Bertie Biddle
10 Jan 2017
Re: Results Spain"Before Christmas I got 5000 points voucher if spending £40"The deal was that you got the 5000 points if you spent £80 which qualifies you for a £5 voucher on the next shop. Whatever, it must have worked because they are miles up on last Christmas but of course profit is reduced.I have never understood why booze is reduced at this time of the year when sales are so high. Profit margins are cut back to almost zero for small shop owners.Footfall in January is always low.
gamesinvestor
10 Jan 2017
Re: Results """Games, perhaps my post did not make it clear, I'm not suggesting that for one minute Morrison's is going any where near the £3 highs of 2013, but I do suggest that they still have legs to go higher than today's sp"""Bazil no worries m8, I think if you glance back at the post, it was addressed to Bertie (unless you are his brother or somat!! )But nonetheless, the gap between 248 and 300 is a mere 52p and it could go anywhere in between those numbers or above 300 or well below 130 - who knows -- the vagaries of the short term stock movements are - well, pretty vague innit?It's the longer term we are focusing on I guess unless you are a clever guy like Soi who can hop in and out of these stocks like a jack in the box.Bertie's points are indeed very valid and old Pottsy seems to have his eggs in order along the aisle there - but still he's going to have fewer shops, no convenience stores and a declining margin if his growth is only to come from online delivery stuff.Games -- I could be mad and he's got some magic wand that will double the turnover in the same stores, who knows, but I'm sure there'll be no one in the grocery business that can do that.
Bazil_Brush
10 Jan 2017
Re: Results Games, perhaps my post did not make it clear, I'm not suggesting that for one minute Morrison's is going any where near the £3 highs of 2013, but I do suggest that they still have legs to go higher than today's sp. I am happy to hold and top up. I am also happy that investors who bought shares at the lows of 140p will be offloading to realize a profit and who can blame them.I have some friends who work at Lidle and it was interesting to hear that the sentiment of the staff is that a considerable number of shoppers are now "grazing" across the spectrum of the budget stores such as Aldi and Lidle and the more upmarket stores such as Morrisons, etc. Some even voicing opinions as to budget stock being boring and lacking in choice. You can only cut back so far and then your behind.Bertie makes a valid point that Morrisons are winning back customer support and loyalty with their ethical approach of how they source their products, particularly meats. Their premium range is gaining a reputation for quality at a reasonable price.Out of the big four, IMO Morrisons are making the best progress and streamlining their operation to suit the trends as you describe in your post. A swell in population is not going to catch up with the saturated market place I agree, but by savvy stock control, purchase of goods at the right price, fair to suppliers too, is putting them ahead of the game.The strongest horse in the race in my humble opinion.B_B
gamesinvestor
10 Jan 2017
Re: Results "I am currently showing a profit of 54% on my MRW investment"Bertie good on ya m8 -- you got your timing right, a lot better than mine.You have to remember that even only back at the end of 2012 the pre-tax profit was £945M and the P/E was 11 and 9 the following year with a pre-tax of £898MLook at it today -- Revenue is £16.1Bn compared to £17.6Bn and £18.1Bn (2012-13 respectively) Pre-Tax profit is £320M ish - approximately 1/3rd And today the P/E is some 23.3 after todays rise.The Amazon thingy won't amount to more than a cup of the warm stuff - it's a very small part of the offering and if it's with Amazon the margins will be less than the store base and even Morrisons own online offering.Yes you might enjoy shopping in Morrison, as other swear by Tesco or Sainsbury -- It's almost like I drive a BMW while you drive a Merc argument -- personal choice.What's hard to ignore is the simple mathematics illustrated above -- and it's not going back to the numbers created by the scientific calculator held in Dalton Philips hand.The euphoria of today's announcement could very soon pass and one missed future quarter could bring the P/E crashing to normality.For a company with 2% profit margins and a few % ROCE -- a P/E of 15 is probably too aggressive.Another thing to consider is that MRW has done a very good job of getting out of the loss making stores -- very sensible, but where is the growth coming from?I'd hate to think it's only from online, as I guarantee you there is NO money in delivering stuff to people's doors.Games
Spain Fund
10 Jan 2017
Re: Results I shop at Morrisons so a fan but don't hold shares.I can't help feel they pulling the wool over investor's eyes. As mentioned before P/E is into the 20s, double what it was in 2013. Profits will still be a third or half of 2013 or so.My neighbour says it was empty today as I found yesterday. Before Christmas I got 5000 points voucher if spending £40 which is stupid from a shareholder view. People are going to spend that many times at Christmas so why give away a £5 voucher. Prices have been cut and cut too.
Bertie Biddle
10 Jan 2017
Re: Results Games"I'd be a little cautious about Morrisons returning to these levels"I started shopping at MRW just over a year ago. I liked the range of products they were selling and were making the effort to go upmarket. I liked the idea that they owned their own farms and enjoyed the taste and quality of the meat they sold.I bought their shares.I liked them getting shot of the convenience stores and the deal they did with Amazon. I think the SP has still some way to go as the Amazon logistics have yet to make a contribution. I am currently showing a profit of 54% on my MRW investment which is the most profitable this year. I continue to shop there and have noticed a serious decline in the Aldi offering, likewise Sainsbury but Asda has improved. Tesco needs a facelift.Brexit will provide buying opportunities on the retail fron
Bill1703
10 Jan 2017
Re: Results "When your profit margins halve, as they have across the sector, you have to ask yourself if they can recover to anywhere near close to previous margins.... "Yes, Games, a cautious tone is sensible. The days of 5-6% margins look gone for good, and £3+ a long way off for MRW... as you say, the stock valuation already discounts a considerable degree of operational and financial recovery - though at least we are seeing some of this come through."... the situation overall hasn't changed. In fact it's probably going to get worse... MRW is selling the same or similar volumes and revenue numbers ... for half the money in profits.... It really doesn't matter if Aldi or Lidl mess up and make lower profits -- the private owners don't give a monkey's... Is UK population going to grow at the same pace as shop openings?"Whether it will get "worse" is, however, more difficult. At least for MRW - it's not much bigger than either Aldi or Lidl now, not much more than 10% of the market, and they can outperform if the get the retail basics right - with the suggestion that this is exactly what we are now seeing. I say "can", of course, rather than "will" - but the potential is there.And they are doing this while closing stores - so not exactly flying blind in the face of the realities of a saturated market, as most of the sector was until a couple of years ago. And Aldi/Lidl are hardly charities - they're very disciplined capital allocators, will not chase ever lower returns, and will be alive to the long-term danger of cannibalising their own margins. Though I concede that they'll open a fair chunk of new store-space in the meantime.The halving of margins and profits is a 'known known', and in the price, I am sure. I don't think you need margins to head back up to justify the current MRW valuation - though I've greater concerns with TSCO, where significantly more seems to be taken on trust. But equally, increasingly harder to see sustained upside from here - and with a dividend yield only gradually recovering, prospective total returns look a bit underwhelming, unless management really can pull rabbits out of intrinsically finite hat.I previously saw ~230p as fair value, and you can probably argue for a small uplift on today's upbeat report - but no better than HOLD for me, and not just in the very near term.
gamesinvestor
10 Jan 2017
Re: Results "Considering the sp was over £3 mid 2013 before the slow decline of supermarket stocks fighting for customers"I'd be a little cautious about Morrisons returning to these levels. They might, but I doubt it will be justified on fundamentals. The P/E is already well over 20+.When your profit margins halve, as they have across the sector, you have to ask yourself if they can recover to anywhere near close to previous margins.Yes MRW have stabilised the ship for now, but the situation overall hasn't changed. In fact it's probably going to get worse. I know what you are thinking -- ""you party pooper you"" but think about it. MRW is selling the same or similar volumes and revenue numbers (with a decline) for half the money in profits.It really doesn't matter if Aldi or Lidl mess up and make lower profits -- the private owners don't give a monkey's, they have thousands of shops across Europe and they are going to open hundreds more between them in the UK alone!Is the UK population going to grow at the same pace as the shop openings?Games -- I think we are looking at a great deal of sensible reorganisation at MRW but a "permanently" damaged grocery sector. The returns on investment across the board are not going to be what they once were, and that ultimately will be reflected in valuation over a longer period of time.
Bazil_Brush
10 Jan 2017
Re: FAO BAZ Honest guv... never erd of a Malkis Any man who drives to his allotment in his new Bently is worth stalking Malkis!! Where do we go next?B_B sorry for O/T folks
malkis
10 Jan 2017
FAO BAZ ARE YOU STALKING ME BAZ?? Ihave been here l't and am pleased to see you on board . Warm Regards MALKIS
Bazil_Brush
10 Jan 2017
Re: Results I was expecting a rise when the run up to Christmas figures were made public but this has beat my expectations.I'm a newcomer to the retail sector of stocks and wanted to invest in a supermarket. Being a "Bradford lad" by birth and much of my childhood I hold an affinity with Bill Morrison. I have memories of my old man pointing out where Bill had his first shop Legrams Lane, then progressing to the old bowling alley off Bradford Park Avenue. Watching them build their new state of the art head office on Thornton Road..... sorry I digress with my trip down memory Lane...Been following Tesco, Asda, Morrisons, Sainsbury now for a while and finally took the plunge into Morrisons just before Christmas. Wish I had the cahounas to take the plunge earlier in the year when they were down around the 140p mark and ended up paying 226p. Not a large holding but enough for now.I was very surprised to see the indecision from the brokers listed on your post Games, but thinking about it, expected nothing less from them. Fence caps at best. Considering the sp was over £3 mid 2013 before the slow decline of supermarket stocks fighting for customers, I think Morrisons has executed their comeback quite well. Customers are now spending more in stores away from Lidle and Aldi, who to be honest have a restricted choice of provisions on offer. My opinion for what its worth is that the small rise in Morrisons sp will be sustained. May see investors who bought in at the low taking profits, however investors like me will want to hold some dividend paying stock and as i said, Morrisons have made a good call with their in house changes and have a good property holding too.For me this is one to top up on the dips and happy with my 4% rise for now. B_B
Bill1703
10 Jan 2017
Re: Results "Good set of results"Games - yes, solid stuff... and a positive profits "warning", when was the last time we saw one of those in this sector??Always hard to be sure with such thin statements, and ever wary of corporate spin... but taking their word for it, looks like it's down to good execution on retailing basics, improved product offer and sharper service. Bodes well for the near term at least.Interesting to see if the stock holds its gain today - understandable uptick, but MRW still very much up with events for me. Happy enough holding for now.
gamesinvestor
10 Jan 2017
Results [link] set of resultsSold another quarter of my holding at 248.1actually in profit, amazingly, on all my dealings with MRW since back to 2011.Shan't be making the same mistake again though and holding this at a high point.Games -- It's just 0.71 of my wad now
gamesinvestor
08 Jan 2017
Re: The experts ""Do you know if there other, more upbeat targets out there?""Bill sadly not, this was the lot that appeared on HL for January.I think we already seem to be in some kind of short squeeze and these guys are in the process of being reamed.I must admit to being a bit sceptical on the recent positive share price recovery given that MRW is just going to keep experiencing more and more competition as the likes of Aldi and Lidl erect hundreds more stores in the next couple of years.This is a very saturated market and the stock price has more to do with sector sentiment than real substance -- well I think that's the case here. It can just as easily go all pear shaped and everyone starts feel unsure about them again.Games
Bill1703
07 Jan 2017
Re: The experts "Excellent set of -- I haven't a clue -- perhaps they could turn it into a game show?"Games - interesting that the consensus from this is quite so negative... at least in terms of price targets? Do you know if there other, more upbeat targets out there?Though could be a bull signal in itself, after all... be fearful when others are greedy, and greedy when others are fearful - and all that!I am sure brokers would be highly amused to know that so many PIs take delight in disparaging their efforts - and yet, they can't help posting about them, at the same time...
