Wolseley Share Discussion Threads

[spob] 22/9/2008 21:11

The UK's biggest plumbing equipment supplier, Wolseley, jumped 56p to 470p after assuring shareholders it has no plans to raise extra capital or renegotiate with its bankers. Full-year results showed the group was still finding the going difficult. Collins Stewart is a seller of the shares, with a 342p target.

[hylas] 22/9/2008 15:38

Whew !
What a relief to be able to get out with all the idiots buying

[lordwilson] 22/9/2008 12:44

Spob I couldn`t agree more I was on the phone thurs night to two of my friends who run desks in NYC and they said they couldn`t make a call on anything anymore ! I can`t believe wolseley have not dropped further ?? I had these down as a possible casualty as all the information I have as a land owner and property owner in the UK is that they are bleeding heavily .

Good Luck

LW

[spob] 22/9/2008 08:12

I guess their solicitors told them they could get away with this bit....


" No plans to raise equity or renegotiate banking covenants, although these remain options should market conditions deteriorate very dramatically. "


....Given the examples of many other companies who have said similar and then used the " unforseen sudden deterioration in market conditions " get out clause.

Who can we trust in the current market ?

Nobody

[crosswire] 22/9/2008 05:59

The Week Ahead: Hopes rise Wolseley can build on US bailout

Monday, 22 September 2008

Nervous investors will have their fingers crossed for Wolseley, the construction materials group, which is due to publish its final results today.


The company has seen its share price plummet amid fears that, faced with tougher conditions in the US and UK housing markets, it may run close to its borrowing facilities. The debate, as Seymour Pierce highlighted in a recent note on the company, has been "not so much about the earnings numbers but about whether the group will breach its banking covenants".

But at the end of last week, following news of the US government's plans to deal with the bad mortgage debts at the root of the current financial crisis, the fears were mitigated by hope, sending the company's stock up more than 6 per cent in Friday's record session.



Traders said that the new measures, once finalised and implemented, should aid the American housing market, which has been hit by the paucity of credit. This should benefit Wolseley, which has extensive operations on the other side of the Atlantic.

"Normally, the share price would have been weak ahead of Wolseley's results. But there is some confidence that the worst may be over with this American bailout," said one market source, speaking at the end of Friday's session.

[spob] 21/9/2008 12:57

Speculation that Wolseley may soon have to embark upon a fundraising exercise is expected to heighten this week when the group is tipped to report a 30% fall in underlying earnings to £608m for the year to July 31.

Wolseley, which generates around half of its sales in the US, has experienced a torrid year after being hit by the US housing crisis, followed by deteriorating conditions in the UK and Europe.

The firm, which is best know for its Build Center and Plumb Center brands, has already cut 6,000 jobs and indicated in July that it would have to slash its dividend to help towards cost savings.

[oxfordrun] 16/9/2008 18:02

sell it is then 2.00 here we come

[fugwit] 15/9/2008 09:05

Sell recommendations from Citigroup and Collins Stewart, both comment 70% rally bit daft given their major markets poised for downturn.

[oxfordrun] 14/9/2008 20:33

they are not reporting job cuts, there have been loads, on average 2/ 3 from each branch of build/plumb center,ummmmmm and a few regional mid management,,,,gone, why the secrecy? ring any branch and ask.

[moob] 14/9/2008 08:35

Collapse of Longmead Group reflects pain in DIY sectorSteve Hawkes, Retail Correspondent
A maker of ceramic bathroom fittings that ranked as one of the bigger suppliers to Britain's DIY sector has become the latest victim of the consumer slow-down on the high street.

Longmead Group announced yesterday that it had appointed

[spob] 12/9/2008 11:36

from FT Alphaville


NH: we should take a quick peak at WolseleyNH: biggest faller in the FTSE 100 at the momentNH: down 15p at 451pNH: a loss of 3.2%NH: stock has enjoyed a really big dead cat bounce in the past couple of monthsNH: NH: hit 285p mid JulyNH: stock closed at 466p last nightPM: Bounce of 60% in two monthsPM: whoaPM: Thaat's will be on the back of the snap recovery in the US construction sector i guessNH: unsurprisingly a few analysts reckon that has been overdoneNH: especially as there has been no improvement in tradingNH: and the US house market is still dreadfulNH: and remember Wolseley does most of its business in the USNH: and the company has a stretched balance sheetNH: and one has to wonder if it might look to use the rallyNH: to launch a cash callNH: anyway, as I said earlier a couple of downgradesNH: the one from Citi is interestingNH: they can find no reason for the rally, and nor can INH: apart from short closingNH: and reckon weakness is going to spread from the US to Woseley's UK and European businessNH: analyst Clyde Lewis still thinks a rights issue a possibleNH: and reckons that on 15 times prospectiveNH: wolseley is a slot


NH: We are cutting our recommendation on Wolseley to Sell from Hold -
Essentially we think the bounce (+89%) in the share price over the last couple
of months is too far ahead of the curve and that the next 12 months will be
harder for profits than the market expects. Target Price of 310p maintained.

Recent US road trip confirmed no signs of recovery - Even with housing
stabilising, the run rate is still down on the previous 12 months and nonresidential
is only now starting to slow, while State spending is under pressure.

Increasing concerns about UK activity - With housing starts on their knees,
ongoing concerns about inflation, and weak consumer confidence, there is a
large concern about the RMI levels in the coming 12-18 months.NH: Not good on the continent either - With French and Danish housing activity
also slowing sharply, the group has nowhere to hide from the softer residential
markets.

Lower forecasts highlight ongoing balance sheet pressure - We have cut our
forecasts for 2009 by 14% and 30% for 2010. This puts the balance sheet
under more pressure and increases the risk of a rights issue.

Longer-term fundamentals look sound - We continue to believe that the
building distribution market offers good long-term returns for the major players
as they benefit from economies of scale and an increasing need for
refurbishment.NH: PM:

[fugwit] 12/9/2008 07:13

Reality returns by the looks of things. Finally, now where to enter short?

Or are we simply going to stay on trend. Not so easy this game.

[tourist07] 12/9/2008 04:41

Sizzzle ..........

[nickcduk] 10/9/2008 12:56

Been some horrific bear squeezes across property related stocks in the last few days. Morgan Stanley note on Tuesday probably triggered it off arguing a bear market rally was likely. If US property markets starts to stabilise then WOS will be hit with the whammy of Europe slowing very sharply. The shares will fall sharply in due course but not until the house builders and property stocks start to turn over. That may take a few days yet during which time bears are going to get burnt very badly.

[markth] 10/9/2008 12:39

They deserve it.

Market now looking ~6-12 months ahead and anticipating recovery in US Housing Market (IMO)

[kibes] 10/9/2008 09:29

Bear market in the US, economy slowing, DOW down 280 so WOS goes up? Just looks like an attempt to burn shorters out to me.

[zimzoot] 09/9/2008 13:00

sell the rally :)

[zimzoot] 05/9/2008 12:45

bad us data

U.S. Payrolls Fell 84,000; Jobless Rate Jumps to 6.1%

U.S. Stock-Index Futures Extend Decline on Decrease in Payrolls

By Lynn Thomasson

Sept. 5 (Bloomberg) -- U.S. stock-index futures extended declines after employers cut more jobs than economists had forecast in August, sending the unemployment rate to a five-year high.

General Motors Corp., United Technologies Corp. and Home Depot Inc. all retreated more than 1 percent after the government said payrolls shrank by 84,000 jobs in August, more than the 75,000 projected by economists in a Bloomberg survey. Merrill Lynch & Co. tumbled after Goldman Sachs Group Inc. advised selling shares of the third-biggest U.S. securities firm on expectations it may post more writedowns tied to credit-related investments.

Standard & Poor's 500 Index futures expiring in September lost 12.80 points, or 1 percent, to 1,223.8 at 8:35 a.m. in New York. Dow Jones Industrial Average futures lost 107 to 11,093. Nasdaq-100 Index futures dropped 19.75 to 1,756.

The S&P 500, the benchmark index for American equities, lost 3.6 percent this week as a government report yesterday showed the number of Americans collecting unemployment benefits reached a five-year high. Commodities producers tumbled amid concern slowing growth will curb demand for oil and metals.

`Bear Market'

``We're clearly in a bear market,'' Simon Moss, who manages the equivalent of $4.1 billion as investment director of U.S. equities at Scottish Widows Investment Partnership in Edinburgh, said in a Bloomberg Television interview. ``There is no doubt the economy is slowing.''

Stocks in Europe and Asia fell today, sending the MSCI World Index to its worst weekly slump since 2002, on concern weakening economic growth will curb earnings at semiconductor makers while credit-related losses at banks increase.

The S&P 500 has lost 16 percent in 2008 as subprime-related losses at global banks climbed above $500 billion and the U.S. economy teetered on the brink of a recession. This week's losses threatened to erase the S&P 500's rebound from an almost three- year low set on July 15. The index is up 1.8 percent since then after rebounding as much as 7.4 percent.

Merrill Lynch & Co., down 51 percent this year in New York trading, sank $1.33 to $24.88. Goldman added the company to its ``conviction sell'' list and lowered its share-price projection by 23 percent to $22.

``Merrill currently trades at the highest price-to-book multiple in our large-cap brokerage universe, despite having some of the most significant exposures to troubled assets such as CDOs, mortgages and leveraged loans,'' analysts led by William Tanona wrote. ``With these markets still under pressure, we believe additional writedowns and book value deterioration will continue to plague the stock.''

New York-based Merrill, battered by more than $50 billion of credit market losses and writedowns, has sold mortgage-linked assets to reduce risk and free up capital. The company trades at 1.22 times book value, compared with 0.91 for Citigroup Inc., the only other firm that's lost more from the credit market crunch, according to data compiled by Bloomberg.

[fugwit] 05/9/2008 07:48

If we can get and stay below the long term upper resistance by the 10th and thereby break the current uptrend then bets are back on. I will go short with tight stops below the longer term descending trend line for the moment as do not want to be out of this one when it breaks down.

[adda] 04/9/2008 20:53

see 390 back on the cards

[tourist07] 04/9/2008 17:12

So are we upward trend or downward trend ... or still has to make up its mind?

Feeling a little better .... but would appreciate a covenant breach or something :)

[markth] 04/9/2008 13:53

hmm well I closed at 463 today after rates were left on hold...then watched in horror as it rose up to 471....but glad I did now.