Henderson European Share Discussion Threads

[scumdog] 08/2/2006 15:15

she-ra, on balance do you see Gyllenhammar's purchase as positive, negative or neutral as far as existing shareholders are concerned?

[she-ra] 08/2/2006 14:42

I just see that a company with 100+ stores with dwindling revenues and an out dated concept is heading for further problems. A)People now have the option of renting over the web from many competitors (i.e local monopoly no longer exists) B) Piracy is booming and C) Video downloads are galloping towards us with companies such as Sony and Philips developing Home Entertainment systems that will enable consumers to download for the TV meaning that there will be alternatives to Sky and Cable.

This company doesnt even do music downloads where the fixed costs are small or has even partnered, as BlahDVD has done, with a music download company.

Price is everything when considering DVDs to buy over the internet. And if you use Kelkoo you will see that ChoicesUK is one of the priciest etailers. You will also see the amount of competition. Jersey based etailers are killing Choices. Even Tesco is in Jersey for DVDs and CDs.

[bletherer] 08/2/2006 13:34

She-ra, may I ask if you have a position on this stock? You seem consistently negative on it...

[she-ra] 08/2/2006 13:33

Scotland on Sunday:

Like many activist investors, Gyllenhammar often makes money by buying companies when the shares are cheap and then forcing changes which raise the share price. But he has occasionally had his fingers burned - two companies in which he invested, Carbo and Gaskell, collapsed last year.

[bletherer] 08/2/2006 13:33

I don't deny they're in a tough market, but there's also the question of whether the shares have been oversold. Once they get to the point (as here) where breaking it up and selling it off should in theory yield a profit to shareholders they become of interest to value investors looking to see better use made of the assets.

[she-ra] 08/2/2006 13:25

bletherer - With piracy, the plethora of DVD online rental offerings and cheaper Jersey based DVD etailers eating into their market share I dont see a quick recovery. At the end of the day movie downloads are coming and when they do ChoicesUK is going to look a little antiquated to say the least and fat with stores that will have an even more dwindling customer base.

[bletherer] 08/2/2006 13:07

Presumably he has had successes as well...HET at any rate looks a fairly plausible move for a value investor since it is currently trading at well below book value.

[she-ra] 08/2/2006 12:59

He has invested in such basket cases as Tandem and Densitron. I dont follow investors like these.

[bletherer] 08/2/2006 12:41

she-ra, too early to tell. He has on occasions built up large stakes in companies from what I can see. At any rate I cannot see how this can be anything but good news for beleaguered investors. Even if there is no takeover it will put more pressure on the management and he is quite likely to increase his stake at some point.

[she-ra] 08/2/2006 12:32

Sorry chaps, not a takeover, he invests in small companies and lets city scribblers fill in the blanks.

[nick] 08/2/2006 12:18

Mr. Gyllenhammar - now where I have I seen that name before?

[bletherer] 07/2/2006 22:59

Looking back, that was by far the highest single-day volume this company has ever had (first time over 1m), if the records I'm looking at are accurate. Record volume, 100% buys (it appears), and yet the share price scarcely budges from all-time lows...I call that pretty odd...let's see if a holdings RNS will shed any light on things...

[bletherer] 07/2/2006 16:45

Very interesting - since that's about 6% of the total there should be an RNS tomorrow indicating who has bought them (I somehow doubt that it was a series of separate buyers who purely coincidentally happened to buy on the same day). I'm pretty surprised that the price has only ticked up 1p in response - there are, after all, only about 4m odd shares not held by directors/institutions. Let's hope this is a prelude to brighter times ahead.

[sporticus] 07/2/2006 14:52

1.2M shares bought today.

[michaelmouse] 25/1/2006 21:02

Sporticus - Just a quick response to your earlier post. I've no idea who a possible bidder might be. However the company is cheap and I am sure that somebody may fancy their chances at extracting value if the present management fail to do so? As the telegraph article points out the market cap. is just a few weeks sales and shareholder pressure is mounting.

[sporticus] 25/1/2006 13:07

This gets stranger. CEO Muspratt puts piracy at 30% of the legitimate market. BVA claims 10% of total market. All we need now is Frank Muir to show True or Bluff.

[anley] 25/1/2006 10:37

Have you all read todays Daily Telegraph (section 5) the City funds want the Chairman to go. They do not want him to pull any strings even as a non executive.

There are other deals in the offering BUT I don't think they will be that profitable and the company should get its cash flow back and turn this into profit as well as cancelling its final dividend. That will hurt the directors and make them work harder to get back shareholder value.

I bought 5000 yesterday - declare my interest - as a one year holding and look for a price at around 80p or a bid if things get any worse because the board will be hard pushed to make any more excuses - there will be none.

[sporticus] 24/1/2006 23:23

Thanks michaelmouse. I will hold for the time being but can I ask what you would do if it becomes a bid target, and following on from that, who would want it? Blockbuster? - No, HMV? Why? Whos left? Theyre last and late in with the internet business so not much chance of any break there. There product is expensive. The interim TV bit talks of deals with Carphone Warehouse and Unique but no mention of the Sainsbury deal. Why not? Its all over the web but possibly late also. What do you think?

[michaelmouse] 24/1/2006 21:09

Sporticus - I wouldn't give up on your investment just yet. Whilst HET faces huge challenges, the shares trade at approx. 46% discount to NAV and the company has no long term debt. I very recently bought some on the basis that it is a good value/recovery play. I might add that I am looking at a minimum two year investment, unless it becomes a bid target.

[sporticus] 24/1/2006 16:03

They appear to have rebranded 75 stores, a third of their portfolio. This was done from cash. When will they rebrand the remaining two thirds and will that come from cash too? So how do they expect a positive flow in H2 and beyond. Beats me. Stock write-offs will always be necessary.

Someone just sold 100K. Price has regained some ground on this mornings low though I dont hold out much hope for my investment.

[scumdog] 24/1/2006 15:51

I agree. Can't see much momentum for a sustained rise in the share price
Think it will languish awhile. I'm not buying anymore but will hold (bought at 60p).

[manzarek] 24/1/2006 15:06

According to Digital Look, Seymour Pierce have upgraded to hold.

[bletherer] 24/1/2006 14:12

Overall this looks to me a bit of a mixed bag. Sales were clearly light, £2m below the forecast in November, which I find a bit hard to square with the claims that the performance in the final weeks leading up to Christmas was relatively the best - in that case why did they undershoot a forecast made only 4 weeks prior to the close of the period? Profits (or rather losses) were pretty much in line with the previous statement. Potentially the most encouraging element was the claim that the choices Uk stores have now "returned to modest profitability", since if they even manage to break even there the rest of the group is profitable. They also promise to be cash-flow positive in H2 and "plan" to be so in the following financial year, too. So perhaps there's some light at the end of the tunnel - if they are not going to make stock write-offs a regular feature.

[anley] 24/1/2006 13:19

There is much to do for the new MD but the worrying question is will the old one let the new one get on with his job or will he still meddle?

I agree with Scumdog that the cash has to balanced by the reduction of stock and the management needs to be clearer about how they will deal with this problem.

All the stock options are now worthless BUT shareholders should resist any new ones being issued at these levels - I have seen turn round situations like this before where the management trys to issue new ones. I don't mind this but it would have to be linked to profit performance etc. Is the new MD any good as he has been there since 1999 - and we have to be critical of him for the time being - perhaps he would like to make a statement on how he is going to get the share price back to its IPO level?

I also wonder what support the brokers are going to give the company and are they prepared to issue a buy note?

The pressue is on .................