Poundland Share Discussion Threads

[darrin1471] 25/9/2015 14:31

"The minimum wage legislation announced by Chancellor George Osborne in July is due to take effect next April. It will start at £7.20 and is expected to rise to £9.35 by 2020 for all workers aged 25 and over.
The fact that Starbucks will pay the National Living Wage to all workers will be welcome news to employees at the coffee chain, over half of whom are under 25."
hxxp://news.sky.com/story/1558607/starbucks-to-pay-living-wage-to-all-workers

[cwa1] 25/9/2015 09:04

In a moment of complete madness, in spite of many reservations, I've added a few at just under 270p. Probably way too early but felt it was worth a modest punt at these levels. Good fortune to all holders.

[philanderer] 25/9/2015 08:49

like for like is down according to yesterdays rns..... and a strange update about trading from the 99p stores

+1p on dead cat bounce today and still 12p short of the placing price.

I'd avoid until the interims on the 19th november. imo 300p won't be seen for a very long time.


Has Questor updated his 'buy' @ 335p from 14th april ?

[philo124] 25/9/2015 08:46

Canaccord maintain 400p share price They site significant upside in forward EBITDA.

[molatovkid] 25/9/2015 08:13

They move to an Aldi staffing model....cut numbers big time....make everyone work like trojans.

Look at the profit per store under Poundland brand and the profit per store under 99p Stores. There is a big difference and plenty of scope one hopes for Poundland to get much more out of the 99p estate.

[darrin1471] 24/9/2015 21:33

I'm in two minds over Poundland. 99p acquisition looks cheap at 200k per store. Closing 60+ sites where 99p and £ compete should significantly boast turnover at the remaining store. Scale and buying power should also improve margins.

The big downside for me is the living wage proposals. It is a huge cost potentially. In 2015 wages were reported to be £163m over 588 stores. Thats 277k per store. 900 stores in 2016 would put the wage bill at £250m. The minimum wage rises by 11% in April and the proposal is for a 38% rise by 2020.
Assuming 50% of the staff are on minimum wage
11% on £250m x50% would add £14m in wages in 2016
38% on £250m x50% would add £48m in wages by 2020
Anyone earning more than the minimum wage is going to want to keep their wage differential so there is going to be wage pressure from anyone currently earning £7 to £12 per hour. The living wage will not apply to the under 25's so the under 25's will suddenly find themselves in demand. Pubs shops and any other low wage employers will see this age group as a way to keep costs down.
Pubs and shops will raise prices to compensate. £land will have to increase margins or offer less product for the pound.
The consequences of the living wage(minus tax credit and benefit cuts)could be increased consumer spending, inflation and a weaker pound.
£48m extra costs plus inflation and a weaker £ would be a perfect storm for £land.

[loftgroovv] 24/9/2015 17:02

Was thinking of buying in here. What's with the volatility in the SP? The chart since IPO looks like its on crack.

Info welcome.

[cwa1] 24/9/2015 16:59

Paradoxically, given my concerns espoused earlier, I find myself thinking there is a price for(almost) everything and wondering if it might be good enough value after today's haircut? Still highly rated though and am concerned by some of the tone of today's announcement-but I believe that they can probably turn the 99p store acquisition to their advantage, given enough time to sort things out there, and leverage greater things out of the enlarged estate.

Anyone else got any thoughts?

[philanderer] 24/9/2015 16:55

Actually to be fair to the company , this is from the february rns for the 99p stores deal...

The cash consideration of £47.5 million and the cash costs associated with the integration and restructuring of 99p Stores will be funded by an equity placing to be undertaken at or immediately prior to the closing of the Transaction and an increase in Poundland's revolving credit facilities, reflecting its focus on preserving a conservative financial profile to support the capital investment plans in its business.

[philanderer] 24/9/2015 16:37

The 280p placing takers are sitting on a 10p loss already , better than mugs like me with a 35p loss per share.

This'll take a while to regain some credibility,...and this doesn't look to clever from the 14th april when the shares were 335p


Questor share tip: Clear buying opportunity in Poundland shares

[raysor] 24/9/2015 13:39

I doubt you will get bombarded, it closes at 4.00pm today

[cabreado] 24/9/2015 12:51

Expected typical market dilution for current investors on news like this. 50 million will be quite a challenge for JP Morgan to raise, so their marketing machine will be bombarding us with how great prospects are in order for them to cash in at Priv Inv expense.

[philo124] 24/9/2015 12:47

Should have acquired Home Bargains.

[kmann] 24/9/2015 12:46

Common sense says this business model is doomed. Increasing costs means they go fow lower quality/quantity per unit items, ie a rip off OR you have to put your price up, then your not a pound shop. Trying to increase revenure by opening more stores is not the solution, just adds to your overheads.

No-position, just my view.

Should go to a pound ... ironically

[philanderer] 24/9/2015 12:43

ds, there you go , all time low 283.9p to buy.

600k traded and plenty of people dumping them well below the listing price

Just become the dog of my prtfolio

[philanderer] 24/9/2015 11:42

jeez, jp morgan can't even give these away 😦

[dstorey1] 24/9/2015 11:11

Will re-qualify previous. Market will retest lows of mid/low 280 and in MY personal opinion will represent a screaming buy.

[gswredland] 24/9/2015 10:57

Me neither. Looking from the sidelines still...

[cwa1] 24/9/2015 10:51

This peep did read it, quite carefully, and I saw a few things that were at least slightly negative and had minor alarm bells tinkling in the background. Clearly execution of the merger, etc. is a key component going forward, and if they get it right all will be well, BUT I don't think it is in the "screaming buy" category personally.

[dstorey1] 24/9/2015 10:40

Peeps need to read RNS again. Screaming buy though greed of market may well push them lower short term. Will be watching these like a hawk:)

[cabreado] 24/9/2015 08:40

Nomura brokers predicted a drop and bleak future, but I thought I knew better.. ?

[philo124] 24/9/2015 08:36

Bizzare. Which broker note said "The acquistion is expected to funded entirely by a placing of new shares." ?

[philanderer] 24/9/2015 08:32

falling like for like sales.

Lets see what Questor says now. 😉

[philanderer] 24/9/2015 08:16

i bet no institution saw that coming......

guess the price 294p / 295p