Tesco Share Discussion Threads

[diku] 19/2/2017 15:28

If you struggle to make Tesco figures good again then use plan B....do a deal to muddy the figures...buys plenty of time for the insiders to plan their exit route...merry go round continues...

[portside1] 17/2/2017 14:30

MORRISONS TO SUPPORT HOME GROWN FOOD GREAT NEWS

dave lewis still silent waiting for is free hand out .

another 14m shares sold yesterday now they are waiting for 193p to buy back
great having inside info

[portside1] 17/2/2017 13:51

morrisons to support uk farmers buy selling less eu goods going to be a winner

[portside1] 17/2/2017 09:37

rubbish it will take Tesco over 18 years just to get back the 3.7 b via profits from
booker deal its only good for directors and their bonuses .

can not believe the fca HAVE NOT TAKEN ACTIONS ON THE INSIDER DEALINGS BY ADVOSORS TO THE DEAL

[loganair] 17/2/2017 09:14

Booker a plum prize for Tesco CEO By STAFFORD THOMAS:

The fortunes of Tesco, the UK retailing stalwart, are changing, making it one to watch for investors locally and abroad.

For the best part of a decade good news from Tesco (once a firm favourite of many SA fund managers) has been in short supply.

Now things could be changing for the better for the £54bn annual sales UK food retail giant.

Tesco has been battered by falling market share, plunging margins and an accounting scandal. But it is again attracting the attention of some astute SA fund managers and analysts in their personal capacities.

Among them is Neville Chester of Coronation. “Tesco is way too cheap. It is a classic turnaround situation,” says Chester.

Says independent retail analyst Syd Vianello: “It is the reason I bought a few Tescos.”

Tesco is starting to live up to their expectations. It dropped a good-news bombshell on an unsuspecting market in late January, when it announced it had made a £3.9bn bid for Booker Group, the UK’s largest food wholesaler.

Marking Tesco’s first move into wholesaling, the proposed deal has the full backing of Booker’s board. The deal, masterminded by Tesco CEO Dave Lewis.

Booker will bring with it annual sales of £5bn and a distribution network serving 503,000 customers — including independent convenience stores, grocers, leisure outlets, pubs and restaurants.

Booker reported a £155m operating profit in its year to March 2016.

“It makes sense for Tesco to be consolidating its market position in its own backyard,” says Chris Gilmour of Barclays Wealth & Investment Management. He is alluding to Tesco’s disastrous foreign forays, particularly into the US and China. Tesco exited the US in 2013, taking a £1.2bn asset write-down in the process. China was effectively exited the same year when Tesco exchanged its Chinese operation (plus £558m) for a 20% stake in China Resources’ food retail business.

The Booker deal is not without the risks one associates with a move into a new sector, says UK stockbroker Hargreaves Lansdown. But there are also some easy wins, with synergies in distribution and corporate costs, it adds.

Tesco has put some initial figures on the easy wins. They include annual pretax synergies of at least £200m within three years of the deal’s completion.

Financing of the deal, primarily through the issue of new Tesco ordinary shares, has also gone down well with the market, notes Hargreaves Lansdown. Only £770m is to be funded in cash to acquire Booker, which will bring with it £100m cash on its balance sheet and robust free cash flow (net operating cash flow less capex) of £150m/year.

With Booker, Tesco is signalling to the market its determination to move forward after a turbulent period during which pretax profit plunged from £2.8bn in its year to February 2012 to a £5.8bn loss three years later. It was also a period during which Tesco was rocked by a £263m accounting scandal which has led to three former senior executives being indicted on fraud charges.

Booker brings exposure to the fastest-growing segment of the UK food market and should provide Tesco with a useful growth kicker. In a market in which food prices have fallen by about 7% since September 2014, Booker bucked the trend, lifting sales 8.7% in the 24 months to September 2016. Operating profit lifted 19.5% over the period.

By contrast, Tesco has been going backwards for many years. In part it was a victim of its own success, its market share soaring to a dominant 32% a decade ago.

“Tesco reached a point where it could not gain more market share,” says Gilmour.

Tesco’s market share and those of other big-name UK food retailers fell victim to aggressive pricing by German discounters Aldi and Lidl, which have used tough economic times to attract customers in their millions.

Tesco seems to have stopped the rot, with research firm Kantar Worldpanel reporting that in the third quarter of 2016 it gained market share for the first time in five years.

This took Tesco’s share to 28.2%.

In its battle with Aldi and Lidl, Tesco has fared remarkably well, says Gilmour. But it has come at a big cost to its operating margin, which stood at only 1.7% in its past two financial years. Restoring margin is a key focus of Lewis’s recovery strategy for Tesco.

His target is an operating margin of 3.5%-4% by 2020. In this respect, Tesco has much in common with a recovering Pick n Pay, where lifting operating margin is a key focus of its CEO, former Tesco UK CEO Richard Brasher.

Results of Lewis’s strategy are already showing, with broker consensus forecasts indicating that Tesco’s EPS in the year to February will more than double and will rise by about a third in the following year.

For SA investors looking to back Lewis, Tesco is an interesting play, however, Tesco’s share price is already discounting a big recovery, with even a doubling of EPS leaving it on a high 27 p/e.

Some SA managers who once held Tesco are cautious. For Ricco Friedrich of Denker Capital it is a case of once bitten, twice shy.

“The risk/reward trade-off does not make sense,” says Friedrich.

Evan Walker of 36One Asset Management is not as dogmatic. “I would not rule out buying Tesco again but would first need to examine it very closely,” he says.

For investors prepared to accept the risks that come with a turnaround play, Tesco is a share to be accumulated on price weakness. Weakness may come when Tesco faces competition authorities on the Booker deal in a process expected to stretch until late this year and even into 2018.

[temmujin] 16/2/2017 18:05

abit bloody boring this share...what happened to the volatility?

[smartypants] 16/2/2017 16:38

Advfn reports that only 26.2% (now 16.2%) of today's trades were classed as "buys"
Make of that what you will
It appears that buying food is going out of fashion.... fast

[ladeside] 16/2/2017 15:45

Not looking good for them then as it's shooting back to £1.97

[portside1] 16/2/2017 14:39

they now need it to drop to around 193p to buy more back

[portside1] 16/2/2017 14:37

by the time the private investor as news thiese dealers will have made millions .
its a sure winner when you have inside info .

[portside1] 16/2/2017 14:35

this can only happen via the company not issueing information to the public and private investors , in my view I blame teco CEO and directors

[portside1] 16/2/2017 14:32

 
(a) Name of exempt principal trader:
J.P. Morgan Securities Plc
(b) Name of offeror/offeree in relation to whose relevant securities this form relates:
     Use a separate form for each offeror/offeree
Tesco PLC
(c) Name of the party to the offer with which exempt principal trader is connected:
Booker Group Plc
(d) Date dealing undertaken:
9 February 2017
(e) In addition to the company in 1(b) above, is the exempt principal trader making disclosures in respect of any other party to this offer?
     If it is a cash offer or possible cash offer, state "N/A"
Yes
Booker Group Plc
 
2.         DEALINGS BY THE EXEMPT PRINCIPAL TRADER
 
Where there have been dealings in more than one class of relevant securities of the offeror or offeree named in 1(b), copy table 2(a), (b), (c) or (d) (as appropriate) for each additional class of relevant security dealt in.
 
The currency of all prices and other monetary amounts should be stated.
 
(a)   ;     Purchases and sales
 
Class of relevant security
Purchases/ sales
 
Total number of securities
Highest price per unit paid/received
(GBP)
Lowest price per unit paid/received
(GBP)
Ordinary Shares
 
Purchases
 
Sales
4,897,637
 
8,726,047
1.9810
 
1.9805
1.9600
 
1.9595
 
(b)   ;     Cash-settled derivative transactions
 
Class of relevant security
Product description
e.g. CFD
Nature of dealing
e.g. opening/closing a long/short position, increasing/reducing a long/short position
Number of reference securities
Price per unit
(GBP)
Ordinary Shares
Equity Swaps
Long
 
 
 just one of many deals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Short
2,782
452,240
4,195
206
4,125
112,657
186,020
13,147
270,529
16,138
23,083
45,166
246,600
136,710
136,639
430,500
319,919
2,767
128,424
18,963
 
1,622
49
5,445
9,094
1,766
91,101
48,334
6,865
5,528
28,126
117,433
105,495
5,866
66
52,498
1,579
26,480
1.9604

[portside1] 16/2/2017 14:29

cape you have the figs correct . read the rns it tells you who is buying and selling
due to merger .

jp barc citi and now a couple more coming into the frame
its ok to deal if no involvement but one is an advisor that is not right they have knowledge of deal

[capeview] 16/2/2017 14:20

Is it insider dealing or is someone just taking a punt. After all, £650,000 profit each time is a nice pay packet if I worked it out right. Whoever is doing it, might just have set themselves a share price target. Buy at this sell at that. Simple as.

[portside1] 16/2/2017 14:08

THEY WILL BUY BACK AT AROUND 193P .

its great to know the inside info

[portside1] 16/2/2017 14:04

jp and advisor on the deal as once again sold 13m shares at 5p profit
knowning inside info and knows it will push them back down tobbuy back again
were is the FCA ON THIS ISSUE ,

ITS INSIDER DEALING

[vaneric1] 16/2/2017 12:23

I've answered by private message so as to not disrupt Nelly's life any further :-)

[neilyb675] 16/2/2017 11:52

Dean.....riveting, lol

[loganair] 16/2/2017 09:45

Derek Stuart, who runs the £1 billion Artemis UK Special Situations fund, has asserted that Tesco’s acquisition of Booker can be positive for the share price.

In his latest update to shareholders the top investor said that news of the deal is a ‘welcome surprise.

’Tesco announced that it is to acquire Booker, which is a cash-and-carry business, earlier this month.

He continued, ‘Both companies have strong positions in their respective markets and the combined entity should enjoy significant synergies. They will, however, need to get the deal past the competition authorities. Assuming they do, we believe this combination will, by bringing together two of the best management teams in the food business, create value for shareholder.’

Competition authorities may be worried that, as Booker supplies groceries to a number of the convenience store chains in the UK that rival Tesco’s own convenience stores.

[loganair] 16/2/2017 09:44

Nigel Thomas: I don't like look of Tesco-Booker deal.

AXA Framlington's Nigel Thomas, Booker Group's second biggest investor, doesn't understand logic of wholesaler’s £3.7 billion sale.


Nigel Thomas, manager of the £3.9 billion AXA Framlington UK Select Opportunities fund, has questioned the decision of Booker Groupto sell to Tesco.

Although shares in both companies have shot up since unveiling Tesco’s £3.7 billion takeover last month, Thomas, one of Booker’s biggest investors, said: ‘I don't like the look of it and I've actually been selling a few Booker shares because I don't understand it,’ he said.

Announcing the deal two weeks ago, Tesco’s boss Dave Lewis hailed the acquisition as a way of injecting growth into the company’s convenience store chain and making Tesco the UK’s biggest food business.

Investors in the supermarket group have largely accepted the argument while applauding its commitment to resume dividend payments.

However, the deal sparked the resignation of Richard Cousins, Tesco’s senior non-executive director and chief executive of catering group Compass.

Although the merger is partly predicated on using spare capacity in Tesco’s fleet of 3,000 delivery vans, analysts say the predicted £175 million of cost savings represent only 0.3% of combined sales.

The Financial Times described the 12% premium Tesco is paying for Booker an expensive way for it to secure the services of its highly regarded boss Charles Wilson. Wilson, who has overseen a 675% rise in Booker’s share price in the past decade in contrast to a halving in Tesco’s stock, will join Tesco’s main board and is viewed as a potential successor to Lewis.

[neilyb675] 15/2/2017 19:32

vaneric

Thanks for the Hereford building development update.....LoL

[hash tag thegrimreaper] 15/2/2017 19:02

Please share.....

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