

On the local front we had the Woolworths shareholders suggesting that the South African shareholder base had given the board and company the necessary authority to proceed with the David Jones acquisition down under. Overwhelmingly, although not all resolutions, number 4 only got 97 percent, whereas the other resolutions gained in excess of 99 percent of the votes. I tried to look on the Woolies website under investor relations for the specific circular, but alas, it was not there to be found.

Woolworths have announced this morning that the David Jones board plan to give themselves and their shareholders a couple more weeks to decide, the meeting will now take place on the 14th of July. Why? Well, actually it is more about Australian regulators being sensible. "The Federal Court of Australia has granted this postponement to allow sufficient time for the David Jones Board to assess the implications of entities associated with Solomon Lew holding 9.89% of David Jones shares."

Today we received a detailed update from Woolworths with regards to the David Jones acquisition. I'll break it up into 3 important parts namely rationale, funding and progress update.

But today, it is all about this. And wow, this is huge! Woolworths are looking to buy Australian retailer David Jones. Davey Jones and their locker, lock stock and barrel. The price tag? 4 Aussie Dollars a share or around 2.1 billion Aussie Dollars, which translates to 21.4 billion ZAR, as per the release -> Proposed Acquisition by Woolworths Holdings Limited of David Jones Limited and Cautionary announcement.

Woolworths, one of our preferred retailers, reported numbers for the 26 weeks to end 29 December 2013. This is the first half of their financial year. Byron said that I stole his thunder because he wanted to write up about these numbers, so I had better make sure that I do a fine job, or else...

Woolies 88 percent owned subsidiary, Country Road in Australia reported numbers yesterday. I looked a Google Finance for a share price graph, as you can imagine with 88 percent of the shares in the hands of Woolworths, the stock is completely illiquid. Over the last five days, including a whopping 44 percent move higher today, the stock is 62 percent higher. What!!! At a market cap of 725 million Aussie Dollars, at roughly 10 Rand to the Aussie, this company is worth 7.25 billion Rand. Or 6.38 billion Rand is the value of Woolies holding in Country Road. Or around 12.4 percent of Woolies, which has a market capitalisation of just shy of 51.5 billion Rand. But that is wild, a move northwards of that amount, Country Road!!!

Woolworths is a lot more specialised and targets clients who have more disposable income. Here is what their update had to say.

OK, then there was Woolies out with a trading update yesterday, for the first 20 weeks of the 2014 financial year. Mr. Market must have liked it, the stock went up 3.8 percent. Wow, that is a serious move higher. Clothing sales locally grew 11 percent, retail space expanded 4.6 percent. Food sales grew a whopping 16.7 percent, general merchandise grew by 5.5 percent. Their financial services book grew by 15.4 percent year over year, whilst the impairment rate increased to 5 percent, from 3 percent this time last year. All folks under a little pressure seemingly.

Woolworths have released results for the full year to end June this morning. These are for the 53 weeks to end the 30th of June 2013. We wrote about the trading update when it was released around 40 days ago. That seems like quite a while back. Expectations for HEPS back then were expected to be 25 to 30 percent better, it was almost exactly in the middle of the range, the reported number is 27.3 higher than the prior year at 340.4 cents per share. Dividends, oh don't we know how important those are, for the second half of the year those have clocked 148 cents, or 125.8 cents after the 15 percent dividend tax. For the full year, including the 86 cents, or 73.1 cents post tax at the half year stage, the total dividend is 234 cents pre tax, or 198.9 cents post tax. The company has a very generous dividend cover of 1.45 times!

Expensive. And then not so much anymore. Sometimes (almost always) you have to pay up for earnings, provided of course that they are quality in nature. There are some share prices that look perpetually expensive, but they always seem to deliver the earnings to back the share price appreciation. Woolworths is one such company.