Wh Smith Share Discussion Threads

[philanderer] 11/10/2012 13:22

John , here`s the FT Alphaville guys trying to explain it...

.. Merrill Lynch incidentally retaining their 'buy' and increasing their target from 675p to 725p


But stay on retail....

PM WH Smith?

PM Kate Swann gone, after nine years

BE Hm. And she's done very well

DK WH Smug looked dead in the water when she arrived

PM Yes, was just looking at the longer range chart

BE Yup. On paper, it is a moribund business

PM Stock around circa 250 when she took over

PM Now just off recent highs at 631

PM In the shops its a moribund business

PM Sorry pirce wrong

PM No, 629

BE The strategy - and it's been one that works - is to stop selling stuff.

BE They stopped selling CDs.

BE Then DVDs.

BE Then toys.

DK books next?

BE Many have suggested that ....

BE Vaguely remember seeing a stat that the average WH Smith shopper buys one book a year.

BE Meaning they're not ideal Kindle customers, I guess. Which is a benefit.

DK they mostly buy bottled water and choc bars

DK as far as I can see

BE Two for one on water and huge bars of Galaxy, yes.

BE Along with £2 bottles of Evian at the airport, which is its biggest market.

DK water is lo-cal, so they can "earn" the choc bars, see?

PM Ah yes, outrageous taht

BE Captive market. Same as Restaurant Group.

BE Invest in exploiting barriers to entry and you don't have to do much else.

DK anyway, it's worked for Ms Swann

BE Note more cost savings in today's statement.

DK although I'd be nervous about the chances of someone repeating it in the next nine years

PM (Baz - all i can suggest at this point is logging out and loggingback in again) sorry

BE Yeah, they're already cutting deep. Don't sales staff also vacuum the floors?

BE And aren't staff incentivised (by which I mean paid) on how many Galaxy bars they shift?

BE (Please note both of those were phrased as questions.)

BE Anyway, here's long-term fan Merrill

BE
WH Smith has reported FY12 PBT of £102mn, slightly ahead of our £101mn
estimate, due to lower central costs and DPS of 26.9p (+20% yoy) well ahead of
our 25.8p estimate. WH Smith has also announced that its CEO Kate Swann is
standing down in June 2013 to be replaced by Steve Clarke. He also has a very
strong track record and we would expect him to continue with the current clear
and effective strategy. Valuation is undemanding and we maintain our Buy rating
with a new PO of 725p (up from 675p) based on the average of an SOP and DCF.

BE
Travel EBIT was up +11% yoy to £63mn in line with our forecast. Gross margin
was +160bp yoy, driven mainly by mix. In the UK 35 units were opened and we
expect a similar number to open in FY13. Internationally WH Smith now has 101
units opened or agreed, including 21 announced today and it has also recently
acquired a business consisting of 5 hospital cafes in Australia.

BE
The High Street business achieved EBIT of £54mn (+4% yoy) again in line with
our forecast, with gross margin up +120bps owing to mix, better buying terms and
improving sourcing and markdown management. WH Smith has identified a
further £12mn cost savings, making a total of £25mn over the next three years,
including savings from energy efficiency, self-scan checkouts, IT and logistics.

BE
Steve Clarke has worked with Kate Swann to develop and execute the company's
clear strategy, of growing its Travel business (5 yr CAGR in EBIT of c.12%),
strengthening the High Street offer and returning cash to shareholders (£377mn
over that time with a further £73mn to come in FY13). He has a strong team
around him, with Group FD Robert Moorhead taking on an additional COO role,
and we don't expect major changes in strategy over the next few years. WH Smith
offers double-digit EPS growth and trades on a cal. 13E P/E of just 9x.

Reiterate

Buy, and we would see any near-term weakness as a good buying opportunity.

[johnwise] 11/10/2012 11:41

Kate Swann to leave WH Smith after nine years at the helm

"Other than the occasional magazine I buy nothing in there. I would not pay the extortionate prices they ask for most of their goods
Swan has done the classic hatchet job on Smiths. Prune the number of branches back offload parts of the business , cut staff numbers and put up prices. It works in the short term but she has done nothing to make Smiths viable in the medium to long term. Its core market of Newspapers and magazines and books is in rapid decline. She is going before Smiths notice that the business is in trouble."
Almost everything WH Smith sells can be bought on the Internet at a discount
Last years Which report W. H. Smith was awarded first place for the worst retail store service."

See comments at bottom of page

.

[philanderer] 11/10/2012 11:12

Agreed guys , needed a pull back and consolidation.

So far today...

11th october Numis hold tp 650p
11th october Peel Hunt hold tp 600p
11th october Investec buy tp 690p
11th october Panmure hold tp 584p
11th october Seymour Pierce buy tp 720p
11th october Oriel reduce tp 450p

[deanroberthunt] 11/10/2012 09:19

maybe a case of the share price overunning the news...

[spob] 11/10/2012 09:17

can't say the share price has not moved up with events recently

470p in june up to 665p, + 41.5%

[philanderer] 11/10/2012 09:05

Swiftly followed by Seymour Pierce who reiterate their 'buy' and increase their target price from 680p to 720p

[philanderer] 11/10/2012 09:01

Oriel unchanged ;-)

11th october Oriel reduce tp 450p

[deanroberthunt] 11/10/2012 08:56

without the board change this would probably have been up.

[retsius] 11/10/2012 08:52

Agree deanroberthunt. She has been a very steady hand at the tiller. I couldn`t understand why the sharp drop until I read` Board Change`.
Disappointing after all the build up before the results.

[deanroberthunt] 11/10/2012 08:44

Well results beat expectations.....Kate leaving has spooked the market though, plus maybe a case of buy the rumour sell th fact.

[spob] 11/10/2012 08:40

who has tempted Kate

that's what i'd like to know

or has she had enough of the corporate jungle

[philanderer] 11/10/2012 08:39

Bought them back at 606p.

We`ll see how it goes :-)

[philanderer] 11/10/2012 08:28

Well I didn`t expect that this morning , stop taken out :-O

she was one of the reasons I invested here - hey ho

[philanderer] 10/10/2012 20:01

Full year results from WH Smith could see the newsagent chain announcing pre-tax profits of £100.3m on sales of £1,248m, according to broker forecasts.

Kate Calvert of Seymour Pierce is predicting an improvement in the retail LFL sales trend in the fourth quarter (Q4) from the fall of 4% in the third quarter.

"The focus will be on an update on the Travel, the driver of growth, and progress internationally winning contracts and how confident management are feeling about High Street's prospects in the run-up to Christmas. Certainly, it feels as if the book publishing schedule is stronger this year with '50 Shades' having a positive benefit on Q4 LFL sales and JK Rowling 'The Casual Vacancy' as well as a better selection of cookery books," Calvert predicts.

[philanderer] 08/10/2012 11:20

8th october Seymour Pierce buy tp 680p

reiterates

[philanderer] 08/10/2012 09:21

These numbers are really being built up :-S

'WH Smith shrugs off the economic malaise as profits set to hit £100m'

Read more:

[philanderer] 07/10/2012 09:34

"Conflict in the east, crisis in the eurozone. But all's well at WH Smith"



'WH Smith set for Fifty Shades boost'

Blockbuster erotic novel Fifty Shades Of Grey is expected to have helped retail chain WH Smith deliver a rise in full-year profits when it reports results on Thursday.

Phenomenal demand for author EL James's racy book - the biggest seller in Britain since records began - and other copycat "passion" books have helped buoy sales for the group's 600 high street stores.

WH Smith said in August that results for the year would be at the top end of City expectations after seeing improved profit margins at both its high street stores and travel arm, which runs nearly 600 stores in airports, railway stations and motorway service areas.
Analysts are now expecting profits to rise nearly 8% to £100 million in the year to August 31 from £93 million a year earlier.

Under the leadership of highly regarded chief executive Kate Swann, WH Smith is benefiting from selling more higher margin books and stationery and fewer CDs and DVDs. Its travel business is also making good progress, helped by opening stores overseas.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said the market will be keen for more news on the international business and take-up of its Kobo reader, which it recently launched to compete with Amazon's Kindle.

UK PA

[philanderer] 05/10/2012 20:06

Evening Mark, maybe in some peoples` eyes they`re still not that expensive ? ;-)

Dividend still at 4%+

Next week brings a few choice updates from important sectors.

WH Smith (LSE: SMWH) is due to provide us with preliminary full-year results on Thursday, and the signs are good. At the time of the company's pre-close update in August, we were told to expect results at the upper end of current forecasts. High-street business is focusing in margins and cost-cutting, and the Travel division is doing well despite the depressed economy.

The share price has stormed up to today's 656p from a low of 472p in June. But even after that near 40% rise, the shares are still not looking that expensive -- latest forecasts suggest a price-to-earnings (P/E) ratio of under 11, with a dividend yield if 4.1% expected. The dividend should be well covered, and the firm's pre-close update suggests we can have confidence in it.

[markgahagan] 05/10/2012 18:59

I realise that SMWH is considered good value in terms of it's current growth rate by PEG enthusiasts but it is at or near a major high and they are buying back their own shares. Aren't they supposed to do that when the shares are cheap?

[philanderer] 05/10/2012 11:33

"UK consumer spending 'rose in September"

[philanderer] 05/10/2012 11:22

The Times...

Bet of the Day: Spread betters were buying W H Smith ahead of preliminary results on Thursday. Punters backed the retailer to deliver robust sales and further cost-cutting. Citi became the latest broker to turn more positive, describing W H Smith as a strong company in a weak sector.

[philanderer] 05/10/2012 09:41

5th october Seymour Pierce buy tp 670p

reiterates

[philanderer] 03/10/2012 16:48

UT @ 645.5p