Crawshaw Share Discussion Threads

[lozler] 24/2/2015 18:29

2nd highest volume in a year today with that positive statement. Really excited about the 200 stores expansion, should be a nice long term hold :-)

[dragonsteeth] 24/2/2015 17:14

A nice steady climb throughout the day. This article is from IIeye, I'm never sure if it will pass advfn's watchful eyes, mainly cutn and paste of RNS but a few interesting comments including a Buy rating , 70 p target from WH Ireland..

[...]

nope thought not here's some extracts from the article :

CRAW) chain of butchers shops are doing brisk business. After increasing 11% last year, like-for-like sales jumped by a further 5% in the year to January. Full-year results are expected to be much better than expected, too.
Last month we were told that cash margin had increased year-on-year. Now, despite heavy investment, Crawshaw reckons the out-turn for the full year to end January 2015 will be "materially higher than the current market forecast."

A lot more will be spent this year, too, expanding from the modest portfolio of 22 stores to over 200 in the next eight years. That sounds ambitious, but incoming CEO Noel Collett was certainly convinced enough to join the £36 million Rotherham-based firm from Lidl where he was chief operating officer for the discounter's UK business. He starts on 1 March.

Collett spent 16 years at Lidl and oversaw a tripling of the store base to 600, so clearly knows how to grow a business sensibly.

"Our average spend continues to increase reflecting the excellent quality and value we offer," said Crawshaw chairman Richard Rose. "All our stores are profitable and we are excited about the planned shop openings in the near future plus the arrival of our new CEO in the next week."

Broker WH Ireland is also bullish on the rollout over the next few years. True, investing over £1 million in infrastructure to support expansion makes for some ugly near-term cash-adjusted price/earnings multiples - 62 for 2016 - the valuation does drop in the year ending January 2017 to 28.5 as earnings take off.

A full-year 2017 enterprise value-to-revenue multiple of 1 times reflects "the significant potential of the roll out over the next few years," says WH Ireland, which has a 'buy' rating on the stock and 70p price target.

[rugby] 24/2/2015 11:32

mm pulled online quotes to buy, could move up very soon.

[davidosh] 24/2/2015 11:12

Just to reiterate IMO....The placing last year brought in £8m and the store group is very cash generative so we could see 30 stores opened in one year and still not run out of cash...I think that will cover at least two years growth from here and that would be at quite some pace. This is an eight year plan so of course more money may be needed but it would only be if hugely successful in the rollout over next three years and at a much higher share price than last time.

[m.t.glass] 24/2/2015 11:00

I've bought in again, via a June sbet.

[rugby] 24/2/2015 10:34

yes Davidosh, the places where Crawshaw are most popular and profitable are the low cost rental dour northern working class towns with hundreds of empty shops.
Set up costs and lease are low.
I don't envisage fundraising until late 2016.

[davidosh] 24/2/2015 10:30

There is absolutely no need for a further placing as the large fundraise last year was in readiness for the rollout to cover at least the first three years and this business is very cash generative.

Most new stores with the low cost entry leases and fit outs pay for themselves within 18 months of opening. The north of England still has vacant stores on high streets and market areas which allows easy picking for a quality tenant that will attract footfall.

Do not forget that there were two new stores last year and the new factory store trading well and that like for likes in January 2014 may have been exceptionally strong to compare against. Like for likes on monthly periods can fluctuate.

The important message here is all positive. New stores opening soon, new CEO next week, recently opened outlets doing well, like for likes 5% positive (how many supermarkets would die for that?), and most importantly margins and customer spend is actually increasing.

As Gengulphus pointed out...small increases in margin can make for much bigger increases to the bottom line especially as sales grow and total sales for the year including new stores and the factory outlet will be getting close to £25m now. Every new store should add £1.25m or so in sales over a full year too so hopefully early openings in 2015 and our Lidl ray of sunshine will work wonders for the current year figures even if like for likes stay single digit which is quite reasonable IMO

[rugby] 24/2/2015 10:26

obviously for a high growth company with large expansion ambitions fundraising will arrive down the road. However i very much doubt that fundraising will occur until the immediate planed moved south into the midlands or moreover the 8.2 million cash is fully utilised . The stores cost circa 250k each to set up and i would suggest that the company has enough cash already for 2015/16 growth objectives.
The discrepancy in the two previous statements i believe are down to margin, in a local paper (for crawshaw)'Rotherham Business news' Mr Rose talked of "gross margin higher than our first half performance." it seems higher actually means higher than most already thought higher ment!

[shanklin] 24/2/2015 10:16

I'm out of CRAW for now. Very disappointed by the lack of progress over the last six months and even more so by the cold- and hot- style of the last two TSs. Hope to return once I trust management to give an impartial presentation of their trading.

[playful] 24/2/2015 10:08

Great to see our website gaining some traction:

hxxp://www.hotukdeals.com/deals/chicken-breast-5kg-for-20-also-offer-website-for-4-free-saving-stamps-crawshaw-butchers-2124702

They really could build the brand very easily through the website special deal promotions.

[m.t.glass] 24/2/2015 10:06

I wouldn't rule out a possible placing - once the new man has had a chance to complete his own adjustments to the existing expansion plan - which could be a month or more away. Perfectly reasonable for the company to do so if the previously indicated rollout rate is being revised. The expansion plan referred to at last July's placing was an 8-year one - so not as overly ambitious as market appeared to fear in its reactions in subsequent months.

Discrepancy between January update and latest update I presume might be
thanks to new man's own assessment differing from that of predecessor?

[celeritas] 24/2/2015 09:50

It doesn't mean another one isn't close. I suppose it depends on how fast craw wants to grow.

[rugby] 24/2/2015 09:39

placing occurred last July to fund existing/immediate growth plans.

[celeritas] 24/2/2015 09:37

Been looking at these for a while, anyone think a placing is coming to fund ramping up expansion. The 2 trading updates are a little at odds with each other, just thinking outside the box really as I've seen plenty of stocks talked up for a better placing price.

[rugby] 24/2/2015 09:36

whilst on a recent trip i had the opportunity to pass junction 1 of the M18, the site of the Hellaby Factory store. Overall i was very impressed by the facility and it was incredibly busy.
I did however note the factory outlet pricing was somewhat similar to the normal store prices and the only downside was the member of staff acting as security on the door. Whan i asked if shoplifting was a major issue i was informed the outlet had been suffering from Romanians stealing meat from the outlet.
However the security on the door seemed to be addressing that issue.
Overall very positive indeed.

[m.t.glass] 24/2/2015 09:11

geng - thanks for yor post 3193 -

"..Possibly "expectations" in the January trading statement referred to "management expectations" earlier in it, which is not necessarily the same thing as "current market forecast" - one is what the management expects, the other what the market expects.."


I agree, that difference (between whose expectations are being referred to) is a point often missed, on many stocks, by many casual observers. Whenever there is even the slightest difference in the phrasing it is always worth querying. And as you point out, market expectations themselves will always have altered after each recent update ;o)

[salpara111] 24/2/2015 08:38

Difficult TS to analyse due to the issues already mentioned above.
I imagine that if they had issued a figure for LFL sales for the last 8 weeks it would have been negative again and that has to be of concern.
I am also confused as to how they go from an "In Line" forecast to "Materially Ahead" ....there are many unanswered questions but I guess it should at least draw a line under the recent share price weakness but I am not entirely sure that it is enough to get things moving back up to 50p again.

[ramas] 24/2/2015 08:37

Chairmans foray into Quindell makes me look at everything CRAW with some suspicion these days

[shanklin] 24/2/2015 08:03

Gengulphus

It could be any mix of your suggestions or they may just like having an overly-light forecast in the market. Any explanation for the divergence of two TSs just over a month apart would certainly be appropriate. As it is, I feel seriously misled.

All IMHO.

[gengulphus] 24/2/2015 07:57

They must have seen very strong sales in the final weeks to move guidance from inline, unless someone got their sums wrong.

I don't think it's general sales levels - the January trading statement said "Year to date like for like sales are up 6%"; this one says "Like for like sales for our financial year ending January, 2015 were up 5%". So the final month or so has reduced the rise in like-for-like sales, suggesting that like-for-like sales levels in that month weren't up by much on a year before - indeed, quite possibly a bit down on a year before, as the like-for-like sales in the preceding two months had been according to the January trading statement:

"Trading for the 9 weeks to 28(th) December was in line with management expectations. Like for like sales for the period were down 3%, but the Company had budgeted for this small decrease given that sales for the comparable period last year were particularly strong, rising by 21%."

That leaves the question of why the full-year guidance changed from "We anticipate that the Company's full year profit and cash generation will be in line with expectations" in January to "... we now expect the out turn for the full year to end January 2015 to be materially higher than the current market forecast" now. I don't know, but the following strike me as possibilities:

* New shops expanding their trading well - which won't show through in like-for-like figures.

* Further improvements to margins - even quite small improvements can have a significant effect on profit levels.

* Timing of payments associated with "investment in our growth plan" - they will probably be lumpy, and if a payment expected to be made in January has been delayed, that could affect the figures expected for the year.

* Possibly the figures for the January trading statement were close to the boundary between "in line" and "materially ahead" but just below it, in which case that statement would say "in line" but it would only take a small increase to promote it to "materially ahead" now.

* Possibly "expectations" in the January trading statement referred to "management expectations" earlier in it, which is not necessarily the same thing as "current market forecast" - one is what the management expects, the other what the market expects.

* Or possibly the "current market forecast" has dropped as a result of the January trading statement, in which case "expectations" in that statement could mean the same thing as "current market forecast" and little-changed management expectations could have been in line with the current market forecast then and materially ahead of it now?

Can't say I'm all that bothered about the exact explanation - it's pretty clear from this trading statement that things are going fine and that's what really matters!

Gengulphus

[shanklin] 24/2/2015 07:55

IMHO LFLs are greatly helped by opening new stores as their sales may take a while to ramp up to the full potential, meaning there are strong yoy comparisons early in Yr 2 of them being open.

[drsmessguide] 24/2/2015 07:49

It is likely to be difficult to beat lfl sales going forwards imo given the rapid ramp up last year. The growth story is in rolling out 200 stores from the current 23!

[playful] 24/2/2015 07:30

You make a good point and I'll raise this at our AGM. It does seem strange as the final weeks of the year are generally the weakest due to the weather.

[shanklin] 24/2/2015 07:20

playful

Their YTD LFLs for the year have gone down from 6% to 5% since the last TS. So LFLs since the last TS were negative again. Clearly, the broker estimates for CRAW were ludicrously low and CRAW have probably known this for months. So, now they have beaten them. No surprise there, one imagines, if one was seeing the management accounts. They should probably have updated the market about this much earlier.

It is unhelpful when a company blows cold and then hot in terms of its announcements as CRAW has done over the last two TSs. They should be managing expectations not manipulating them artificially.

All IMHO, DYOR.

Cheers, Martin