john222
19 Mar 2018
Re: Potts I agree some useful comments and whilst i like this company and have held historically the forward PE of 17+ surprised me to be honest. Its a good company well run but as a pure 'investment' can it grow profits and push its share price on from 17x......i doubt very much that it can meaning at best the price will go sideways for a while at best.If you're in at 170p average then an effective PE of 14.5 looks obviously a far better starting point!
Special A Gent
16 Mar 2018
Re: Potts Hi Bill and GamesSome excellent comments and can fully related to the concerns regarding to the Aldi Lidl challenge. But with regards to Morrison, Tesco, Sainsbury, Asda. the big four losing customers. True they have had a big wakeup call and in the case of Morrison’s they have pulled out all the stops.How about looking at established Aldi’s and Lidl’s and look at the empty shelves? Why when you go into Aldi stores there are empty shelves, could be many, many more customers are using them, or alternatively Aldi’s etc! Could it be? That the companies are now having logistic problems. There are many more Aldi stores, in my city they started with one, now there are five. Big logistical problem. Stores are small in relation to the big 4 store setup. They do not carry the variety of produces that the big 4 do. Some Aldi stores are so small they cannot carry their full range of produces and have “Special buy quick turn round products selling” to free space within the store. Aldi’s in the early days claimed that they could sell a product before they had paid the supplier. Aldi’s relies upon quick turnover and restocking so logistics into the future could be a problem. More stores the bigger the problem, increased costs, so into the future, perhaps maybe not as cheap as they are now. More stores more employees and so on. I believe Morrison are well placed to compete with the likes of Aldi and co and perhaps the small British style small stores will be the ones to fall by the wayside.Regards S.A.G.
Bill1703
16 Mar 2018
Re: Potts "Decline is probably the wrong word though, it's probably more appropriate to use the words "over" and "saturated"..."Yes, Games, the underlying industry is clearly not in decline - people are still buying food, at a decent clip, and will continue so to do.But as to where they buy that food.... the Germans are clearly not going away and will continue to take market share, albeit at a reduced rate, most likely. So, on average, the other incumbent players will lose more share, and all will face ongoing pressures on the "top line", of core grocery sales and volumes.However, as I've argued before, what happens on the top line will not necessarily by mirrored on the bottom line... Having originally underestimated the German advance, we're now seeing multiple initiatives, which are transforming the way they do business, and the cost of it - and at an accelerating rate. Most "big" players are radically overhauling their cost structures, in management and other areas, with sizeable savings... we're seeing a concerted move into Wholesale (led by Tesco and now MRW)... we've seen synergistic expansion into complimentary non-grocery areas (SBRY and Argos). I think we'll see a lot of more of this... again, I draw the parallel with the widespread (and still ongoing) shake-up in the airline industry, prompted originally by the impudence of the "no frills" discounters - in the end, it's not quite a case of "everyone wins", but the long-term benefits are still enjoyed fairly widely. And then... I think we see more M&A and core consolidation. Of course, I still see a MRW/SBRY tie-up as the "obvious" end-game, but there are other ways it could play out. And you have to say, if there is anything such as an "attractive" target in this space, then MRW has to be it, with its strong balance sheet of (increasingly) modest debt, higher freehold asset base and big pension surplus, its vertically-integrated operating advantage and its evident recovery in core retailing discipline. "Games - Just parked in Morrisons car park to nip over the bushes to get to Aldi because their car part is jam packed - lol !!"You rascal, you... Maybe that's why MRW is still doing pretty well? 'Cos my (limited) experience of shopping at Lidl/Aldi suggests that while you may be willing and able to "nip over the bushes", a high proportion of their clientele are not, by dint of age and/or "nimbleness", and therefore probably resort to just waddling through the doors at MRW...
gamesinvestor
15 Mar 2018
Re: Potts "But that said, they also reflect the fact the industry backdrop remains challenging and is likely to stay that way."It's a bit like Warren Buffet's early experiences in the textile industry - "it doesn't matter how well one manages the business, if the underlying (not reported Bill) industry is in decline"Decline is probably the wrong word though, it's probably more appropriate to use the words "over" and "saturated".Games - Just parked in Morrisons car park to nip over the bushes to get to Aldi because their car part is jam packed - lol !!
Radaking
15 Mar 2018
Re: A Buy from Me wow your a genius,,,,,,,,,,,,,,,,,,,,,,,,dunce tunc
Bill1703
15 Mar 2018
Re: Potts "One reason for this is that operating profit fell year-on-year, while all of the profit uplift came from lower financial charges; owing to the hard work Morrisons has put in to reducing its debt pile.... Morrison’s operating margin slipped a little, from 2.9% to 2.7%, to suggest the competition remains as brutal as ever."I don't actually buy this analysis - underlying operating profits were actually up y-o-y, albeit nothing spectacular (+3%) and the actual decline in underlying margin was 7 bps... okay, still a decline, but as near as flat as you can get, pretty much.And I might add, before Games gets worked up about underlying vs reported profits - "underlying" operating profit was actually lower than reported profits for both of the year being reported and the previous period, not normally the way of these things!For me, the results were remarkably solid, in pretty much every area - and certainly testament to management's assured control. But that said, they also reflect the fact that the industry backdrop remains challenging and is likely to stay that way.I suspect the SP retrace owes more to a market very much in glass-half-empty mode, overly eager to pick out any minor negatives in a sea of generally good news, but also a feeling that these results perhaps indicate that we've now seen the best part of the restoration to health, with comparatively little still to go for.I kind of agree with the latter, to some extent anyway... But I am happy enough holding on for now, with the SP slipping a bit below "fair value" and with prospects for further special dividends and/or similar looking pretty good going forward.
Special A Gent
15 Mar 2018
A Buy from Me Hi Everybody.Interesting results and more so interesting fall in the SP.I first bought into WM in Jul 2012 when the SP was £2.65, in hindshight perhaps not the right decission given the falls running into 2014 when the market took a dislike for the company.Yes tough times for all the supermarkets.Given what I had learnt about WM I chose to buck the trend and started trading in 2014 on the SP to lower my average price on mmy holding. Did not want to sell out totally but the dividend was so low. I still had the confidence to know WM would fight back.Ken Morrison knew how to run a business and although the money expertise didn't like him I had an opportunity to see into what the company were doing.It's been a long time coming this recovery so although the SP's down this is a buy and hold for me. Now holding at average price £1.70 so with yesterdays results I am expecting a 6.8% yield given the patience I have had to endure.Regards S.A.G.
Herald
14 Mar 2018
Re: Potts After three years of faultless execution during the Potts reign the SP is back exactly where it and Potts started. It's as if all the plus points of reduced debt, pension surplus, wholesale expansion count for absolutely nought. Saving us from the blunderful Dalton means nothing as far as the experts are concerned (it means rather a lot to shareholders of course). I suppose the retail landscape in the interim has become so toxic that standing still and not going under is considered a major coup.Anyway those who buy for income can be satisfied with a further witty line of that Mould analysis. “Best of all, the reduction in debt and the massive pension surplus, means Morrison’s – and its shareholders – can hunker down for a long fight without having to worry about the interest bills it owes to its banks.”[link]
gamesinvestor
14 Mar 2018
Re: Potts """ but investors may want to see earnings from the grocer’s core day-to-day operations rise before they take a view that the company really is seeing off the threat posed by the discounters Aldi and Lidl"""Sadly, whilst I do like Morrisons, they have the annoying problem that Aldi and Lidl have a habit of building a unit next to Morrisons and the difference in the fullness of the adjacent car parks is plain to see.Games
Herald
14 Mar 2018
Re: Potts Russ Mould, AJ Bell supplying some reasons for those having a negative take on today's results.“The combination of rising sales, a healthy jump in pre-tax profits, lower debt, an increased ordinary dividend and even a special dividend of 4p sounds very appealing, but investors are still declining to stock up on shares in Morrison. One reason for this is that operating profit fell year-on-year, while all of the profit uplift came from lower financial charges; owing to the hard work Morrisons has put in to reducing its debt pile.“Lower debt means less risk, and that is a good thing, but investors may want to see earnings from the grocer’s core day-to-day operations rise before they take a view that the company really is seeing off the threat posed by the discounters Aldi and Lidl, let alone more established rivals such as Tesco, Sainsbury and Asda. After all, Morrison’s operating margin slipped a little, from 2.9% to 2.7%, to suggest the competition remains as brutal as ever."
idontwanttolose
14 Mar 2018
Re: Potts Why the 8.9p drop in the SP?the results looked ok to me
gamesinvestor
14 Mar 2018
Potts Looks like Potts isn't making a bad fist of things since 2015 :--[link] on the reason for the special dividend, Potts and chairman Andrew Higginson said: "We are growing sales and profit, and expect that growth to continue to be meaningful and sustainable in the future. We are generating significant levels of free cash flow, which we also expect to sustain."""Games
gamesinvestor
14 Mar 2018
Results [link] summary• Group like-for-like (LFL) sales(1) ex-fuel/ex-VAT up 2.8% (2016/17: 1.9%)• Revenue up 5.8% to £17.3bn (2016/17: £16.3bn)• UPBT(2) up 11.0% to £374m (2016/17: £337m), up 9.5% on a 52-week basis• Underlying EPS(2) up 12.2% to 12.19p (2016/17: 10.86p)• Reported PBT up 16.9% to £380m (2016/17: £325m)• Free cash flow(3) of £350m (2016/17: £670m)• Net debt reduced by £221m to £973m, below our £1bn year-end target• Net pension surplus of £594m (2016/17: £272m)• Return on capital employed increased to 7.7% (2016/17: 7.3%)• Final ordinary dividend of 4.43p, taking the full year ordinary dividend up 12.2%to 6.09p (2016/17: 5.43p)• Special dividend of 4.00p, taking the full year total dividend up 85.8% to 10.09p
Radaking
14 Mar 2018
BoomshakaRada ! Results Shareholder returns Our policy is for the ordinary annual dividend to be sustainable and covered around two times by underlying earnings per share. The final ordinary dividend will be 4.43p, bringing the ordinary dividend for the full year to 6.09p. In addition to the final ordinary dividend, the Board is proposing a special dividend of 4.00p per share, taking the total dividend for the year to 10.09p, an increase of 85.8% on last year. The principles of our capital allocation framework guide us to reinvest to deliver profitable growth and return surplus capital to shareholders. In recent years, we have made strong progress with the turnaround and our Fix, Rebuild and Grow strategy. While there is still much we plan to do, a new Morrisons is now emerging. We are growing sales and profit, and expect that growth to continue to be meaningful and sustainable in the future. We are generating significant levels of free cash flow, which we also expect to sustain. The special dividend reflects our good progress so far and our expectations for continued growth. Looking forward, we will retain a strong and flexible balance sheet. We will be guided each year by the principles of our capital allocation framework in assessing the uses of free cash flow. Subject to shareholder approval at our 2018 AGM, both the final ordinary and special dividends of 4.43p and 4.00p per share respectively will be payable on 28 June 2018 to shareholders on the share register at the close of business on 25 May 2018.
II Editor
06 Mar 2018
NEW ARTICLE: Why there's 20% upside for Tesco shares "The chorus of supermarket watchers hopeful that LSE:TSCO:Tesco shares can finally return to the 250p level last seen in 2014 grew a little louder today.First up, Kantar Worldpanel's latest grocery market research showed Tesco and ..."[link]
