Dobbies Garden Centres Share Discussion Threads

[gengulphus] 08/6/2007 08:48

Some excellent-looking interim results:



though with a slight warning that the second half has got off to a poor start because of May's cold, wet weather.

And an offer of 1500p/share by Tescos - not the bidder I think we were anticipating!



It's probably a fair offer, but as often happens, I think I'd prefer to be able to continue to benefit from the company's growth for many years to come... I suspect though now that it's just a question of whether any sort of bidding war develops - and I suspect the fact that the directors have made irrevocable commitments to accept the Tescos offer that remain binding even if a better offer comes along must make that rather less likely.

Gengulphus

[tuffbet] 07/6/2007 16:52

Another interesting article on the subject of Tom Hunter's interest in DGC

[tuffbet] 04/6/2007 17:39

Good article in Sunday Herald re the bid situation - see link below

They appear to see Apax as the bidder with Tom Hunter as the potential spoiler - personally I see it the other way round but it matters not - if APax do put in a winning bid I still think DGC will end up in TH's hands one way or the other and a little healthy competition for the company won't do any harm to the share price

[tuffbet] 01/6/2007 14:52

Glyn10

Thanks for that. I am looking at DGC as a long term investment and would probably only look to trade it if a bid came in well above what I thought might be a take out price so I am not too worried about what might happen in "cooler" periods ie when TH isn't getting a mention.

As I have intimated I think this is a great type of business to have some exposure to eg if the Chinese market tanks by say up to 30% some time soon ,which must be a possibility it's not the type of business which is going to suffer in the wake of that altho the share price will get some blow back from such an event. So I am happier there than holding some of the much more internartional blue chips and if TH does back away I think there will be others who will quite quickly fill the void.

See we have managed to touch £14 today which is another nice move in percentage terms

[glyn10] 01/6/2007 09:25

wanhelm/tuffbet,

Tom Hunter has been interested in DGC for sometime and is the cause of the majority of the share price rise in the last 12 months. The company is well run and turns a tidy profit and would indeed give increased sales and better buying power.

However, word of caution. In the short term you can make good money on the back of the hunter interest but long term the business results do not support the high share price (currently). As was seen in the drop from 12500 to just above 11000. Only the renewed interest by the Hunter stake has stopped the share price dropping further.

[tuffbet] 30/5/2007 17:02

wahlenm

agree with what you say DGC would be a nice fit,synergy looks good and pricing power would benefit all related businesses thats one of the reasons I believe TH would be prepared to pay more than anyone else.

As a side note the last garden centre I was in had an antique shop in the grounds which was doing very nicely from the bus party visitors who were buying up things they associated with their youth including old comics,magazines - I went in to look at what was being sold and how the business seemed to be doing and came out with a 35 year old book !

[tuffbet] 30/5/2007 16:51

growthhunter

I think I have probably covered that point in the two posts above in that I believe they have the ability and the marketing expertise now to keep bringing in customers throughout the year. I was in one last Xmas and you couldn't move in the tearooms and gifts section both of which are now even bigger. They have the type of client base which likes to go out browse shopping/tea and buns , present for the grandchildren , card for the new neighbour mentality and they like the fact that they usually don't have to go into town or to a large shopping mall to do that - as a rule older people don't like driving in city centres or large Tesco type car parks and a run into the country to an open car park which they are not sharing with the supermarket and M&S shoppers has an appeal younger people find difficult to understand.

It's my belief that one of the reasons DGC's share price was slow to catch up with the potential for the business is the fact that most people haven't yet grasped that while Garden Centres must to an extent be seasonal it is no longer hobby gardeners who are running these businesses but hard headed business men. They know they have shareholders to report to infact many of these companies even below the quoted level now have the knowledge and expertise to handle the seasonality factor and have built all year round business models.

[wahlenm] 30/5/2007 16:48

tuffbet- I endorse your view that hunter wants this asset. I valued it at a maximum of £15. You have to remember that dobbies is very well run and probably as efficient as it can be. Hunter already has wyevale and blooms whose sales are about £230m per year. The extra sales that dobbies would bring (£65M )means he can extract better prices from his suppliers.

[tuffbet] 30/5/2007 16:39

growthhunter and wahlenm

have replied over on new thread I have set up "Dobbies what price a bid ?"

[tuffbet] 30/5/2007 16:33

As his wealth would suggest Hunter has his business head well screwed on and I think he is again right on the ball if he is indeed looking to buy DGC as his holding suggests.

While Mr Hunter and Dobbies are now nationally known both have their roots (no pun intended) in Scotland and I think this is significant because I have a feeling that Mr Hunter would love to get his hands on this prized Scottish asset. While he is a hard headed business man an would I am sure never let sentiment rule his business judgement I have a feeling that sometimes, but especially when you are very rich, you are prepared to pay that little bit more or go just that bit further to get something which you can associate with in the early part of your life and the ownership of which could never have been considered as even a remote possibility. If a fight develops for Dobbies, which I think it will, I don't expect Mr Hunter to give up easily so as I see it the price could go much higher .

The second factor which makes me think the current price could be well below the takeout level is that it's generally accepted that whatever your buying you pay as little as possible in order to maximize the profit potential or simply the pleasure of securing ownership at a price which seems a bargain relative to the joy of ownership. The fact that purchases are being made at or around the all time high for DGC's share price suggests that the buyers are fairly desperate or determined to mop up whatever shares they can get now . Why should taht be ? Well perhaps they think there is little chance of getting them much cheaper and if they wait for a better opportunity ie a lower price a third party may just pick up a strategically vital percentage of the shares before they do.

Just my own humble opinion - glad to hear what others think .

On a separate but related note I am just back from a holiday in Scotland and visited one or two garden centres during that visit none of which were owned by Dobbie's. What I came away with on each occasion was renewed confirmation of my long held view that a well run garden centre is a potential gold mine. I watched the buses rolling in and each contained about 30 people average age around 65 all with time to burn and money to spend. Those who were not spending on gardening items were either spending in the cafeterias or buying gifts, cards etc all the items with high mark ups - I can't think of a better business to be in right now it even looks recession proof !

Throw in the asset side of thinks ie valuable land and you have a business model which it seems to me the likes of Warren Buffett would be keen to invest in ie asset rich ,cash generative, relatively simply franchise and one which can be expanded globally with some modification .

May be wrong but I can't see Dobbies going for under £15 in the midst of the current acquisitions boom

[wahlenm] 30/5/2007 16:21

tuffbet- I endorse your view that hunter wants this asset. I valued it at a maximum of £15. You have to remember that dobbies is very well run and probably as efficient as it can be. Hunter already has wyevale and blooms whose sales are about £230m per year. The extra sales that dobbies would bring (£65M )means he can extract better prices from his suppliers.

[growthhunter] 30/5/2007 16:11

...........but remember it is a seasonal business. have you even been to a garden centre in february?

[tuffbet] 30/5/2007 15:52

As his wealth would suggest Hunter has his business head well screwed on and I think he is again right on the ball if he is indeed looking to buy DGC as his holding suggests.

While Mr Hunter and Dobbies are now nationally known both have their roots (no pun intended) in Scotland and I think this is significant because I have a feeling that Mr Hunter would love to get his hands on this prized Scottish asset. While he is a hard headed business man an would I am sure never let sentiment rule his business judgement I have a feeling that sometimes, but especially when you are very rich, you are prepared to pay that little bit more or go just that bit further to get something which you can associate with in the early part of your life and the ownership of which could never have been considered as even a remote possibility. If a fight develops for Dobbies, which I think it will, I don't expect Mr Hunter to give up easily so as I see it the price could go much higher .

The second factor which makes me think the current price could be well below the takeout level is that it's generally accepted that whatever your buying you pay as little as possible in order to maximize the profit potential or simply the pleasure of securing ownership at a price which seems a bargain relative to the joy of ownership. The fact that purchases are being made at or around the all time high for DGC's share price suggests that the buyers are fairly desperate or determined to mop up whatever shares they can get now . Why should taht be ? Well perhaps they think there is little chance of getting them much cheaper and if they wait for a better opportunity ie a lower price a third party may just pick up a strategically vital percentage of the shares before they do.

Just my own humble opinion - glad to hear what others think .

On a separate but related note I am just back from a holiday in Scotland and visited one or two garden centres during that visit none of which were owned by Dobbie's. What I came away with on each occasion was renewed confirmation of my long held view that a well run garden centre is a potential gold mine. I watched the buses rolling in and each contained about 30 people average age around 65 all with time to burn and money to spend. Those who were not spending on gardening items were either spending in the cafeterias or buying gifts, cards etc all the items with high mark ups - I can't think of a better business to be in right now it even looks recession proof !

Throw in the asset side of thinks ie valuable land and you have a business model which it seems to me the likes of Warren Buffett would be keen to invest in ie asset rich ,cash generative, relatively simply franchise and one which can be expanded globally with some modification .

May be wrong but I can't see Dobbies going for under £15 in the midst of the current acquisitions boom

[bigbertie] 30/5/2007 10:24

Bid approach confirmed. With Hunter recently increasing his stake, he looks the most likely suspect. City talk of 1,500p bid level.....price now 1,340p. This looks like fun.

Edit - actually I see that the rumour is that it is Apax, not Hunter, who has made the approach. So maybe a contested bid??

[gengulphus] 31/1/2007 02:19

Probably because the market was looking for rather more growth than it got, and so was a bit disappointed. To back this up, look at a rough PEG calculation:

P/E = about 1220p / 37p = about 33, EPS growth = about 11%, so a PEG of about 3

Not saying that I've a problem with this - I don't, I like the company and I'm happy to continue holding. But I can see how some might think the share price growth has got ahead of the company growth.

Gengulphus

[glyn10] 30/1/2007 16:18

Why the hell has the share price dropped? Sales are up profit is up, everything looks good. Even dobbies say that the results are more than satisfactory??!!!

[glyn10] 18/1/2007 11:28

Mr Hunter wants a piece of Blooms !!

[wahlenm] 16/1/2007 17:52

It must be either wyevale or dobbies

[sper] 16/1/2007 17:29

BBR today announced in takeover discussions with offer of 85p. Might be interesting to see how this impacts DGC, depending of course on who BBR are in discussion with

[glyn10] 20/12/2006 18:03

Share price has gone ballistic again, have I missed something???

[bigbertie] 20/11/2006 10:03

depends on your time scale. you may have to wait a while for any bid action, so if you want some cash for other things it could be time to take those profits?

edit - you can always come back in later, because if the shares drop much I wouldn't be surprised if Hunter starts increasing his stake - IMHO, DYOR etc

[glyn10] 19/11/2006 12:26

I think you are right bigbertie but, I am not sure how the share price is going to fair in the short term unless there is some good news or announcment in the pipeline.

[bigbertie] 15/11/2006 15:46

when I looked earlier today only the bid price had dropped so the spread was something like 1100 to 1145 pence (I think the 1145 offer is unchanged). it looks like dealers are trying to discourage sellers. As the shares have had a brilliant run there are bound to be some profit-takers, but the actual volumes are very low as always on Dobbies.

the important question is what happens next? the shares are very high on an earnings basis, but are not likely to fall too far because of the property assets. in the long term the Hunter stake is bound to precipitate some bid interest, even if he sells it to someone else.

[glyn10] 15/11/2006 11:14

Does anybody know the reason for the fall ???