Somerfield Share Discussion Threads

[blunderbuss] 31/1/2005 16:59

Many thanks kingdwg, I was hoping it was something like that - no implication of price manipulation then?

[kingdwg] 31/1/2005 16:42

Auction result was outside percentage tolerance from last trade so an extension is allowed to settle inside the range. 2 extensions are allowed but you can see which way the pressure was by the close price!

[blunderbuss] 31/1/2005 16:39

Who knows what a "price monitoring extension" is please?

[chester] 31/1/2005 13:26

H - Thanks for the update. You might want to edit your post to 154p rather than 54p on Wednesday/Thursday.

[hatman] 31/1/2005 13:22

SOF is nearing the top of wave (i) of (v) which make up the larger wave 3 of 3 of 5.

This present action should peak in the 158p area.

Then, SOF should exhibit an ABC correction. This correction should retrace 38.2% by price and time, giving a taget for a wave (ii) low of 154p on Wednesday or Thursday.

This low should coincide with a move to new lows on the US markets.

Then, SOF will enter wave (iii) of (v). That wave should be at least equal to wave (i) or extend to 1.618 times wave (i) giving price rise targets of 10p to 16p or 164p to 170p area.

[faxxer] 31/1/2005 11:17

Hi y'all

I am in Javea, Spain until Wednesday. The waves here are not high enough to cause concern. However, the sun shines every day and melts the snow and hail that have been the subject of TV news reports.

I am still in PIV in a big way. I was thinking of repurchasing those sold at around 4.00p as SOF are looking more solid now.

I am still in Ramco (ROS) and have increased as I became more confident of their survival. News today (2Feb) shows the company has more irons in the fire and some confidence.

better go and soak up a few more negative ions myself - cheers

[alexei1] 31/1/2005 10:25

Hi folks.

D'y recon that if SOF shut up shop, and leased out their property, they might make more money?

That could be the way to go, morph SOF into a property company!

;-)

A.

[bigface] 29/1/2005 08:59

Hi Kingdwg - delight sof is off the recent bottom. No holding but still keen on those assets!!

I am into wby and gwp. wby is looking like a target from psn imo who has the cash to buy wby outright - makes economic sense for psn if you look at all the facts - a solid property play with a relatively low PE and good divi if a bid doesn't happen. All the best. GWP is a an interesting speculative play of which I hold a fair chunk!! - UK approval of its drug Sativex (after the election - if at all) would put the shares back towards 200p in my view.

All the best

Bigface.

faxxer - PIT is heading for the minimum price scenario 3.25 ( assuming a propretty out price om 6m ) Whats your view on this are u still holding PIT - wondered if we could get it for 3.25 may weigh back in

[kingdwg] 28/1/2005 08:28

I have to admit you've lost me in the waves but I did buy a few more a week or so ago so I hope you're right.
faxxer. Love the movie.

[hatman] 28/1/2005 05:47

SOF: appears to have entered wave 3 of 3 of 5. Specifically we are in i of 3 of 3 of 5. Time ratio calculations suggested that wave 2 would produce a decline to 149p on January 25th; the actual low was on January 26th at 148.5p. Now SOF has popped upwards; there is no volume yet but that will come as the stock rises and institutions continue to rotate out of TSCO and into SBRY, SOF and MRW.

Wave 1 of 3 of 5 was the rise from 125p to the intraday spike at 167.5p, or an overall gain of 42.5p. We can expect wave 3 of 3 to be at least equal to wave 1 or a further 42.5p giving a price target of 191p or 24% up from last night's close.

Often wave 3 is the longest wave and may extend to 1.618 times wave 1; if this happens the price rise target is 68.7p and the price target 217p.

Now, as wave 2 of 3 was a sharp correction, wave 4 should be a flat or triangle, so it would be worth sitting with long positions through wave 4 and into wave 5 (of 3). If wave 3 is equal to wave 1 at a price of 191p and the triangle apex is close to this figure, we can expect wave 5 to truncate to 38.2% of wave 1 or a last pop of 16p to 207p. If wave 3 extends, wave 5 should be equal to wave 1 giving a much higher target in the 259p area.

So it seems to me that here is a situation where one can remain long until price targets are reached and/or the shape of the advance confirms one wave form projection or another. The minimum price target for 5 of 3 (of 5) is 207p and the maximum target 259p giving potential gains of between 35% and 69%.

Even then these are only the targets for the top of wave 3 of 5 and the ultimate top of wave 5 of 5 should be much higher.

I am long and added again yesterday at 153p.

[spob] 25/1/2005 18:38

Price 150.75p
Change Today -0.25p
Volume 5,345,825
24-Jan Close 151.00p
Shares Issued 540.67m
Market Cap £815.07m
Year End 24-Apr

What The Brokers Say
Strong Buy 0
Buy 3
Neutral 4
Sell 1
Strong Sell 2
Total 10


Fundamentals
Year Ending EPS P/E PEG EPS Growth Dividend Dividend Yield
27-04-2001 (1.00)p n/a n/a n/a n/a 0.00%
27-04-2002 5.50p 27.45 n/a n/a 1.00p 0.66%
26-04-2003 6.30p 23.97 1.65 +14.55% 1.65p 1.09%
24-04-2004 11.40p 13.25 0.16 +80.95% 2.20p 1.46%

Forecasts
Year Ending EPS P/E PEG EPS Growth Dividend Dividend Yield
30-04-2005 11.57p 13.05 0.39 +33.55% 2.56p 1.66%
30-04-2006 14.25p 10.60 0.37 +28.46% 3.24p 2.10%
30-04-2007 16.20p 9.32 0.65 +14.29% 3.21p 2.08%

Profit & Sales Forecasts
Year Ending Profits (£m) Sales (£m) Sales/Share Price/Sales per share
30-04-2005 62.57 4,622.34 £8.55 0.18
30-04-2006 77.05 5,347.85 £9.89 0.15
30-04-2007 87.59 5,336.77 £9.87 0.15

[spob] 25/1/2005 18:30

Somerfield reports Christmas sales drop

Mark Tran / the Guardian
Wednesday January 19, 2005

The supermarket group Somerfield today issued lacklustre Christmas trading figures as it reported a drop in sales over the festive period.
Like-for-like sales in the 10 weeks from November 6 fell 1.2% at the group's Somerfield chain of stores and slid 1.6% at its budget Kwik Save shops, it said.

The investment bank Dresdner Kleinwort Wasserstein lowered its profit forecasts for the food retailer after the trading update, citing tougher trading conditions.

"Somerfield reported a solid set of numbers. However, a toughening trading environment - as witnessed by a slow start to the second half - prompts us to downgrade our current year pre-tax profit forecast to £57m," analysts wrote in a research note.

The bank previously expected Somerfield, which owns 1,224 outlets, to deliver pre-tax profits of £60m in the current year.

"Over the Christmas to New Year holiday period, like-for-like sales were adversely impacted by the timing and incidence of bank holidays compared to the previous year, reduced focus on electrical non-food sales and reduced trading hours in certain stores," Somerfield said.

The group's chief executive, Steve Back, said he expected to bring second-half like-for-like sales back into positive territory.

"It should be similar to what we achieved in the first half," he said. First-half sales were up 0.9% at Somerfield and up 0.1% at Kwik Save.

"It's a competitive environment out there but I'll concentrate on delivering small growth in a market that is not growing at all," Mr Back added.

Somerfield is up against the likes of Tesco and Wal Mart-owned Asda in the cut-throat supermarket sector. In order to compete, Somerfield is closing marginally profitable Kwik Save outlets and converting others to the Somerfield brand to try and win more customers.

Focusing on smaller, more profitable outlets, Somerfield bought 114 Safeway convenience stores last year as it repositions itself as a convenience retailer. All 114 stores will be converted to the Somerfield name by February.

The purchase of the Safeway stores has added some 108,000 sq metres (1.2m sq ft) to Somerfield's retail space, allowing the company to focus on the convenience market, one of the fastest-growing areas in the £23bn food retail industry.

UK shoppers spend about 20% of their food and drinks money at such stores, according to Datamonitor, the research firm.

"A major transformation has taken place," Mr Back said. "We refitted more stores, converted 68 Kwik Save stores to the Somerfield fascia, developed the convenience business and closed underperforming sites."

First-half profit fell 15% as the supermarket took a charge for closing some stores. Net income fell to £15m in the 28 weeks to November 6, from £17.6m, a year earlier.

[spob] 25/1/2005 18:01

24/01/05 - 16:13

Somerfield plc

Somerfield plc announces the following directors' dealings in its ordinary 10p
shares ("shares").

On 24 January 2005, Katie Bickerstaffe exercised 267,326 share options at £1.01
and subsequently sold 242,326 shares at £1.51 mainly to cover the purchase
price for the options, tax and dealing costs, retaining 25,000 shares. Katie
Bickerstaffe's total shareholding following this notification has increased
from 7,500 to 32,500 shares representing 0.006% of the share capital.

On 24 January 2005, Gordon Wotherspoon exercised 475,247 share options at £1.01
and subsequently sold 435,247 shares at £1.51 mainly to cover the purchase
price for the options, tax and dealing costs, retaining 40,000 shares. Gordon
Wotherspoon's total shareholding following this notification has increased from
20,000 to 60,000 shares representing 0.012% of the share capital.

[spob] 25/1/2005 18:00

19/01/05

LONDON (AFX) - Britain's fifth-biggest supermarket chain Somerfield PLC said
sales fell over Christmas after its stores opened for fewer days than the year
before and as bigger rivals cut prices.
Shares fell 2.5 pence, or 1.6 pct, to 151.5 pence by 11:15 am, valuing the
business at 820 mln stg.
The fall in the share price came despite Somerfield, in the third year of a
five-year recovery programme, simultaneously reporting a forecast-busting 80 pct
rise in half-year profit.
Group sales fell 1.4 pct in the 10 weeks to Jan 15.
The figures follow mixed results from rival British supermarkets amid signs
that consumers, concerned by rising interest rates and falling house prices,
have been growing more price conscious.
Market leader Tesco PLC delivered strong festive sales Tuesday, though
others, such as J Sainsbury PLC and William Morrison Supermarkets PLC -- the
third and fourth biggest chains respectively -- have reported sluggish sales.
Somerfield, which runs 1,337 outlets under the Somerfield and Kwik Save
banners, said sales at the former outlets fell 1.2 pct in the same 10 weeks
while Kwik Save sales declined 1.6 pct.
"As reported in November, the competitive environment, deflation and less
discretionary spend, continues to impact the high street... with trading...
remaining challenging," the company said in a statement.
Chief executive Steve Back downplayed the significance of the decline, which
he said was largely driven by the fact that the company's stores were open on
average one and a half days fewer than in the same period a year earlier.
In a telephone interview with AFX News he said same-store sales actually
rose by about 0.6 pct when stripping out that impact.
But his comments failed to assuage financial analysts.
"We warned on Monday that this was a risky stock to be holding at present
and this trading update backs up this view," said Numis analyst Iain McDonald.
Back, however, went on to argue the figures should be viewed in the context
of the "massive" churn of the company's retail estate.
He said Somerfield, which last year agreed to pay Morrison 260 mln stg for
114 Safeway stores, had already converted 44 of those stores into the Somerfield
fascia.
On top of that he said the company had bought ten other stores as well as
converting, refitting or closing a further 193 stores, nearly 15 pct of the
total.
Profit before tax and exceptional items rose to 27.9 mln stg in the 28 weeks
to Nov 6 from 15.5 mln.
That outstripped market expectations, analysts having forecast interim
profit of around 22 mln stg after Somerfield in November said like-for-like
sales rose just 0.6 pct in the first half.
The company, which is forecast to deliver full-year underlying profit of
around 60.5 mln stg, has been struggling to hold on to customers in the face of
aggressive price cuts by bigger rivals such as Tesco.
"It would be a fool of me to say we can match them because they're so much
bigger than we are, but we're conscious we have to remain competitive," Back
said.
Market researcher Taylor Nelson Sofres estimates Somerfield's share of the
roughly 80 bln stg Britons spend each year in traditional supermarkets shrank to
5.5 pct in the 12 weeks to Jan 2 from 6 pct a year earlier.
Faced with government restrictions on new out-of-town sites, Tesco and
Sainsbury have been snapping up convenience chains in recent months, applying
extra pressure on Somerfield whose stores are mainly located in town centres.
Back is vowing to fight back by acquiring extra convenience outlets in the
coming months, though he stopped short of identifying potential acquisition
targets.
The interim dividend was hiked 25 pct to 0.75 pence per share.

[faxxer] 24/1/2005 12:30

Adam seems to be losing weight this year in spite of his preference for investigating food factories!

[banjosinger] 20/1/2005 21:27

Market share is not the main worry, look at Phil Green of BHS and Arcadia, sales have been flat for almost two years, but look at what profit he has dragged out of the stores. Now look at Somerfield they are predicted to hit £60M profit this year that is still just over 1% margin, their is still plenty of room to increase this to 2% and even 3% cannot be out of the question longer term, this would equate to a profit of £150M, even if the sales line didn't move, a possible market cap of 1.5B - 1.7B and a share price of £3.00-£3.20.

[303hound] 19/1/2005 18:14

the absorbing of so many new stores together with sorting out of Kwick save is obviously going to take time in the light of which the latest accounts seem to me to be very good...in addition why are all the large supers buying and opening convenience stores which surely must make sof very cheap

[dawntrader] 19/1/2005 08:56

losing market share is the worry though... it will be hard to maintain profits with a decreasing market share... only way to protect profit would be to increase prices ... therefore not being price competative.... looks strange that the price is falling although looks to be more buys than sells.??

[meenan] 19/1/2005 08:09

As the syaing goes 'it was in the price'. Fairly good results and the price falls.

Let's hope we see a bit of a rise over the next few weeks.

Operating profit before exceptional items was ?32.7 million compared with ?17.2
million a year ago - a 90% increase. Profit before tax and exceptional items
improved by 80% to ?27.9 million. Underlying earnings per share increased 75%
to 5.6p from 3.2p

[kingdwg] 18/1/2005 08:25

Yeh, fine thanks Bigface. Contemplating some more of these before the figures tomorrow.

[bigface] 18/1/2005 08:11

havn't heard from you a while r ok kingdwg?

[bigface] 17/1/2005 22:35

Only probably!!

[faxxer] 17/1/2005 13:48

Quote from the Liverpool Echo (Hargreaves Lansdowne are joining us now :)- )

"WITH 9% of Europe's workforce out of a job, and numerous other factors to be considered, discount broker Hargreaves Lansdown (0117 988 9880) says forecasting economic trends in 2005 is tough.

But shares tipped in its January 2005 newsletter are BSkyB, Rexam and grocery chain Somerfield, which probably holds a property portfolio worth much more than its current share price."