Poundland Share Discussion Threads

[clocktower] 07/1/2016 12:12

Eastbourne1982, I agree with you 100%. As for footfall and the weather philanderer,it does make a huge difference when it is bright and sunny, people just like to get out and will shop for the everyday low price items and fill their bags when there is no likely hood of getting drenched while lugging maybe £10/£20 worth of pound shop items. Turning 99p stores into Pound Stores at a great rate, and it costs, so well done.

I think the results are better than many expected and have bought in a few times already today. Back to £2+ as soon as the market bounces imo.

[mike24] 07/1/2016 12:06

worked five yrs in supermarkets sales promotions,
my boss left for Tesco I took his job, before
setting up on my own, mainly developers/builders
the UK has seen a graveyard full of retail disasters over the yrs
but I still think PLND will pull through, as joe public is
looking to save MORE money, sad to say but Lidl have won hands down
with xmas advertising, you want success then copy the leaders

[philanderer] 07/1/2016 11:54

Haitong Securities note:

Tony Shiret, of Haitong,

BE
Poundland (PLND LN, 192p (last night’s close), Sell, FV 160p) has reported headline Q3 total constant currency revenues of 30.1% (excluding Spain but including 99p Stores). However within this, underlying total revenue growth at Poundland stores is just 9% (of which 3% came from converting 99p stores). No LfL number has been disclosed. 9% or an underlying 6% strikes us as underwhelming. We estimate that physical space growth for Poundland stores in UK and Ireland was up by at least 14% given there have been 81 openings since Q3 last year (there were 572 stores in the UK and Ireland at the end of Q3 last year). Either Poundland is achieving very low sales productivity on new space or the LfL number is down significantly. We suspect it is a combination of both. As such underlying consensus PBT will be towards the lower end of the range (£39.8-42.6m, consensus £42.6m) implying a 6-7% downgrade to consensus numbers.

BE
While no LfL number has been disclosed, we suspect LfLs were down at least 2-3% in line with the trends in H2 last year. Clearly mild weather and abnormal footfall patterns (due to Black Friday) will have negatively impacted Poundland’s performance: the company reports that footfall levels remained below last year. However December did see an improvement in trading.
Is the LfL number forgivable? In this period we estimate that comparatives eased by c. 100bps. Further, given that this quarter is skewed more towards own branded sales (Xmas and Halloween) we would expect any weakness in the branded consumables category to have a more muted effect. Generally we feel this is a disappointing outcome. What is more concerning is that footfall levels are unlikely to improve in the long term and Black Friday is here to stay.

BE
Yet if LfLs are down just 2-3%, this still implies that the productivity on new space was very low, given new store openings reach maturity instantly and that there have been c. 80 openings since last year at core Poundland. We do not believe the timing of store openings or mix of store formats can explain the disparity between physical space that has been opened and revenues sales growth from new space. The majority of stores are likely to have been opened in the larger Retail Park formats (20% larger in size while with 10% lower sales densities). In terms of timings of openings, we recall at Q3 last year that the store opening programme was back end loaded: Poundland stated at the time “due to the timing of our openings, the contribution from new store trading weeks was lower than the corresponding period last year”. Therefore we should expect some sales from last year’s Q3 openings to be annualising in this quarter.

BE
Following on from our initiation note “Into the discount bin” (see link attached) we continue to believe that Poundland and B&M (BME LN, 267p (last night’s close), Sell, FV 230p) are subject to ongoing structural pressures in the form of heightened competitiveness in the branded consumables category in a sector thwart with over supply. In particular we believe that both Poundland and B&M have been achieving sales densities on new space significantly below their existing estates (40% below in Poundland’s case). This trend appears to have been worsening over the years. Worse still, at Poundland, we believe that own branded product has seen sales densities fall by over 20% in the last four years. As such we worry that Poundland’s (and B&M’s) offers are failing to resonate with customers, particularly where new stores are being opened in the more expensive South.
While the valuation already reflects volatility surrounding Q3 results and losses on the recent acquisition of 99p Stores, we do not think it captures the potential structural problems, which we outline above, of an ongoing basis. We remain sellers of Poundland with fair value of 160p.

FT Alphaville

[philanderer] 07/1/2016 11:14

I`m tempted Eastbourne but only on bid prospects.

The margins are so tight , around £20m profit on £1bn sales. Supermarkets and discounters are now matching and beating PLND`s offerings and stock control over christmas was poor.

City institutions must have lost confidence , down from the 300p offer and 280p placing. 1 million traded already today and we`re sub 170p

I just don`t think management are up to it and it needs a new broom and a relaunch. On that basis I might add.

[eastbourne1982] 07/1/2016 11:06

I'm obviously in the minority as I thought the update was decent and fairly positive going forward, I've bought more at £1.70 as I expect a recovery, my average price is now around £2.20, never good sitting on a loss however I remain confident of making money out of Poundland.

[philanderer] 07/1/2016 11:05

Poundland revealed it had a dreadful Christmas as shoppers chose to stay at home and buy their gifts online, while heavy discounting elsewhere also wooed potential customers away

[philanderer] 07/1/2016 10:58

Analysts were largely unimpressed by Poundland’s Christmas trading.

James Collins at Stifel said:

Poundland’s Q3 trading is disappointing. While weak high street footfall is clearly a factor, this weakness reinforces our concerns about the strength of proposition and competitive threats.

Kate Calvert at Investec said:

Poundland’s Q3 trading update is disappointing and likely to not just be attributable to the weather in our view, with further questions over the pressures facing its core business (single price format, high street footfall). We cut profit before tax forecasts, for this year by 17.5% and next year by 5.6%. Although Poundland is lowly valued, particularly when incorporating the 99p Stores synergies, the investment case remains un-compelling to us at this stage with the core business unlikely to deliver earnings growth in our view.

[philanderer] 07/1/2016 09:35

Couple in...

7th jan Haitong sell tp 160p
7th jan Investec hold tp 200p cut from 225p


let``s see how the 9:30am analyst meeting goes

[clocktower] 07/1/2016 09:07

Good cash situation and shoppers will return in numbers when the weather improves - growth in Spain - bouncing for now but just = good trading opportunities.

[philanderer] 07/1/2016 08:56

That stuffs beyond me costa , I have to be able to draw it on a piece of paper then I can understand it.


Back to Poundland:

Top and bottom of it was that there`s been less shoppers


Cost of expansion we new about.
Still going to experiment selling items above £1

Question is , do you trust this management.

Offered at 300p
Placing at 280p

1 minute ago 179.2p

[costax1654x] 07/1/2016 07:23

Is Peter Scott as well,building a media agency

[uhound] 07/1/2016 07:13

Update out and NOT all doom and gloom!

[philanderer] 06/1/2016 19:53

Costa , just had a look and I can`t understand what they do :-D

I see Nigel Wray`s got 10% and he`s no mug.

Luck with them.

[costax1654x] 06/1/2016 19:21

Anyone in BHRD as well?i'm the only one???

[philanderer] 06/1/2016 18:18

It`s margins .... apart from Lidl/Aldi , SBRY and TSCO are now matching and even undercutting a lot of the food lines PLND carries.

It`s cut throat out there. My local PLND have been flogging a box of six Mr Kipling mince pies for 18p , piles of them left .... that does not bode well

[rickyvader] 06/1/2016 18:09

Well too late to do anything about it now I guess.What sort of update news will lift this back up ?Maybe if they just say it's the same as the last trading statement that would be enough? It's dropped a lot since then

[uhound] 06/1/2016 18:07

Really don't think the name matters in the long run - Poundland still relevant as long as currency is still in pounds! Could be selling at £1 or £5....Now 99p stores that's a different story!

I still see people needing to be careful with their spending for sometime to come yet, so I think any "bargain" type retail store will do OK.

Update will be interesting - I'm not throwing in the towel yet myself!

[philanderer] 06/1/2016 17:44

-15p in 3 days........still nicely on track to be 0p on the 4th march


1 million shares traded ........pile of cr@p

Worth noting BME has gone down the toilet as well.

[greenrichard] 06/1/2016 17:33

Never understood how this business model copes with inflation and profit margins. Not too bad now with inflation ridiculously low but what realistically would a pound buy in 10 years time. . Maybe they could rebrand to onepoundtwentyfiveland

[greco600] 06/1/2016 16:03

Update is tomorrow

[philanderer] 06/1/2016 15:58

Got a link for those Ricky , thanks.

[rickyvader] 06/1/2016 14:51

According to the HL diary pound land have a trading announcement. The pound land web site says that the trading statement is out on 15th Jan . So I'm not sure if both of these will come out ?