Poundland Share Discussion Threads

[leeshindig] 19/11/2015 18:32

they should rename it "two poundland" and it might have a better chance.

[philanderer] 19/11/2015 17:09

Yes wipo there`s a lot of clever bu&&ers about ;-)

Lets see if Questor in the Telegraph updates.

This from 14th april with the shares at 335p:

Questor share tip: Clear buying opportunity in Poundland shares

[wipo1] 19/11/2015 16:59

Naked trader apparently sold before the warning ? He updated the site today, I think he would have to update his sells at the time to make it believable.

[simon templar qc] 19/11/2015 16:14

diku,

Yes.

I am very wary of IP0's some tend to be priced too high. Also they tend to be priced after a co has had a good set of results and one has to be wary of accounts being "massaged" prior to a IPO.

Lots of things a company can do to make to make the accounts look good and not necessary illegal but probably unethical.

Some call it window dressing it used to be called "creative accountancy".

[diku] 19/11/2015 16:02

Was this a slippery IPO?...

[simon templar qc] 19/11/2015 16:00

peeky,

No position here but would be interested how u arrive at £67 profit per store a day I assume you have done the calculations by looking at how many stores there are in the group. It would have helped investors if you had provided the calculations!

Just curious.

If your calculations are correct I agree an increase in wage costs could decimate profitability but bear in mind all retailers will have the same to cope with so in theory costs will rise in proportion for all retailers.

That said a wiping out of profits based on increases in wage costs is flawed.

I would look at the risks another way!

B&M are also increasing store openings at a rapid rate and the other retailers tightening retail costs.

At some stage there will be casualties. I suspect the causilties will be some of the bargain stores as they are limited as to the stock they can supply.

All the majors need to do is price the goods that the pound stocks supply at a cheaper cost regardless of not making any profit until they wipe out the margins at the bargain stores.

It would probably be illegal in the US but not the UK.

I also agree that the company does not deserve a premium rating on the shares at the moment

Just adding my pennies worth!

[philanderer] 19/11/2015 15:56

Not really sure why , but I`ve added a few @ 223.90 :-O

[philanderer] 19/11/2015 15:45

Can`t argue with that. It looks like a pile of cr@p today... lucky to hold 220p by the close.

[shakeypremis] 19/11/2015 15:37

Nope I am not. I try my best to not catch what could potentially be falling knives. I have been having a think and I am not sure the £1 pricing model is viable long term. Things are going to increase in cost and constantly reducing the amount of item you are selling to protect your margain is not possible.

[philanderer] 19/11/2015 15:33

Not in yet shakey ? ;-)

[shakeypremis] 19/11/2015 15:26

Peeky, that is not good at all, assuming your calcs are correct.

[peeky] 19/11/2015 14:58

Currently making just £67 profit per day per store.

Profitability going to be mullered by living wage.

Really should be trading on a discount to other retailers, rather than a premium. So under £2 per share looks realistic.

[fourgirls] 19/11/2015 14:51

My local Poundland store is always busy,most folks I know shop there.It is one of those 'go to'stores,especially this time of year.Margins may be slightly down,but I see a lot of positive news in the release today, certainly not all doom and gloom.

[philanderer] 19/11/2015 13:47

It`s a tricky one to call at these levels. Do I add or do I dump them ;-D

Does look like dead money until the christmas trading statement is out early 2016

[fourgirls] 19/11/2015 13:35

In...nice entry point.Oversold IMHO.

[rathlindri] 19/11/2015 13:24

Out. Ouch!

[philanderer] 19/11/2015 13:16

FT Alphaville ( long one )


So Poundland
PM

BE
I guess so.
PM
Shouldn’t they have warned in advance?
Poundland Group PLC (PLND:LSE): Last: 231.12, down 47.48 (-17.04%), High: 244.00, Low: 216.00, Volume: 2.98m
PM
The statement was kinda sheepish and in denial, somehow
PM
hxxp://www.investe…1511190700092275G/
BE
In terms of the H1 miss, it’s not in warning territory. Only about 5% below consensus.
PM
Ah, ok
BE
Clearly, the guidance is awful
PM
“The sales comparables in the second half are softer and our Christmas range is our best ever. However, we have seen highly volatile trading conditions so far in the third quarter. The quarter’s performance therefore depends more than ever upon the last six weeks’ trading towards Christmas.’

PM
“Fingers crossed”
BE
Yeah, the 99p stores it bought are lossmaking. Considerably.
BE
Not helped by suppliers pulling credit insurance.
BE
Which is something we haven’t seen for a while, though it was a fun theme during the last days of HMV, Jessops and the like.
BE
Here’s Cazenove’s new forecasts.
BE
Poundland has reported a 19% decline in interim EBITDA to £16.8m, 5%
below our estimate. It has identified an incremental EBITDA opportunity
from the integration of 99p Stores of ‘at least £25m’ in due course. 99p Stores
is currently performing worse than expected, though.

We have lowered our
EBITDA estimate for FY2016 by 15% as a result of the loss expected from
99p Stores, but increased FY2017 by 23% and FY2018 by 22% as we include
the acquisition for the first time.

BE
 H1 FY2016: An eventful period for Poundland. Poundland completed its
£55m acquisition of 99p Stores during the period. During the half, it also
battled tough comps to deliver -2.8% LFL growth and opened an unusually
high number of stores (52).

The negative LFLs and higher pre-opening costs
incurred by Poundland pulled interim EBITDA down 19% y/y to £16.8m,
5% below our estimate of £17.7m. Underlying PBT was £9.3m, 27% lower
than H1 FY2015 and 10% below our estimate.

 99p Stores: The good news. Poundland has identified incremental
EBITDA of ‘at least £25m’ from 99p Stores. This is expected to come from
an improved sales performance as the stores are converted and start to trade
as Poundland. It is also expected to accrue from the synergistic benefits of
greater scale in the coverage of overheads and procurement.

 99p Stores: The bad news. 99p Stores is performing more poorly than
anticipated at the time of the acquisition. Poundland expects 99p Stores to
realise a £6-8m EBITDA loss in H2 FY2016. The poor performance was
exacerbated by a withdrawal in credit insurance (now fully restored since the
acquisition), which has affected seasonal stock levels.

 Changes to estimates. We have included 99p Stores in our estimates for the
first time. We assume a £7m EBITDA loss from 99p Stores in H2 FY2016,
resulting in a group EBITDA estimate that falls 15% from £61.9m to
£52.6m (we have lowered our underlying estimate for Poundland by 4%).
The inclusion of 99p Stores drives 23% and 22% higher EBITDA estimates,
respectively, in FY2017 and FY2018. Forecast EPS rises by 3% in FY2017
and 8% in FY2018.

BE
And Morgan Stanley.
BE
Bottom line: Weak set of numbers which should not surprise investors given
the pre-announcement last September. Similar to B&M on Tuesday,
management is flagging the volatile trading conditions providing very limited
visibility on FY results – we expect consensus to come down 4-5% today.
Topline performance:

Poundland reported sales for the 14 weeks to
September 20th on September 24th so today’s results only include an
additional week of trading. The group LFLs were down 2.8% in the first
semester in line with the 2.9% decline reported for the first 25 weeks of
F1H15/16e . Similarly, sales on a constant currency basis increased by +5.6%
in F1Q15/16, in line with the +5.5% reported last September.

Store network expansion: Poundland opened 52 net new stores by the end
of F1H15/16 (6 stores in F1Q), in line with management guidance of 70 net
new stores in FY15/16e in the UK and Ireland, implying selling space
expansion of 17% in F1H15/16.

Margins: Gross margin decreased by 20bps to 36.3% (in line with consensus)
due to the decline in the mix contribution of own labels and the weak Euro.
EBITDA margin decreased by 90bps to 3.0% (consensus 3.2%) due to the gross
margin decline and the higher pre-opening costs. Consequently, the group
EBITDA decreased by 18.5% to £16.8m (consensus £17.5m) and group PBT fell
by 26% to £9.3m (in line with consensus).

99p Stores update: Poundland provided an update on the 99p Stores
business which suffered some trading disruption during the CMA investigation
period and is now expected to post an EBITDA loss of £6-8m in F2H15/16e.
However, they are seeing good sales uplifts on the first 99p stores that have
been converted and they plan to have most stores converted by April 2016.

Moreover, they have identified £25m incremental EBITDA as they transfer the
99p Stores portfolio to the Poundland estate.

BE
Current trading and outlook: Management highlighted that trading
conditions have been volatile since the beginning of the determinant
F3Q15/16 and the quarter’s performance therefore depends more than ever
upon the last six weeks’ trading towards Christmas.

Valuation: Based on last night’s closing price and existing consensus
forecasts, Poundland is trading at 17.1x cal 2016 earnings, 10.4x EBITDA and
2.1% dividend yield. This compares to the UK General Retail sector on 15.3x,
8.8x and 3.3% respectively.

PM
Cazenove brought us this float, should be noted
PM
20 months ago
PM
not as bad as some PE cast-offs
PM
300p float price
PM
230p now

[mallorca 9] 19/11/2015 11:51

I'd hope for more than £2.40 Phil, its moving up steadily and we may see money coming in here late on today.
Well done on Arm. I should have bought that at £8 but didn't.

[philanderer] 19/11/2015 11:47

mallorca, I`d settle for 240p tonight ;-)

At least I`ve got RTN and ARM helping me out today

[philo124] 19/11/2015 11:37

Have to wzit for jan trading statement, should hav bought more Nike.

[mallorca 9] 19/11/2015 11:35

It creeping up steadily Phil.
£2.60 close ?

[philanderer] 19/11/2015 11:30

Yep, i`m surprised a couple of them have kept their recommendations unchanged.

Peel Hunt only started coverage monday morning with 'buy' and 400p target :-)

Doesn`t look like the 9am conference call changed anyone`s view.

[mallorca 9] 19/11/2015 11:26

Typical analyst - wise after the event !
I've added as I'm confident it its future.
1400 stores in UK and growing, expansion into Spain, £66m cash, very low net debt, and the addition of the 99p stores with an investment payback in 3 years.
My local Poundland is always very busy.
We shall see.

[philanderer] 19/11/2015 11:09

Official Christmas TV ad




Independent retail analyst Nick Bubb said: “The key thing was whether Poundland could revive City sentiment and its ailing share price by talking in detail about the strength of the 99p Stores synergies and the trading outlook.”

Bubb added that even though McCarthy “gives it a good go” the fall in profits, dip in like-for-like sales and the volatile trading warning clearly did not thrill investors.