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BWX, BWX LIMITED
blacksheep
post Posted: May 21 2018, 08:46 PM
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In Reply To: JSB's post @ Feb 21 2018, 04:46 PM

Hope you're not still short JSB - current position as at 15 May 2018 - 10.58%, although lower than the 13% at it's peak

https://www.shortman.com.au/stock?q=bwx

As per AFR article - Agony awaits BWX short sellers http://www.afr.com/brand/rear-window/agony...20180521-h10c0w

Suggestion is shorts will need to cover, which could send the price even higher than the offer price of $6.60

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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington

Said 'Thanks' for this post: JSB  
 
nipper
post Posted: May 21 2018, 12:09 PM
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QUOTE
BWX, which owns skincare brand Sukin, has gone into a trading halt after the company was approached about a potential takeover.

Melbourne based BWX, a vertically integrated body, hair and skin care manufacturer and distributor, requested a two-day trading halt on Monday, citing a potential control transaction.

This time the acquisitive BWX, which has made three bolt-on acquisitions in less than 12 months, is the target.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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JSB
post Posted: Apr 23 2018, 09:38 AM
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BWX battles to win back investor faith after deal blitz

http://www.afr.com/business/bwx-battles-to...20180421-h0z2fk

 
JSB
post Posted: Mar 8 2018, 03:47 PM
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No doubt Goldman Sachs will lower price targets but still set them them well north of fair value.


https://www.fool.com.au/2018/03/06/bwx-ltd-...limb-65-higher/

(Not so) Surprisingly, GS has raised it's price target after the disaster Half Year!

Interestingly:

QUOTE
the weakness at Mineral Fusion attributed to one-off channel stocking by the previous owners.


https://www.fnarena.com/index.php/2018/03/0...ands-its-reach/

Operationally, the channel stuffing is likely to average itself out in the long run, but the acquisition price was determined off a forward looking revenue and profit forecast and lauded as a bargain buy based on a revenue to consideration ratio. Not so bargain if that revenue figure is artificially inflated by short term supply chain distortions.

Haven't checked if there was a corporate/financial adviser to the deal, but can't imagine they'll be invited back.

 
JSB
post Posted: Feb 21 2018, 04:46 PM
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In Reply To: blacksheep's post @ Feb 21 2018, 03:39 PM

Unfortunately, it's all academic at this stage Blacksheep sad.gif taking solace in that I was on the right track


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JSB
post Posted: Feb 21 2018, 03:49 PM
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http://www.afr.com/markets/savage-day-for-...20180221-h0wekd

QUOTE
BWX, the maker of Sukin skincare, fell more than 20 per cent on Wednesday, and software company WiseTech fell more than 15 per cent, after both companies fell short of market expectations for their full-year earnings.

In BWX's case, investors are looking for 2017-18 earnings of $46.9 million, above the company's newly issued forecast for $42 million to $46 million.


The three acquisitions during the year all falling short of expectations. Based on my calcualtions (pro rata revenue and EBITDA forecasts at time of acquisition over the ownership contribution period), revenue is only 66% of forecast and EBITDA at 44%. A bit problematic as acquisition values were derived from forward-looking EBITDA ratios. There is an awful lot of goodwill on the balance sheet for those acquisitions - the forecast ROA on Nourished Life looks ridiculous based on the consideration breakdown in 8(b) of the notes.

Higher sales from the customer-facing supermarket strategy seems to have displaced the existing pharmacy/chemist channel. Good luck trying to maintain margins on both an out-priced pharmacy channel, and a quick selling product on Coles' shelves. No doubt Goldman Sachs will lower price targets but still set them them well north of fair value. Lower end of forecasts will be tough from here if today's results continue.
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blacksheep
post Posted: Feb 21 2018, 03:39 PM
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In Reply To: JSB's post @ Dec 5 2017, 03:26 PM

Are you still short, JSB?

Haven't read their HY, but must be a stinker - or is it something else that's caused it to drop 31% today?
https://www.shortman.com.au/stock?q=bwx
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--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
JSB
post Posted: Dec 5 2017, 03:26 PM
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Change of Directors Interest

Humble takes $13.5m and a $5.6m liability off the table, Finlay nets a cool $2m.

No 604 issued, so perhaps a new insto in the shortfall bookbuild wanting a bigger slice of the pie?
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nipper
post Posted: Nov 13 2017, 07:20 AM
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BWX has high growth earnings with a valuation to match
QUOTE
BWX acquired Andalou Naturals last month for $US80 million, split 80-20 cash and stock, and with up to a further $US11.2 million of potential consideration payable over five years depending on gross profit hurdles being achieved. BWX raised $100 million from investors to fund this, and pay down debt.

It is the third deal done this year after the company bought US cosmetics brand Mineral Fusion in July for $US38.4 million cash plus up to $US4.6 million over the next 12 months in potential payments; and Australian online retail business Nourished Life in September for $20 million in cash and stock, plus any further payments over the next four years. A smaller raising was conducted for Nourished Life, of $17 million.

These deals are said to complement the homegrown product line Sukin, which BWX manufactures. It sells items from cleansers to moisturises for around $10 apiece, having bought Sukin in 2015.

The stock last traded at $6.72 and looks a reasonable chance of getting into the S&P/ASX 200; it floated in 2015 at $1.50 a share. This success happened in spite of the board's all-male profile (until this year). But BWX is very much the brainchild of chief executive John Humble, and investors have been willing to back him.

BWX, for the record, defines "natural" as being derived from "ingredients such as herbs, roots, essential oils and flowers and combined with naturally occurring carrier agents, preservatives, surfactants, humectants, and emulsifiers". It adds, "should include botanically sourced ingredients currently existing or formed by nature without the use of synthetic chemicals and manufactured in such a way to preserve the integrity of the ingredients".

BWX has also benefited from the daigou factor; its products are not on shelves in China, which requires compliance with animal testing that the company will not entertain. But it has participated in the suitcase trade.

It is just as well then that the business is diversifying its sources of earnings. The pharmacy channel in Australia has experienced the dampening effects of soft retail trade and low wage growth in the economy. Australian Pharmaceutical Industries, the owner of Priceline pharmacies, downgraded in August, citing further declines in consumer sentiment.

Sukin has been picked up by Coles, inviting some murmurs around margins. Gross margin was incredibly high at 65.5 per cent in 2016-17, up from 62.1 per cent (even at $10 a bottle). BWX does not anticipate margin compression from being stocked in supermarkets, a heroic outcome if proven. It is also stocked by Boots in Britain, giving it visibility in the eyes of offshore investors.

BWX is trading on 26 times forecast earnings, and consensus forecasts produce a target price of $7.15, ranging from $6.40 to $7.83. Only 3.7 per cent of the register is held short, according to ASIC's latest figures, although market sentiment is fairly polarised. BWX's guidance is for 2017-18 earnings growth in excess of 30.7 per cent, which puts it on track for more than $34 million EBITDA.

"Whilst we're not giving numbers for out years on the top line, we would expect our bottom line with the introduction of synergies to be able to grow at a quicker rate than the top line," Humble told analysts of the Andalou deal. The business has compound annual sales growth of 22 per cent over three years.

BWX's closest local peer is New Zealand's dual-listed Trilogy, which trades on a less demanding multiple and whose flagship product has organic certification. But Trilogy's gross margin is lower, at 51 per cent, and fell year-on-year. BWX now more closely resembles a junior global player.

The US market for naturals is forecast for compound growth of 8.3 per cent, reaching $US8.5 billion by 2021. This is faster than the personal care market at 3.8 per cent, and those figures are cited by BWX referencing Kline & Company and Euromonitor data. This is predicated on consumers becoming "increasingly educated on the benefits of natural personal care and beauty".

As a manufacturer it is not gripped by the Amazon panic besetting retailers, although its $20 million digital commerce acquisition could be seen as a show of counter-consensus conviction. In truth, Amazon has not smashed it in the beauty category but Sephora and Nasdaq-listed Ulta – which is down 22 per cent year-to-date despite 20.6 per cent sales growth in the second quarter, upgrading its third quarter guidance, and buying back $US300 million of stock in 2017 – are on their toes.

The naturals boom has given rise to its own category. For example, Mineral Fusion is the "number one natural cosmetics brand in the US" and Andalou is the "number one selling facial skin care brand in the US natural channel".

What is the natural channel? It is the network of natural-feel, natural-targeted retailers from co-operatives to speciality shops monitored by Spins, which is the independent authority on sales. This is complemented by Whole Foods' own data. In the language of channels, Shiseido's bareMinerals, a US mineral cosmetics brand acquired in 2010, is regarded as prestige not natural.

BWX Brands US will speak for all the house brands in the American market, "it won't be three separate businesses", Humble has said. He has been able to articulate where growth will come from: exporting more cheap Sukin units, selling more of the new higher-value brands in Australia, and operational savings. Andalou and Mineral Fusion are based 12 miles away from each other, north of San Francisco and some manufacturing will go to BWX's Dandenong site. That makes it a brave short.

But in August (before Andalou), the company's full-year results left some observers wondering if conditions were indeed tougher than they appeared. EBITDA was "normalised" to the tune of $4.2 million of one-off costs linked to buying Mineral Fusion, which got BWX to $26.4 million, or growth of 30.7 per cent. Guidance for 2016-17 was 30 per cent growth in EBITDA.

Still, the 2017-18 guidance issued in August was to "comfortably exceed" the 30.7 per cent 2016-17 rate of EBITDA growth. It has not deviated from that language three months later.
http://www.afr.com/business/bwx-has-high-g...20171111-gzjhol



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: JSB  
 
JSB
post Posted: Nov 10 2017, 07:51 PM
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In Reply To: blacksheep's post @ Nov 10 2017, 06:56 PM

Probably a couple of months early on the trade biggrin.gif hopefully a few arb funds pick up the shortfall and give me a bit of breathing space.

Gonna need some serious organic growth to make those acquisitions look cheap. Hope they're not relying on halving the marketing budget again and Coles's heavy discounting to maintain that ~40% EBITDA margin!

 
 


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