Walker Greenbank Share Discussion Threads

[barnesian] 14/10/2020 08:12

I've just topped up on WGB at 60.9 based on fundamentals (and also that Stockopedia have it on a StockRank of 93).

Top-end furnishing design including fabrics and wallpaper is a strong growing market.

WGB have an excellent management team with an innovative approach and is very well placed in this market with valuable assets in brands and designs.

Financials look good.

I think this is a sound investment with a lot of growth potential.

[netcurtains] 14/10/2020 08:11

pireric: Thankyou for all your detailed information. Many lurkers and writers found your synopsis of results and forward info very good!

The downside of course is the summary RNS (see ADVFN news) is no where near as good as the full results information. So its going to take a while for the good news to sink in.

[studentinvestor13] 14/10/2020 08:05

I cant get a buy quote to top up on aj bell

[pireric] 14/10/2020 07:55

Investec upgraded numbers

This year revenues move up from £78m to £89.9m. EBITA up to £1.3m from -£5m

Next year revenues up to £102m from £97.5m. EBITA up to £6.8m from £6m.

Next year EPS forecast now 7.3p per share compared to 9.3p last year and 13-15p delivered a couple of years back.

I suspect this is still the early innings of an upgrade cycle to EPS here

Eric

[netcurtains] 14/10/2020 07:18

s34icknote: its a bit more than that - its a whole new corporate structure - gone is WGB and born is Sanderson's Design... Going (over time) will be the old books of wallpapers and fabrics and born will be the new digital, fast pace catalogues..

[barnesian] 14/10/2020 07:16

"better than expected but cautious" sums it up.

I also agree with Eric that the new management seem to know what they are doing. I know the Chairman and have a great deal of confidence in her abilities and that of her team.

I like the change of name to "Sanderson Design Group plc" and the simplification of the structure and branding.

The restoration of salary levels back to 100% and almost all employees back at work is a good sign.

Holding back on the interim dividend is also sensible in the circumstances but might weaken the share price in the short term.

[s34icknote] 14/10/2020 07:12

Basically break even point even with lock down effect !!So not going bust . Can cope with normal trading resumedShould be better figures second half

[studentinvestor13] 14/10/2020 06:47

V shaped recovery with revenue up for August and September for those with a monocle!!

Fab and cheap. Should be double the price

[pireric] 14/10/2020 06:43

Other pointers from reading
- core licencing was only -7% compared to the approx -10% flagged in the HY trading update
- £3m cost saving programme is fairly meaty given the historical profitability of this business. Thats over 2.5 points of operating margins if they can get those savings sticking
- due to strong performance, repaying employees 20% reduced salaries introduced during covid ex directors and leadership team. Suggests to me they are quite confident moving forwards
- "The new name will become a platform to elevate the group's brands and other assets" talked about 50000 historic documents being opened up to industry and monetised
- imminent refresh of websites coming
- all future launches will have a 4 week digital pre launch after the positive experience from Ben Ps collection and the Book of Little Treasures

I come away reading this as a lot more confident in where new management are taking this business.

Eric

[netcurtains] 14/10/2020 06:33

I have zero idea if these results are better, worse or the same as expected but it does appear they did gain from DIY boom as they state:

-- Better than expected trading performance in July, August and September 2020; given the ongoing impact of Covid-19, the outlook remains cautious at the start of the autumn selling period

So the going forward statement is "better than expected but cautious"..

Analysts call later this morning...

[pireric] 14/10/2020 06:28

Results

Revenues down 30.6%, £0.4m adjusted pre tax profit for the first half, inc £3.2m grant income. July +August + September ahead of expectations though still cautious given uncertainties.

We know July was -15% and the 12 weeks to the end of September was only -0.8% so September is probably up decently year over year.

Net cash ex IFRS 15 is £4.5m. seems like they are determined as they were pre COVID to run this business more efficiently and effectively in the future. Group to be rebranded to Sanderson Design Group in December.

All in all, Investec's forecasts need to move higher today and I imagine they will now be profitable for the full year rather than now a £5M EBITA loss even if helped by grants. Given the low starting point in valuation, a more than good chance the stock moves higher than this today.

If they nail the turnaround, no reason they cant get back to 13-15p of EPS from a couple of years ago. And if they dont, im still not seeing why they cant get at least back to 9p+ from last year

Eric

[netcurtains] 13/10/2020 16:07

speaking as web and app developer (so biased) I'd say lot depends on how good a presence their main retailers have on the internet..

The ceo said: "I am excited by some of the initiatives that we've implemented in the first half, including the launch on
23 July 2020 of a Harlequin children's collection using, for the first time, a digital design book in place of a
physical pattern book, with great initial feedback from our trade partners. This digital acceleration will help
our customers with more rapid response, optimised inventory replenishment and the greater agility that
immediate sampling data affords us whilst also progressing the Company's strategic development."

This actually is pretty good:

[salver2] 13/10/2020 15:55

I think these figures are a bit pessimistic-I think their cash retention will be better than expected- or maybe I’m just hoping as I have a lot of shares!

[pireric] 13/10/2020 15:40

Results tomorrow. Expecting headlines to be rubbish as we all know. If brands is down 30% and assuming manufacturing is down 60% for first half, expecting group growth down 36% give or take and maybe a £5-6m adjusted operating loss.

Forward looking statement is what matters and current trading. I am hoping for an improvement on the -15% rate for July. I think the valuation remains compelling in either a NAV basis or a historical normalised earnings basis and could present meaningful upside over time

Current broker forecast from Investec is for revenues of £78m and a -£5m adjusted EBIT loss.

The market is certainly pricing little eventual recovery so anything incrementally positive is helpful even if the outlook will remain uncertain. I continue to like the investment skew here

Eric

[salver2] 13/10/2020 10:58

Indeed maybe your misspelling of Wolverhampton will make it a pound - only kidding!

[netcurtains] 13/10/2020 10:40

salver2: I think 1834 must be a fashionable date - lol...

- All that seems to be noticeable for 1834 was that the worlds first electric car was build (in Wolverhamton by Thomas Parker using high-capacity rechargeable batteries).
I cant see anything particularly notable in paint or wallpaper or furniture that year.

But share price liked 1834 so worth repeating it!

1834

[salver2] 12/10/2020 15:42

Nice but shame they didn’t fact check they have him down as born in 1832 on some slides - he was born in 1834

[netcurtains] 12/10/2020 14:39

WGB have made a really good William Morris video:

[netcurtains] 12/10/2020 14:24

Nice to touch 60p... Be good to be nearer 70p though....

[netcurtains] 12/10/2020 09:25

Thanks - its just that segment of market is doing well so I'm guessing WGB doing well with this 5%-. So perhaps its up to 5% now .
Three of WGBs sites have a Sofa as the cover picture:

WGB corporate site itself and
Zoffany
Anthology

Then the fabrics themselves are sold to cover furniture so I guess
that also counts as part of the "furniture" business.

Do we sell any sofa fabrics to furniture manufacturers?

One would think WGB could get a sales rep knocking on doors and
saying "your sofas would look good covered in William Morris".....

[studentinvestor13] 12/10/2020 09:23

Yes net we are not in the business of building out a lot of furniture. We supply the fabric coverings. I don't know the percentage but wallpaper and fabric is our bread and butter and more and more paint

[salver2] 12/10/2020 09:13

As far as I’m aware a pretty tiny amount certainly less than 5 percent

[netcurtains] 12/10/2020 07:51

Does a more knowledgeable poster than me have a rough idea as to what percentage of WGBs
output is FURNITURE? I suspect its a growing percentage but that is as far as it goes.
Thanks.

[netcurtains] 10/10/2020 08:57

Barnesian: The move by Microsoft to make "Work from home PERMANENT" does mean that the
social and psychological factors behind the DIY boom are here to stay for many
(its not a one year wonder)

[barnesian] 10/10/2020 07:16

Big boom in furniture and furnishings