Poundland Share Discussion Threads

[abcd1234] 17/6/2016 10:03

Poundland
Julia Kollewe, The Guardian

Poundland, which faces a possible takeover bid from the South African conglomerate Steinhoff, has reported a sharp fall in profits, following the £55m acquisition of its loss-making rival 99p Stores.

The UK discount retailer said pretax profits crashed nearly 84% to £5.9m in the year to 27 March. Like-for-like sales dropped 3.9%, following a 2.4% rise in 2015. The retailer cut its full-year dividend to 3.65p a share, from 4.5p in 2015.

Poundland blamed the long regulatory process for the declining performance of 99p Stores before the acquisition. The competition regulator approved the deal in September after a six-month investigation. During that time 99p Stores lost its credit insurance, which meant it was cut off by many suppliers.

To stem losses at the new shops, Poundland rushed through a store refurbishment programme in four months, converting 235 new stores to Poundland by the end of April. The conversion programme is now complete; a further 17 shops are to be closed or sold.


Steinhoff considers bid for Poundland

Steinhoff has amassed a near-23% stake in Poundland and said on Wednesday it was considering a possible offer. It is on the prowl again after failing to buy Home Retail Group, the owner of Argos, and French electrical goods group Darty in the last few months.

Steinhoff, chaired by the retail mogul Christo Wiese, already owns furniture chains Harveys and Bensons for Beds in the UK, as well as stakes in fashion chain New Look and grocer Iceland.

Jim McCarthy, Poundland’s chief executive, will hand over to Kevin O’Byrne in two weeks. He said the retail environment remained challenging, but expressed confidence that Poundland would return to growth.

Poundland has scaled back new store openings, after opening a net 60 last year, to focus on improving its 896-store business.

The retailer’s underlying profits – earnings before interest, tax, depreciation and amortisation – fell 4.1% to £56.9m last year. Total sales, including new stores, rose 9.7% on a constant currency basis to £1.2bn.

Darren Shapland, the chairman, said: “This has been a challenging but transformative year for Poundland and the acquisition of 99p Stores has further strengthened our position as Europe’s biggest single-price discounter.”

McCarthy said the company had grown from 146 stores to about 900 during the 10 years he was at the helm. Sales rose by £1bn during that time, and Poundland floated on the stock exchange in March 2014.

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[philanderer] 17/6/2016 09:43

Capital Group trimmed by 4 million on wednesday , probably to Steinhoff. Capital still holding 10 million shres.

So called 'expert' sitting on the fence ;-D

17th june Deutsche hold tp 205p
16th june HSBC hold tp 195p
16th june Credit Suisse outperform tp 235p
16th june Canaccord buy tp 220p
16th june Beaufort hold tp 220p
16th june Liberum hold tp 160p
16th june Jefferies hold tp 195p

16th june +++++ Results +++++


15th june Peel Hunt buy tp 300p

15th june +++++ Steinhoff holding +++++

[philanderer] 16/6/2016 16:02

Investors Chronicle:

IC TIP UPDATES:

It’s amazing what a potential takeover can do. Shares in Poundland(PLND) are still up 2 per cent this morning despite a pretty terrible set of results. Like-for-like sales fell almost 4 per cent last year which translated into a 13.5 per cent crash in adjusted pre-tax profits. The dividend’s been cut and EPS has been decimated to just 0.6p. But the market has clearly hung onto hopes that South African retail group Steinhoff will succeed in making a high-premium bid for the discount chain. Current shareholders should sit tight until a formal bid emerges

[kmann] 16/6/2016 15:50

A-MAZ-ING how Jefferies Internationa go from 135 to 195 (they will end up 100% incorrect), I honestly think these brokers make it up as they go along. Most PIs have a better grasp.

[sportbilly1976] 16/6/2016 15:08

210 resistance holding firm

[she-ra] 16/6/2016 12:31

I see new suitors entering the race for Poundland. Wonder if Tom Morris will let this Steinhoff takeover happen.

[dins1249] 16/6/2016 12:29

As we all know, Steinhoff tried to be very clever previously by first making a bid for Home Retail and then walking off 2 hours before the deadline. They thought they will have it easy with Darty which they did not succeed. If this time they do not land Poundland, they will be the biggest laughing stock in the City and nobody will ever trust them to perform.

[clocktower] 16/6/2016 11:17

At least the new CEO will make a decent profit on the stock he purchased and a pay-off that would make anyones day I expect. What a result for him.

[philanderer] 16/6/2016 11:04

Yep, sounds plausible. In at 235/240p with first offer. Knocked back by PLND board. Increased to 250p and board recommend acceptance :-)

[aishah] 16/6/2016 09:35

"Steinhoff could potentially bid about 250 pence a share, or 671 million pounds, and it’s unlikely other suitors will emerge, according to analysts at Peel Hunt."

[philo124] 16/6/2016 09:28

They have to 13th July to bid or not.

[paleje] 16/6/2016 08:31

According to todays Times, Steinhoff paid 195p for WP's stake, I don't think they're worried about last years' numbers:-

Having lost out in the battle to buy Home Retail Group, Steinhoff International has turned its attention elsewhere on the British high street and announced that it is considering a bid for Poundland.

According to a statement issued by Steinhoff late yesterday, the company has built up close to a 23 per cent stake in Poundland. The large holding makes it Poundland’s largest shareholder, putting it in a strong position to gain control of the business.

Earlier in the day the South African retail group had said that it was looking at buying the discounter. Within an hour, Poundland had issued a response advising its investors to “take no action” and adding: “There can be no certainty that a firm offer will be made, nor as to the terms on which any firm offer might be made.”

Poundland’s shares, which surged above 214p in early trading, settled back to close at 200p, up 4¼p. Nevertheless, this was their highest level since early this year and valued the retailer at about £540 million.

Steinhoff’s offer came as Poundland’s private equity backer sold its last remaining stake, having floated the company two years ago. Warburg Pincus sold its 15.3 per cent holding yesterday at 195p, according to traders. The identity of the buyers for about £80 million was not made public but there was speculation that it was Steinhoff and Brait, the South African investor in New Look and Iceland, among others.

Brait is the investment vehicle of Christo Wiese, the South African retailing billionaire who became a minority shareholder in Steinhoff in 2014 after the company bought Pepkor Holdings, which he part-owned.

For Steinhoff, the acquisition of Poundland would continue its expansion into British discount retail market. It already has 50 Pep & Co stores, which it gained from the Pepkor deal, and has plans to open a further 20 this year, as well as launching a new “Guess How Much” store format.

Poundland, which is struggling with a downturn in trading, will announce today full-year results that are expected to show a fall in earnings as the business copes with the £55 million takeover of 99p Stores.

Jefferies upgraded Poundland shares from “underperform” to “hold” after the news from Steinhoff.

Behind the story
Steinhoff is hoping it is a case of third time lucky. It has failed this year to buy two big European businesses, losing out to J Sainsbury in the battle for Home Retail Group and then capitulating to Fnac in the fight for Darty, the French electronics chain, but with Poundland Steinhoff appears to be on more secure ground.

The South Africa-based retailer is taking advantage of the expertise in discount retailing of Christo Wiese. South Africa’s richest man became a leading shareholder in Steinhoff after it bought Pepkor, the country’s largest retailer, in 2014 for $5.7 billion.

Pepkor had been built up by Mr Wiese and his family after they bought a stake in Pep Stores in 1965, which at the time was a four-outlet discount clothing chain that would become the cornerstone of a $7 billion fortune.

Steinhoff and Pepkor are now part of a business empire that stretches across Africa, Asia and Europe. Through Brait, a company said to be aiding Steinhoff’s bid for Poundland, Mr Weise has made a series of personal British investments, last year buying a majority holding in New Look as well as control of Virgin Active, the gyms and health club chain.

Christo Wiese, South Africa’s richest man, became a leading shareholder in Steinhoff in 2014
Any suggestion to Mr Wiese that his moves to diversify the business from South Africa over concerns about the country are given short shrift. “There’s no one-way bet on the rand, so that has certainly not been a driving force in my decisions. It’s simply a case of we need to grow, we need to create opportunities,”; he said last year.

The acquisition of Pepkor gave Steinhoff a foothold in the UK’s discount retail market. Pep & Co has 50 stores and plans a further 20, while Steinhoff also owns Cargo, Harveys Furniture, Bensons for Beds and Sleepmaster. Put those together with Poundland, which also owns 99p Stores, and Steinhoff could be close to gaining the place on the high street Mr Wiese has been battling for.

However, learning from its previous failures, the company has not taken any chances. It bought a 15 per cent stake in Poundland on Tuesday for about £80 million to ensure that it is in the driving seat this time.

[henley2] 16/6/2016 08:31

Surely, Steinhoff must mean business here having acquired a near 23% stake in the company.
Poundland are a sitting duck. Poor results, botched takeover and the new CEO doesn't take up his position for another 2 weeks. Only question is at what price?

[clocktower] 16/6/2016 08:13

If it were not for this potential offer where would the share price be headed following today's update and figures?

[aishah] 15/6/2016 22:34

12 mth revs to 27 Mar 2016 of £1310m against a mkt cap of £537m. Can't see large stakeholders selling out at current price of less than 0.5 rev multiple. I might re-add. Wouldn't be surprised if we get nearer 250p. dyor

[philanderer] 15/6/2016 22:20

Yep , ditto AISHAH.

Credit Suisse on FT Alphaville this morning were speculating an all cash offer at 235p or just above may well get a PLND board recommendation for acceptance :-)

[aishah] 15/6/2016 22:09

I'll take 230-240p

[philo124] 15/6/2016 22:03

cash, nice.

[philanderer] 15/6/2016 21:33

Evening ct , evening PHIL , it beats me . Maybe it`s because I posted up that Liberum note with a 160p target ?

But if anyone cares to look back to this morning's posts I also put up...

Peel Hunt 'buy' and 300p target and a link to Credit Suisse's 'outperform' and 235p target in the FT

C'est la vie ;-)

Anyhow here`s tonight's RNS from Steinhoff....


("Steinhoff" or the "Company")

Statement Regarding Possible Offer for Poundland Group PLC ("Poundland")


The Board of Steinhoff confirms that it that it has acquired 61,212,467 ordinary shares of 1 pence each in Poundland (the "Shares") which represent 22.78% of Poundland's issued share capital.

Further to this morning's announcement, Steinhoff confirms that any possible offer for Poundland will be made in cash.

There can be no certainty that any offer will be made and a further announcement will be made as appropriate.

In accordance with Rule 26.1 of the Code, a copy of this announcement will be published on the Company's website (hxxp://www.steinhoffinternational.com) by no later than 12 noon on 16 June 2016.

[clocktower] 15/6/2016 20:38

She-ra how do you come to that conclusion? Which seems to me to be complete trash, I regret to say to you.

[she-ra] 15/6/2016 18:29

Clinging onto what a broker says. Like they aren't doing what the Mail did before this bid.

Good luck trying to close that short philanderer