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Still flat out at the mill. Next trading update should be a good one.
WGB wallpaper business is trading well, back to pre lockdown levels at least. My only word of caution is that John Lewis are a major customer who have their own problems at the moment.
lemonade311: Its in reuters news (as well as everywhere else - not sure what you're reading!
Shares in the group, which owns B&Q and Screwfix in Britain and Castorama and Brico Depot in France and other markets, rose as much as 12.5% after it reported particularly stellar sales of plants, compost, decking, paint, wallpaper and tools.
https://www.reuters.com/article/kingfisher-outlook-idUSL5N2ET138
where did they mention wallpaper? I only see paint which is similar though.
> The key risks to availability are now driven by exceptional and volatile demand within the paint, outdoor and building materials ranges, where vendors are challenged in keeping up with recent high demand levels.
Recently we've had trading updates from EVE Beds ad now Kingfisher. They both had strong performance from home wear sector and Kingfisher particularly mentioned wallpaper. WGB is trading at around NAV so really cheap .
People during lockdown and work from home are doing home improvements. Wallpaper sales booming. WGB own the William Morris brand amongst others. If you have not heard of the brands on this site speak to wife and she will fill you in. This is all top end stuff: https://www.walkergreenbank.com/
Why Strong buy? I went through all the shares in AIM and FTSE to get a list of shares trading below NAV (eg NAV per share higher than actual share price) and WGB was the only QUALITY company (makes a good profit, has great brand (WIlliam Morris), and is big internationally) that is trading below NAV ... The others will be a bit naff or in travel or energy or retail etc etc.
Today we've had two directors buy. The share price has risen a bit and quite a lot of trades going through for 100,000 at 42p. I'm not sure where this is heading to but other companies of this quality would trade at least TWICE NAV so might well get into the 80s (eg double)... but who knows - just a guess.
To add to Chrishutch,
* No long term debt
* Price to book of 1
* Price to tangible book 2.1
* PE 8.1
* Sales increasing 35% over last 5 years
* Some insider buying over the last year
Would like to see some cost saving somewhere to increase the operating margin, but this share could be ready to take off. Finger crossed the next set of results are positive. I'm equally in for £3k, but will be watching closely to increase my position.
Interesting price action, guess the low number of shares moves the price around. With any luck it will try to fill that gap to 85p
Looks interesting
* 61.9% broker target / Out Perform
* 70 Million shares in issue
* Results due soon
* New Chief Executive Officer
* Impressive Major Shareholders
* Luxury brands
The chart is showing a bullish inverted hammer and it appeared in my data mining list. Should not take much to move it, if it starts to climb I will add some more but in for just over 3K to start
The trading update was not too bad at all and a lot of progression on things like pattern design royalties repeat revenue increases and expectations will be met. Seems almost brutal, of course stormy waters with Brexit but at the same time WGB is increasingly global with no net debt. Spread sucks but looks like good value to me. Any thoughts folks?
"This is by far our largest licensing agreement to date in the apparel sector and underlines the inherent value of our design archives"
Another useful royalty and going with H&M should not degrade the W Morris brand. The link to the Vogue article
https://www.vogue.co.uk/gallery/h-and-m-morris-and-co-collaboration
shows quite a few items. WGB seem to have again been very good at squeezing yet more juice from the royalty 'lemon'. I note that H&M had a previous collection with GP & J Baker so one must presume that was successful and therefore H&M have high expectations for its W Morris collection.
This will not affect the wallpaper (and fabric??) turnover, which I suspect is being directly affected by BREXIT (that has been blamed for reduced trading in the housing market). On that premise, once BREXIT is out of the way, there will be some pent up demand that may help WGB's turnover?
The Buzz
I went to the CFX AGM yesterday. They have many close similarities with WGB. Their trading statement showed good business in the USA but more challenging European and UK markets. The USA business is benefiting from the 'booming' US economy. Much uncertainty on the way ahead due to BREXIT. I asked why they they are doing so well whereas WGB seems to have its share price almost a quarter of where it once had been. Part of the problem would appear that WGB lost a key person in charge of brands. I admitted that I had completely sold out when WGB was over £2 but had been buying back in at around 70p. I had the impression that they agreed with my assessment.
CFX regularly buy back their own shares but they are no longer finding large chunks of shares for sale and it is not cost effective to do so at the current share price. Ironically WGB once had a valuation large enough to contemplate buying CFX but now it is valued at only £46m whereas the market cap for CFX is now larger at £53m. Pure speculation on my part but my thoughts are that WGB is still a bit big to buy outright now, but CFX could buy a stake in WGB and put a bit of their magic in the direction of WGB?? Their results for the end of April 2017:
http://www.lse.co.uk/share-regulatory-news.asp?shareprice=CFX&ArticleCode=hibfxqcq&ArticleHeadline=Preliminary_Results
showed cash of £9.2m, so some activity cannot be ruled out - there is currently enough cash to buy 20% of WGB at the current valuation. There are many areas where consolidation would save lots of cash, such as both of them having showrooms in the same city (When I went to Boston both companies had space in the same multi company show room!!).
As I said in the earlier post, I would add if the price fell, so I have just bought a small top-up of 4k shares at 64.75p, but have plenty of cash in reserve if the price falls a bit more. I am still way off my previous holding size. I think that the share is now significantly under valued and many of the weak holders now seem to have gone judging by the low turn over... but I could be wrong! I have posted my AGM report for the CFX AGM on the ii web site.
The Buzz
Subsequent 3 RNSs state that Ennismore now have subsatantial 5.7%. Half year results out on 10th oct, hoping for an improvement and suspect that any more bad news is probably in the price already.
Oh I think that I got this back to front! Apologies.
I often struggle with these RNSs as they always seem to have a different layout!
OK it means that Investec have reduced their holding. One can only guess why - but the market has absorbed the sales on a relatively small part of their holding and the price of WGB seems to have stayed steady. I think that is all that I can constructively add, other than now they are just below 11% they can sell another 1% before they have to declare any further sales. So I suppose that this is a slight negative. However, my perception is that WGB is now priced so low that there should be lots of other buyers out there, plus Investec will be getting a relatively low price on sales at this level.
The Buzz
This morning's RNS tells us that Investec have increased their shareholding from 10,99% to 11.74% crossing the 11% threshold. A good sign that a major shareholder has significantly increased their shareholding - they ought to be very close to lots of data and would not have added so many shares had they not been convinced that it is a good buy. I think that the current share price is very depressed and has many adverse factors built into it - and presumably also any potential fall out from the House of Fraser that wounded Burbury so much - not that I am aware of any WGB outlets in those stores. I think that Investec can further increase their holding to 11.99% without telling the market, so potentially some more support is there at the current share price.
The Buzz
AS expected from previous RNS, turnover was down a bit.
HOWEVER read about the licensing income:-
"Whilst the Board materially revised down its expectations for licensing income in the current year, as detailed in the trading update issued on 24 July 2018, a number of new licence agreements were signed in the first half and licensing income in the current financial year will represent a substantial upward step change compared with last year."
Qoted spread much more respectable at 75-79p. With the $ so strong against the £ and apparent 4% GDP increase in the US, there is hope for higher exports to the USA. I also like the news about a strong market in Japan. Plus 11% increase in production powered by exports looks to me to continue to do well with the floundering £. Conclusion - WGB is a firm hold for me and will top up on weakness.
The Buzz
Well things might not be as bad as fist sight. CFX is their big competitor and operate in similar markets.
CFX have just issued and RNS for their preliminary results. This part of the forward statement (from the always very cautious CE) ought to be reflected in part by WGB's future performance:-
""The Group has made good progress over the last twelve months despite generally difficult trading conditions in most of our major markets. Our largest market, the US, is showing signs of continued growth and this should underpin our performance in the current year. .....In our other major markets, the UK and Europe, we are experiencing increasingly difficult trading conditions and we expect this to offset some of the anticipated growth in the US"
The Buzz
buzzfromiii i like your summery , i am no expert but on reading the RNS that was snuck in before close yesterday evening and again today , this looks likely to go lower.
Yes I have been in this share for as I inherited my grandfather's small holding. Saw loads of mess ups and realised when sub 10p that things had gone silly so bought loads and more upwards over 30p - this was a 20 gonger for me. Sold out completely over £2 as felt fully valued. The company was made by fortuitous purchase of Sanderson. They seemed to walk on water for quite a while. Even disasters worked well for them with big insurance clams and shiny new equipment. They even reached a point of possibly acquiring CFX - they were certainly doing better than them in the USA at the same showrooms much to the chagrin of David Green. It was only a matter of time before something went wrong and they would be bound to fall from grace in an uncomfortable manner.
That said the company has a lot more intrinsic value with a handsome royalty income - the company when I bought at around 20p a share was a much riskier company and short of cash - its like comparing a lemon then to an orange now. When I had tour round the NY shop I was impressed with the set up there and the unrealised potential. For what it is now worth the AGM RNS says trading is good in the USA. Now if they hit £10m profit that is still a good profit but one does wonder how Clarke and Clarke are performing... but my local village shop still survives selling WGB products - so there is still a good local following for quality furnishings. If one were to ask me, with this hot weather no one wants to do decorating, so I suspect that the recent trend is a bit of a short term dip in my view. I cannot see them dropping the dividend so the yield should be good.
What I am really coming on say was that I had a small repurchase of WGB this morning - 5k shares at 70p and another of 3317 shares at 72.94p still a shadow of my earlier holding. I expect that the share mark down to have been savage leaving plenty of scope for recovery else a good entry price. Strangely this approach has often worked out really well for me in the past. Current spear at 08:59 is 73-78p so I think that the price has hit bottom at 70p and has only upwards to go - and fortuitously I did not buy to see the price drift even lower so I am already more or less in profit already.
The Buzz
I think this has a lot further to fall , was way over priced IMHO. 20p ish in 2009
Surprised no one posted on the bad RNS sneeked out late today that caused the crash in the share price. By chance I posted on the ii web site saying that the share price was rather weak at around 101-103p (rather suspicious of insider knowledge!!) shortly before the RNS. There I gave my reasons for being cautious - rarely have I spoken such prophetic words so shortly before they became material to the share price!! Perhaps that was partly my long association with WGB - I had sold out above £2 a share as I felt that they were fully valued with the finances starting to look a bit stretched and too much growth in-built into the price. I am still waiting for the right time to come back. What is truely shocking is the speed of the change in the directors' opinion on outlook, so soon after the AGM statement. Hardly surprising that the share price bombed.
The Buzz
I've not heard any more bad news! Has the production/fire issue sorted?
http://www.iii.co.uk/articles/460487/could-there-really-be-63-upside-walker-greenbank
How this possible in the space of 6 weeks ??? They must have known the issue ?? In its interim results announcement on 4 October 2017, the Company stated that order intake was growing ahead of last year and on an improving trend in the run-up to the key autumn selling period. Since that announcement, momentum in order intake has not been sustained and Brand sales in the UK, excluding Clarke & Clarke, have weakened significantly against management's expectations. The Company is more than half way through the key autumn selling period and, owing to the disappointing UK Brand sales and knock-on effect on manufacturing, the Board now expects that profits for the year ending 31 January 2018 are likely to be approximately 10 per cent lower than its expectations.