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The next stock to release franking credits

Leading off-market candidates are:

Woolworths (WOW)


Woolworths sold 540 fuel convenience sites last month to EG Group for A$1.725bn. This transaciton is subject to regulatory approval but should complete in early 2019. Back at their 2015 strategy day Woolworths disclosed that their maximum target net debt/EBITDA ratio is 2.7x (including leases). Based on this maximum gearing level and our FY19 estimates we believe the company will have ~A$1.5bn headroom and we expect roughly this amount to be returned via an off-market buy-back releasing over A$600m in franking credits.


The other candidate mentioned is RIO



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  • 2 months later...
Woolworths posted a 1 per cent lift in half-year profit to $979 million as group sales rose 2.2 per cent to $30.704 billion. Woolworths declared an interim dividend of 45 cents per share, up from 43 cents, payable on April 5.


Releasing its latest earnings update, Woolworths supermarkets did show positive sales momentum through the December half, improving sales at Big W, but this was countered by a surprise sharp retreat in earnings at its market leading liquor chain Dan Murphyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s. Woolworths has also warned that it expects the trading environment to remain challenging in 2019 amid subdued consumer spending.


The nationâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s biggest retailer said its flagship Australian supermarkets had also posted strong sales growth momentum for the December half, with this continuing for the first seven weeks of the second half of the financial year, as sales increased âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“modestlyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ, which is better than Coles, which yesterday warned of flat sales in recent months.


The company also revealed that its long struggling Big W general merchandise chain had recorded improved sales in the first half of 2019 âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ with like-for-like sales jumping 3.8 per cent - but profit had been impacted by category mix and clearance sales. It is currently reviewing its store and distribution centre network. There were also lower earnings from its powerhouse Endeavour Drinks division, which includes juggernaut retail chain Dan Murphyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s, as it was dragged down by a low growth market.


In a move that will please Woolworths shareholders who have suffered from a series of setbacks at the group, led by the billions of dollars lost on the Masters hardware experiment, losses at Big W and a supermarket arm that had lost its leadership position in the face of a resurgent Coles, Woolworths said that after the sale of its petrol business to EG Group it intended to return to its shareholders up to $1.7 billion in capital. The petrol sale is expected to be completed in March.


At its key earnings driver, Australian supermarkets, sales for the half rose 2.3 per cent to $19.89 billion as earnings rose 4 per cent to $937 million. It said sales growth was muted by a number of factors in the first half including the removal of single-use plastic bags from the chains, the fact that Coles continued to have plastic bags for a few months after Woolworths had eliminated them and wetter weather conditions in key trading weeks before Christmas. Sales momentum improved in the second quarter, up 2.7 per cent and has shown some further gains in the third quarter.


At Endeavour Drinks, sales rose 1.8 per cent to $4.59 billion as pre-tax earnings slipped 6.4 per cent to $290 million. Woolworths conceded that trading at its retail brand Dan Murphyâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s was below expectations, driven partly by cooler temperatures, increased rainfall in some parts of Australia and a general weakening of wine and beer sales.


Big W, which has been mired in losses for years, saw sales gain 2.7 per cent to $2.09 billion as the pre-tax loss for the division fell to $8 million from a loss of $10m in the previous corresponding period. But there was some hope for a continued improvement as same store sales in the second quarter leapt 5 per cent and overall like-for-like sales in the half were better by 3.8 per cent.


At its hotels, Woolworths said sales increased 0.5 per cent to $865 million as earnings slipped 1.5 per cent to $161 million.


Woolworths chief executive Brad Banducci said that while trading across the group for the first seven weeks of the second half had improved following more settled weather, Woolworths expected a more subdued consumer environment to continue for the foreseeable future.


âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“This is a poor result,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ said Macquarie Equities analyst Rob Freeman. [He] noted that Woolworthsâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢ earnings before interest and tax - a measure of operating profitability - missed the consensus by about 4 per cent, driven by food and liquor and and Big W. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We note this is now the third miss from Woolworths in the last three half years, and the group is clearly struggling to derive the positive operating leverage some in the market are calling for,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Mr Freeman said. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Whilst capital management may placate some investors, we caution here given big lease adjusted balance sheet and weak operating conditions hindering EBIT.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

a bit like Coles?

............. down 6% today.


No payment till March for the petrol biz; will they pay a 'special' before 30 June?

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  • 4 weeks later...

60 Big W stores tipped to close, Macquarie report warns

The West Australian


Woolworths could be forced to shutter up to a third of its struggling Big W stores at a cost of almost $800 million.


The Australian reported this morning that analysis by Macquarie Wealth Management had shown Woolworthsâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢ best bet could be to âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“cut the tailâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ and reduce the number of stores across Australia from 183 to avoid a complete sell-off of the department store chain.riday, 15 March 2019 3:09PM


Woolworths is due to provide an update on the department store chain in coming weeks.

read more - https://thewest.com.au/business/retail/60-b...-ng-b881136931z




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And now we see the click frenzy on line.

Haven't we been here before?

How did that work out for DSE?

Jeepers, how the once mighty has fallen....


Let's see they blew up a start up by trying to be premium over bunnings cut cost presentation...

Now they have an existing, and once profitable chain and they go thermo nuclear on discounts???




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  • 2 weeks later...

Woolworths will buy-back $1.7 billion worth of shares off market in May, has sold its Petrol business, and will shut 30 Big W stores over the next three years at a cost of $370 million. Woolworths has about 185 Big W stores around the country.


"While the recovery in trading for Big W is encouraging and there remains further opportunity for improvement, the speed of conversion to earnings improvement is taking longer than planned," Woolworth chief executive Brad Banducci told the market today. The Big W division is expected to report a loss of between $80 million and $100 million in the current financial year, despite 6 per cent sales growth in the three months to the end of March.


"We understand the impact that the store and distribution centre closures will have on our team and will endeavour to provide affected team members with alternative employment options within the Woolworths Group where possible."

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Woolworths and Aldi have increased their share in Australiaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s grocery market, while Coles and IGA have slipped slightly, according to the latest research from Roy Morgan.


Woolworths remains Australiaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s top grocery retailer, increasing its share of the market to 34 per cent in 2018, up 1.4ppts, while a newly independent Coles now has a share of 27.6 per cent of the total grocery market, down 1.6ppts on a year ago.


Aldi grew its grocery market share to 11.4 per cent in 2018, up 0.5ppts from a year ago, while Other Supermarkets outside the âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‹Ã…“big fourâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢ such as Foodland and Foodworks have increased their share to 9.1 per cent, up 1.2ppts. IGAâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s grocery share was down 0.4ppts to 7.1 per cent.


Woolworthsâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢ dominance in key fresh food categories has helped its strong lead. The retailer holds the largest market share in dollar terms for fresh meat, fresh deli, fresh bread and fresh fruit and vegetables ahead of Coles, Aldi and IGA supermarkets. The big two currently dominate Australiaâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s fresh food markets holding over 50 per cent of each of the fresh food markets....

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  • 1 month later...
Woolworths has massively scaled back offers for its $1.7 billion share buyback after overwhelming demand from retirees and superannuation funds chasing franking credits.


Announcing the outcome of the buyback on Monday, Woolworths said it had scaled back offers by 84.68 per cent, meaning successful shareholders had only 15.32 per cent of the shares they offered bought back, excluding the first 180 shares before the scaleback applied.


Woolworths chairman Gordon Cairns: âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We are pleased with the outcome and the strong level of investor interest." Jessica Hromas


The buyback price was set at $28.94 a share, the maximum 14 per cent discount to the market price of $33.64....

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