Walker Greenbank Share Discussion Threads

[robot ic1] 12/4/2019 09:14

Debsdowner , I see it hammering up ,

sticky stuff increases the population as well.

[essentialinvestor] 11/4/2019 23:19

WGB got down to 7.5 pence in the financial crisis.
I doubt we will see near that level again, however forecasts for
the year ahead appear to estimate another double digit fall in both pre tax and EPS.
At least they have managed to reduce net debt following the C&C acquisition
(Small net cash position at the FY).
The brands have some intrinsic value as evidenced by licensing royalties.
A large part of the valuation rests on whether the new CEO can grow revenue
as more consumers purchase online, rather than in store.
It may be worth keeping in mind that profitability is falling outside of
a recession. That could indicate a more secular rather than cyclical issue atm.


I've been cautious here since £2.32 a share,
as per previous posts.

[robot ic1] 11/4/2019 08:59

Debsdowner , I like the sticky stuff ,

Hammering this week .

I think this has found the bottom , and there is only 1 way now , its up .
The chart shows this as well

research is always best done by oneself

[essentialinvestor] 10/4/2019 13:16

Brookbroker, in terms of the strength of WGB brands, think it's fair to use
CFX as a comparison. It's probably the closest listed company to WGB.
If you read the recent CFX statement, it's a bit different to WGB numbers posted today.

[essentialinvestor] 10/4/2019 12:43

I mentioned last week migration to online buying in retail
may be making it more difficult for their brands, and today's
statement appears to accept this, referring to their markets as rapidly changing.

It's on a watchlist for me and perhaps their brands are worth more to someone else?.

The annual pension contributions in the pension deficit recovery plan are worth noting, that's a large annual multi year amount.

Dulelm today shows it's not all doom and gloom in the housewares sector, ahead
of expectations trading statement.

[bookbroker] 10/4/2019 12:36

Deluxe in a hugely competitive market with paints, so many own brands now, comparisons between paint and paper similar to pork and lamb! Can save money printing rolls of paper by doing it to order, the company is a play on the feel good factor like most things, its brand names and styles do offer some insulation at the top end of the market!

[debsdowner] 10/4/2019 12:08

robot

Trading a bit sticky here as you well know. Some of the stuff they sell needs to be put on by specialist decorators in short supply so the costs goes up. With the economic uncertainty it will prove difficult here.

What I have heard on the grape vine from a reliable source is Dulux paints been reducing their prices which means trading tough.

Small companies like Walker Greenbank will suffer more in a downturn. There is a limit to cost savings.

Wallpaper manufacturing high tech now hundreds if not thousands of rolls can be printed in hours so little labour costs.

The company will have design team of probably half a doze people or even less so they cannot make any real savings there.

It's difficult to work out how much a they could save tightening up to save coasts.

A severe reduction I sales will hit the bottom line harder and a higher sales up tick will assist the bottom line higher.

On balance I feel there will be less sales than higher sales so more profit falls going forward.

WGB is not a shorting share its too small.

Unless you see significant director buys its best to avoid imo.

[essentialinvestor] 10/4/2019 11:24

I mentioned that at the time.

Dunelm have a ahead of expectations statement today, so it's not
all doom and gloom. Although a retailer, they have overlapping markets with WGB.

Dunelm are almost exclusively UK from memory.

[bookbroker] 10/4/2019 11:15

As is often the case the Clarke and Clarke acquisition most probably overpaid, hindsight easy, thankfully paid with stock!

[bookbroker] 10/4/2019 11:05

As I said do you really think people buying the houses they build now, with all the paint thrown in buy Sanderson wall paper at £60 a roll, the fact their markets are down in the UK probably attunes to the fact that the upper end of the housing market is weak, not the kennels TW, PSN, etc build! Wall paper may be a bit passé, but this has been through cycles before, I would not necessarily say it is over-valued, the market will decide that, I’m not in the game top diss companies for their product, more for the people running them, John Sach would have been one of the longest serving CEO’s in the FTSE All Share, the new woman probably better suited to the current job!

[robot ic1] 10/4/2019 10:56

Let me introduce myself , I am robot . now thats out of the way ,down to business

I believe the share price will hammer up.

Always do research on your research already done .

[owenski] 10/4/2019 10:55

'Best brands', lol, best brands that are in a sales decline.

Doesn't matter how 'best' stuff is if it aint selling.

[essentialinvestor] 10/4/2019 10:44

Best brands in its category, On what basis do you make that statement?.

Have you read the full report?.

Brand sales in the UK, their largest market, were down - 6.5%.

We currently have, as you pointed out, a robust housing market,
so this result is with a supportive macro backdrop.

[gswredland] 10/4/2019 10:38

At last some sensible comment bookbroker - well done
I was surprised the dividend was cut as it was very adequately covered but this has not really impacted share price

[bookbroker] 10/4/2019 09:07

Construction, don’t be stupid, home building at all time high, and this company does not cater to the dog kennels that Persimmon build, you were carping on the Deb. thread, stay there, you are better suited to that, this is a quality company with the best brands in its category, should push the Far East and emerging markets exploiting the history and reputation of the product!

[debsdowner] 10/4/2019 08:56

Owenski,

Seems we both called this right as well. I have a good understanding of retail and the company going to struggle.

They are affected by both the construction sector, and retail spend both grim at the moment.

Always be careful going for a higher yield the higher the yield spells trouble and its usually not sustainable.

[essentialinvestor] 10/4/2019 08:37

I mentioned sustainability of their dividend last week, and it's been cut already.
The pension recovery plan payments are worth noting.

It's a question of assessing their brands value in the context of a rapidly changing retail market.
They may be able to navigate this environment successfully under
the new CEO, let's see.

Wider macro has been supportive over the past few years, and that may be more
challenging over the next year or two.

[bookbroker] 10/4/2019 07:53

You could be right, the price reflects to an extent the uncertainty, they have well-known, desirable brand names in household products, at least the balance sheet is in pretty good shape!

[new life] 10/4/2019 07:49

Still ProfitableStill a good dividend1.7m cost of re-organising in thereNow depends on whether the new people get and are actually capable of quick turnaround,real results (not just talk and spending). Pension issue is a concern.Lack of sales in any market is worrying as if product and team any good buyers can be found should (at cost of competitors sales).Kingfisher one shows long, costly reorganising of everything benefit everyone up top (salaries and pensions) whilst business goes nowhere and shareholders suffer.Think bad news is in price,hopefully!

[owenski] 10/4/2019 07:24

Strategic review it is then.

So, the wheels are coming off and they need lots of new people with new ideas on what to do about it. Meantime they claim to be on top of things although sales and profits are declining and they have limited control over that, they're going to focus on the things they can do which is - count the number of pencils in the stationery cupboard and count how many rolls of wallpaper remain unsold in the factory.

Maintaining Div. ratio.... That's a positive, hang on, that sounds like a euphemism for a divi cut. Oh, it is.

25% down on UK profits, further deterioration to come I suspect.

Lots of puffery and grand statements to mask the poor situation.

I suspect it could be top up time yet again for a certain individual. lol

[essentialinvestor] 10/4/2019 07:18

Dividend cut.

Outlook ... uncertain.

[essentialinvestor] 09/4/2019 18:42

They update tomorrow from memory. It's the outlook statement to watch.
Some type of strategic review would not surprise me, to try and maximize
brand value.