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Willy Weasel

Tesco's Debt Binge About To Come Back And Bite It?

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From Bloomberg:

http://www.bloomberg.com/apps/news?pid=206...id=aVK66flENfNY

“Tesco never get to the point where they generate cash,†said Mitchell. “At the end of every year, they have more debt than they did at the start because there’s always new markets to invest in. I used to be a big fan, but there is a lot to be concerned about.â€

Sound familiar?

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From Bloomberg:

http://www.bloomberg.com/apps/news?pid=206...id=aVK66flENfNY

“Tesco never get to the point where they generate cash,†said Mitchell. “At the end of every year, they have more debt than they did at the start because there’s always new markets to invest in. I used to be a big fan, but there is a lot to be concerned about.â€

Sound familiar?

very familiar.

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Guest มร หล&#3
From Bloomberg:

http://www.bloomberg.com/apps/news?pid=206...id=aVK66flENfNY

“Tesco never get to the point where they generate cash,†said Mitchell. “At the end of every year, they have more debt than they did at the start because there’s always new markets to invest in. I used to be a big fan, but there is a lot to be concerned about.â€

Sound familiar?

They've spent a fortune, I mean a fortune, in Thailand. Tesco Lotus. They'll get burned as all foreign firms do here. When the King dies massive upheaval and I can see Tesco getting booted out the same as Hutchinson Telecom did after they built the mobile network here for Khun Thaksin's AIS.

They're quite expensive too. More than Makro by a long shot.

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They've spent a fortune, I mean a fortune, in Thailand. Tesco Lotus. They'll get burned as all foreign firms do here. When the King dies massive upheaval and I can see Tesco getting booted out the same as Hutchinson Telecom did after they built the mobile network here for Khun Thaksin's AIS.

They're quite expensive too. More than Makro by a long shot.

But do they sell marmite and cadbury's dairy milk?

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But do they sell marmite and cadbury's dairy milk?

Vegemite . . . sometimes, at a ridiculous price. Dairy Milk, the fake stuff made in Indonesia.

They are good for furniture for kids bedrooms. 7000 Baht I bought a bed, mattress, wardrobe, desk, office chair, bookshelves, bedding, other bits and pieces. £135.

Had to put it all together and swore a bit, but it came together nicely.

Hilarious when the neighbours come round. They marvel at the Tesco Value shite furniture in the kids room and totally ignore the locally made teak stuff. :lol:

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Hilarious when the neighbours come round. They marvel at the Tesco Value shite furniture in the kids room and totally ignore the locally made teak stuff. :lol:

True that..........hohaw....modernnnn!

Big C and Carrefour still hanging on?

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Vegemite . . . sometimes, at a ridiculous price. Dairy Milk, the fake stuff made in Indonesia.

They are good for furniture for kids bedrooms. 7000 Baht I bought a bed, mattress, wardrobe, desk, office chair, bookshelves, bedding, other bits and pieces. £135.

Had to put it all together and swore a bit, but it came together nicely.

Hilarious when the neighbours come round. They marvel at the Tesco Value shite furniture in the kids room and totally ignore the locally made teak stuff. :lol:

:lol:

and well done me for derailing this thread. <_<

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Tescos have a dizzingly wonderful business model for cash generation. They get supplied a tin of beans and agree to pay the supplier 60/90 days later. They then sell that tin of beans and get your cash instantly.

Imagine all the sales going through Tesco’s in a 60 day period, all of that is pretty much a free cash balance. That’s the reason they expand so fast, its an awesome business model. I can only hope these articles have an impact, I would love to be able to buy Tesco’s shares at a decent rating, it’s a shame they always trade on such a premium.

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:lol:

and well done me for derailing this thread. <_<

Sorry Bob :(

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Tescos have a dizzingly wonderful business model for cash generation. They get supplied a tin of beans and agree to pay the supplier 60/90 days later. They then sell that tin of beans and get your cash instantly.

Imagine all the sales going through Tesco’s in a 60 day period, all of that is pretty much a free cash balance. That’s the reason they expand so fast, its an awesome business model. I can only hope these articles have an impact, I would love to be able to buy Tesco’s shares at a decent rating, it’s a shame they always trade on such a premium.

Has the drastic drop in IRs affected this business model at all?

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They've spent a fortune, I mean a fortune, in Thailand. Tesco Lotus. They'll get burned as all foreign firms do here. When the King dies massive upheaval and I can see Tesco getting booted out the same as Hutchinson Telecom did after they built the mobile network here for Khun Thaksin's AIS.

Well Thailand is their main overseas venture, but I suspect they have also spent a fortune cozying up to opposition leaders too.

Thailand is nothing but corrupt at every level of government, a few bungs here and there should insure their survival.

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No need for you to apologise Mr Parry. I should just keep my big marrff shut.

It's just that . . . well . . . I like to chat. :)

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Has the drastic drop in IRs affected this business model at all?

Their self financing largely. They get money they spend it on expansion. The drop in IR may have encouraged them to borrow attentional cash lately so long as they can invest it at a higher rate. But it has been a couple of years since I went through their accounts. I think I will order a copy now.

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Tescos have a dizzingly wonderful business model for cash generation. They get supplied a tin of beans and agree to pay the supplier 60/90 days later. They then sell that tin of beans and get your cash instantly.

Yeah, it's an enormous amount of free cash but surely it's a business model that relies on a high level of stability. Three or four months of instability could prove fatal?

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Yeah, it's an enormous amount of free cash but surely it's a business model that relies on a high level of stability. Three or four months of instability could prove fatal?

Yes, But do you foresee a 3 or 4 month period where millions of people across the country change the habits of 25 years?

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Their self financing largely. They get money they spend it on expansion. The drop in IR may have encouraged them to borrow attentional cash lately so long as they can invest it at a higher rate. But it has been a couple of years since I went through their accounts. I think I will order a copy now.

They aren't self financing at all; they, and most of the other big supermarkets, are financed by their suppliers. And many are aware of, and p!ssed off by this. I know of quite a few companies mainly in the ethnic groceries arena that refuse to deal with them.

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Their self financing largely. They get money they spend it on expansion. The drop in IR may have encouraged them to borrow attentional cash lately so long as they can invest it at a higher rate. But it has been a couple of years since I went through their accounts. I think I will order a copy now.

The whole point of the article I posted is that it isn't self financing. They are getting deeper and deeper into debt every year. Their notorious UK land bank is going to need a big writedown as well...

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Terry Leahy is a relation of mine.

I'll get a family member to quiz him about this at the next family do :)

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Terry Leahy is a relation of mine.

I'll get a family member to quiz him about this at the next family do :)

Don't talk shop at family do's!

Blimey!

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From Bloomberg:

http://www.bloomberg.com/apps/news?pid=206...id=aVK66flENfNY

“Tesco never get to the point where they generate cash,†said Mitchell. “At the end of every year, they have more debt than they did at the start because there’s always new markets to invest in. I used to be a big fan, but there is a lot to be concerned about.â€

Sound familiar?

Yes but did all the senior execs get a bonus for this astute financial planning?

Remember only a wealth company could keep on creating more and more debt.

Debt is the road to true wealth remember.

It's not like it's just another fad economic idea in which everyone jumped on the bandwagon, no this is the real deal you can only be truly wealthy if you have debt.

It's the economic miracle we've all been waiting for.

Edited by interestrateripoff

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They aren't self financing at all; they, and most of the other big supermarkets, are financed by their suppliers. And many are aware of, and p!ssed off by this. I know of quite a few companies mainly in the ethnic groceries arena that refuse to deal with them.

Exactly what I said in my first post.

They are bullies without doubt, but they are a good business model.

The whole point of the article I posted is that it isn't self financing. They are getting deeper and deeper into debt every year. Their notorious UK land bank is going to need a big writedown as well...

Perhaps, I have just ordered the accounts and will report back once I've had a good look.

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Yes, But do you foresee a 3 or 4 month period where millions of people across the country change the habits of 25 years?

Yes, I think something like the '98 asian crisis, the 2002 Argentina collapse could happen here. If this happens perhaps Mr Patel's corner shop would have more chance of surviving than Tesco.

I foresee bond market failure......possibly pig flu becoming far more deadly.

I don't foresee black swans but then that's the point isn't it!?

Great strength can become a great weakness in a changed circumstance.

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