Wh Smith Share Discussion Threads

[swiftnick] 29/7/2004 20:10

... and don't forget the pension deficit.

[jeffian] 29/7/2004 18:46

Fred,

I'm happy to be lumped in with the "muppetty hordes", but step down from your Masterly pedestal for a second and honour us with an explanation rather than a soundbyte! I think (correct me if I'm wrong) that your position stems from a 'sum of the parts' assessment which works backwards towards the struggling retail business thus -
* current MV = 250m shares in issue x 290p = £725m
* publishing business worth c.£200
* Distribution business turning over £1080m producing operating profit £32m must be worth, I don't know, c.£400m???
* therefore (if I understand right) retail business stands at next to nothing and we're all missing a trick.

Well, are we? Whichever way you slice this cake, it all comes back to the retail business every time and, unless they come up with a retailing formula that makes us go down to their shops and buy, it could, indeed, decline to nothing. Never mind Arcadia, careful, (which at least is in a sector where consumers want to buy if the 'offer' is right), think 'C&A'. It could happen, you know!

If you're making money, Fred, it's 'cos you're trading this one successfully, not because we're wrong about the fundamentals.

Or convince us otherwise,

Your muppety friend,

Ian 8-)

[ydderf] 29/7/2004 14:22

....and shares can go down as well as up......yadder yadder yadder........bought another 30,000 today!

[0238jr] 29/7/2004 09:13

and one could say, the bigger they are the harder they fall. a bigger operation can make bigger losses than a small one

[goliard] 29/7/2004 09:12

Careful, that is a terrible way to look at it. Hoping you can make some of your turnover 'stick' as profit. If margins are too low and costs are too high, it doesnt matter if they turnover 100 billion! Arcadia was entirely different.

[0238jr] 29/7/2004 08:37

down again this morning

[ydderf] 28/7/2004 09:27

careful - i award you the medal of Clarity of Thinking while under pressure from muppetty hordes - only the MASTER (who has been in and out of these three times at a substantial profit - see my complete postings here - since starting the thread) is usually able to think for himself! lolol

[0238jr] 28/7/2004 08:49

looks as though normal service has been resumed. i've been short on these since 319, and it looks to me as though they are still heading down. the initial flurry following the rns has not been sustained.

even for those who are long term holders there may be merit in selling and buying back in lower.

i have a vested interest so fyov

[careful] 27/7/2004 17:57

Almost 3 billion quid goes through the tills every year.

Capitalised at 3 months sales...Green bought Arcadia on three months sales and made a bomb.

keep it simple...if you had 3 billion through your hands in one year you would make sure that at least 100 million stuck as profit.

That would mean a share price north of 4 quid.

Easy money. Buy now.

[ydderf] 27/7/2004 08:39

this is why i am the MASTER and most of you are unable to think for yourselves muppets! lololololol

[0238jr] 27/7/2004 08:39

not convinced by the statement this morning- if it's all so easy why are they in such terrible shape now?

[0238jr] 26/7/2004 15:31

i think the high street side of wh smiths as a retailer is in terminal decline- just can't compete with the larger specialist stores. smith's would never be my first choice for looking to buy a book or cd or indeed anything else.

on the retail front all i think they can count on are "impulse" purchases at stations and airports etc.

just another example of the transformatin of the uk high street.

seems to me this is a temporary staging post on the way back down to 250ish

[0238jr] 26/7/2004 15:25

anyone have any idea why now the bid has collapsed the share price should be any higher than the 250 level it was at pre-bid speculation? a pe of low teens, which is probably about right, would put it right down at that level or lower.

[ydderf] 26/7/2004 11:56

judging from the two way volume, it wouldn't surprise me if there were a hostile bid from elsewhere - after all, the preliminary work has all been done!

[jeffian] 24/7/2004 23:52

Fred,

What's your local branch of SMWH been "transformed" into? A Wetherspoons? I think you've lost the plot on this one - as for comparing it with M&S.....Errrrrm....??!!

You say "the other two businesses where profits are strongly rising". Are you referring to the tiny publishing business (which I think is going to be sold anyway) or the static wholesale distribution business? Neither of these can possibly bale out the massive and moribund retailing business. If you really believe "smiths have high street dominance and will suck business on form all the other stores" you clearly live on a different planet to me!

I know, Fred, that you like to buy bombed out stocks at the bottom. The trouble with this strategy is that some of them don't recover. SMWH is going to be one of them IMHO.

Regards, Ian

[bigface] 24/7/2004 23:25

Thats the way ashtongray -

[ashtongray] 24/7/2004 22:09

ydderF

I know its your thread, but I thought the idea here was reasoned discussions, not cheap jibes.

14/4/04 Bt @ 251.9p
19/4/04 sld@ 341.0p

I make that a gross profit of 35.4% in three trading days. Not too silly imo.

[bigface] 24/7/2004 19:41

I am a value investor but can't see the value in WHS because anything it sells can be bought in a supermarket - OK once but not now - also pension fund is apparently very vulnerable.

I admit I hav't studied the merits completely and if I can see value ydderf I would buy in. Could you help me establish the tangible net assets value per share and shareholders funds? The interims state that these are 497m but don't mention the pension liability figure which will have to be deducted from the 497m?

From the interims 2004

"The balance sheet remains sound with net cash amounting to £28m (2003 - £31m)
and total net assets before pension liabilities of £497m (2003 - £602m).

I make that 198p a shre Net Assets Per Share less the pension liability = ?????

Good luck with it and sorry the bid didn't happen.

[ashtongray] 24/7/2004 17:54

jeffian

Agree completely with your assessment. Apart from the occasional purchase of magazine+paper, other shops locally fulfil all the specialist lines such as books, CDs, DVDs, stationery much better/cheaper, with much more choice.

Furthermore, SMWH is not even a property play since the freeholds are frequently held by others.

Present management has also been notably unable to break the declining trend in recent years. Why should it be any different after an aborted bid?

[ydderf] 24/7/2004 17:34

i'm back in, paid between 278 and 286 for shedloads on friday - this cannot fail now, eps of 36p next financial year and good outlook will have them at £4 before next July...hoping for a really bad press over the weekend so i can buy huge amounts more - meanwhile the local branch has been transformed already!

[jeffian] 23/7/2004 23:12

Well, it's a theory, careful.........

But is it just a question of 'financial tricks'? As a retailer, SMWH has completely lost the plot. Whilst the argument is that any half-decent management should be able to cure that by reverting to good old-fashioned 'retail principles', ask yourself the question "What is the point of W. H. Smith?". As a newsagent, bookseller, stationer, music/film/video/DVD retailer, there are loads who do it better on the High Street and Amazon rips their socks off on the internet. ydderF's original argument was that this was undervalued on a 'sum of the parts' basis, but is this so? Retail may be in terminal decline; wholesale distribution is going nowhere; there is a reasonably robust publishing side but it is tiny in relation to the whole and cannot be the saviour of this group.

Not every great corporate name is capable of recovery. There is an argument that it will just creep along for a year or two then curl up in a corner and die.

Regards, Ian

[careful] 23/7/2004 18:26

bought late today at 2.85 by applying simple logic.

The bid at 371 fell through because they could not get the same pension deal as the company currently has wrt deficit.

bidders must have thought they could make money at 371 if they could solve pension prob.

The bidders are not stupid...how can whsmith be worth less than 282 now they have walked away.?

whs present management can pull all the same financial tricks as bidders.

[ashtongray] 23/7/2004 15:55

If pension fund trustees are going to impose more onerous conditions re topping up underfunded pension schemes on bidding companies compared with the current management, then this will act as a poison pill on this t/o bid, but also on others in the future. Imo this is still one to avoid even with today's price fall.

[calleva] 23/7/2004 15:03

Good advice seems to me. Now What?