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What/who will collapse first in 2018


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HOLA441
3 hours ago, ftb_fml said:

Same.. our local was doing anything between 10 and 30% off. Even at these rates, nothing I looked at couldn't be had cheaper online. A sad sign of the times and tbh you can't really blame the company for their bricks and mortar model becoming non-viable in the face of huge corporate internet sellers using wage-slaves to fire out parcels from massive out-of-town warehouses. 

It wouldn't surprise me if they're discounting to just above cost so as to avoid making an outright loss.. I know from my own line of work that sometimes bulk-buyers / those importing products "grey" or direct from source can afford to retail products for less than it costs smaller retailers to buy them from "official" wholesalers.

I got a usb car cigarette adapter in there at 10% off as I needed it on the day. £12 in Wilko’s, £20 in Smiths (branded), £15 in Maplin (Garmin). Nothing in Poundland. As I usually find Argos lists lots of items but of course there is no stock of the Garmin branded in the actual store for 5 days! Tbh the item would have been cheaper online! I’ve had one melt so I thought I’d get one specified or atleast branded it being power related !

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21 hours ago, Castlevania said:

Toilet paper maker Accrol?

http://www.hl.co.uk/shares/stock-market-news/aim-and-small-cap-news/aim-bulletin/accrol-sees-58-wiped-off-share-price-as-costs-absorb-funding

Their cost cutting exercise has somehow led to costs increasing by 50%. Figure that one out? Pretty sure it's another one of those companies that the Telegraph or the Times suggested their readers should buy.

 

Worth n oting they did shareholders for £18mn in December

' The group reported that it has engaged in discussions regarding debt headroom and resetting covenants with its bank as its net debt is expected to rise to approximately £34m at 30 April despite a gross £18m having been raised from shareholders in December. '

18 hours ago, crashmonitor said:

Things didn't look that bad for Accrol back in April...God knows what they have been up to. The Balance sheet was far from precarious with working capital and long term debt cancelling each other out leaving net assets of 50 million..20 million in plant and property and 30 million in intangibles. Most of these nut jobs have net liabilities once you exclude intangibles.

It now trades on a price to earnings of less than two and a price to book of 25% with regard to the April accounts. Only 13 million in Market cap remains after todays -63% slaughter.

Clearly it isn't going to get close to last year's results and presumably the 50 million assets have just gone up in smoke too.

The balance sheets of the big boys are quite opaque,the smaller ones with less analyst coverage................

17 hours ago, simon49 said:

Poundland going to go soon, some suppliers are taking ther goods back apparently, which isn't a good sign.

Apparently Poundstretcher struggling as well.................

Plymouth Herald 19/3/18

'Poundstretcher has become the latest chain facing problems as even the discount retailers are hit by rising inflation and declining consumer spending.

Credit insurers are now tightening terms for suppliers to Poundstretcher – a move which is generally seen as an indicator of concerns a retailer is about to go bust.

Private equity-owned Poundworld, which has a huge Plymouth store in New George Street, said it was facing “brutal” trading conditions.

Poundworld, which has more than 350 stores, is owned by American buyout giant TPG Capital, but competes fiercely with Poundland and Poundstretcher.

The discount retailer, founded in 1974 as a market stall, revealed losses of £17.1million in the year to the end of March 2017.'

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34 minutes ago, TheCountOfNowhere said:

Another Private Equity success story to add to the long list of Zirp Zombie failures.

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https://wolfstreet.com/2018/03/19/what-are-we-going-to-do-with-mall-reits/

'This is my now classic twice-a-year progress report on the decline of mall REITs. The series began in May 2016, shortly before the peak of mall REITs in July 2016. Their shares started getting hit in August that year, and the pain hasn’t abated since.

All along the way, the industry and its Wall Street analysts soothed our rattled nerves with assurances that the brick-and-mortar meltdown didn’t actually exist, that there were more new stores being opened than closed, that the selloff at each stage was overdone and that these were buying opportunities.

They keep pointing out that online retail is only around 10% of total retail. But they’re hiding the fact that mall retailers are the ones under attack, not gasoline stations, auto dealers, bars, restaurants, grocery stores, and other categories that are considered “online resistant.” And these mall retailers have surrendered a large part of their sales to the Internet – see: Brick & Mortar Meltdown Hits These Stores the Most.

And then there are rumors that leave room for hope. Today’s rumor of hope is that Amazon is considering buying some of the locations of Toys ‘R’ Us, which is being liquidated. Similarly, in 2015, Amazon considered buying some of the locations of RadioShack as it was heading into bankruptcy for the first time. And nothing came of it.

With already too many malls in America to begin with, the brick-and-mortar meltdown is now putting further pressure on them, and investors have taken a huge licking. So here are some of the mall REITs and how they have performed recently, in no particular order, except for the top two:

CBL Properties (CBL): Shares closed at $4.36 today, down 55% from a year ago, down 68% from end of August 2016, and down 83% from May 2013. As part of its earnings fiasco report last November, CBL announced it would slash its quarterly dividend by nearly 25% to $0.20 a share. At today’s share price, the dividend yield is a juicy 18%. But expect further dividend cuts.

Moody’s pointed out last July that 22% of CBL’s square footage was exposed to “distressed retailers,” the highest among of the mall REITs. The other mall REIT up there in this rarefied air of max exposure to “distressed retailers” is Washington Prime Group.

Washington Prime Group (WPG). At $6.26, shares are down 13% year-to-date, 25% from a year ago, 55% from August 2016, and 71% from the peak of $21.49 in May 2014, just after its spin-off from Simon Property Group – a mall REIT (more in a moment) that apparently knew what it was getting rid of. With a quarterly dividend of $0.25 a share, for a dividend yield of 16%, a dividend cut is lining up.

Pennsylvania REIT (PEI): At $9.48, shares are down 36% from a year ago and 63% from end of July 2016. At the current stock price, its quarterly dividend of $0.21 generates a yield of 8.9%.

Tanger Factory Outlets (SKT): At $21.49, shares are down 34% from a year ago and 48% from the end of July 2016. Quarterly dividend: $0.34 a share for a yield of 6.4%.

Kimco Realty (KIM): At $14.25, shares are down 37% from a year ago and 56% since the end of July 2016. Quarterly dividend: $.50, for a yield of 7.8%.

Macerich (MAC): At $57.85, shares are down 10% from a year ago and 35% since the end of July 2016. Quarterly dividend: $0.74 for a dividend yield of 5.1%.

Simon Property Group (SPG), which had spun off the misbegotten Washington Prime Group mentioned above: Shares, at $155.43, are down 7.5% from a year ago and 32% since the end of July 2016. Its quarterly dividend of $1.95 generates a yield of 5.0%.

Taubman Centers (TCO): At $56.91, shares are down 13% from a year ago and 29% from the end of July 2016. Quarterly dividend: $0.66 for a yield of 4.6%.

GGP (formerly General Growth Properties): At $21.52, shares are down 7.2% from a year ago and 33% since the end of July 2016. Quarterly dividend: $0.22 for a yield of 4.1%.

Federal Realty Investment Trust (FRT): Shares, at $116.49, are down 13% from a year ago and 31% since the end of July 2016. Quarterly dividend: $1 for a yield of 3.4%.

Regency Centers Corp (REG): At 56.32, shares are down 14% from a year ago and 32% since the end of July 2016. Dividend: $0.56 for a yield of 3.9%.

Seritage Growth Properties Class A (SRG): Shares, at $34.97, are down 20% from a year ago and 38% from their peak in April 2016. With a quarterly dividend of $0.25, the dividend yield is 2.9%.

The REIT was spun off from Sears Holdings in July 2015 via a rights offering. Shares started trading at $36.02 on July 6. The offering raised $1.6 billion, which was used to fund in part the $2.72-billion purchase of 235 of the most valuable properties and 31 joint-venture interests from Sears Holdings. Seritage initially leased back most of the stores to Sears Holdings. But many stores have since been closed, and Seritage is trying to lease those spaces to other tenants at higher rates. Sears Holdings CEO and largest investor Eddy Lampert is also chairman and major shareholder of Seritage. The transaction didn’t pass the smell test.

In theory, Seritage would make a killing since it had acquired many of the best properties in a sweetheart deal. But the decline in value of retail properties since then might have x-ed out that theory.

This lineup of REITs shows the bifurcation: Some REITs, whose malls are more exposed to “distressed retailers,” have gotten totally crushed, with shares down over 70% or 80% from their peaks, and have been or will be forced to cut their dividends to preserve capital. The REITs with the strongest malls have only gotten crumpled, instead of totally crushed, with shares down “only” around 30%.

The big-fat dividend yields are very tempting, but a drop in the share price on a bad day can easily wipe out the value of the dividend of several years. In addition, if the dividend yield is too high, the company will slash the dividend, and the market slashes the shares. This isn’t going to happen tomorrow, knock on wood, but the brick-and-mortar meltdown will continue for years, and mall owners will have to figure out how to deal with it.'

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Carpetright, Moss Bros and Kingfisher hit by high street retail woes

The gloom on the high street deepened on Wednesday as struggling Carpetright said it would close more stores, Moss Bros issued a stark profits warning, B&Q reported falling sales and profits, and Mothercare said it remained in talks with its bankers.

https://www.theguardian.com/business/2018/mar/21/carpetright-moss-bros-kingfisher-high-street-retail-mothercare

Edited by Errol
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1 hour ago, Errol said:

Carpetright, Moss Bros and Kingfisher hit by high street retail woes

The gloom on the high street deepened on Wednesday as struggling Carpetright said it would close more stores, Moss Bros issued a stark profits warning, B&Q reported falling sales and profits, and Mothercare said it remained in talks with its bankers.

https://www.theguardian.com/business/2018/mar/21/carpetright-moss-bros-kingfisher-high-street-retail-mothercare

'At B&Q, which is owned by Kingfisher, sales dropped by 5.1% as the chief executive, Véronique Laury, described the outlook for the UK as “uncertain”. Kingfisher’s profits for the year to end January were down by 10% to £682m. '

 

If sales are down 5% then I suspect the bottom line will suffer a lot more than 10%

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2 minutes ago, Sancho Panza said:

'At B&Q, which is owned by Kingfisher, sales dropped by 5.1% as the chief executive, Véronique Laury, described the outlook for the UK as “uncertain”. Kingfisher’s profits for the year to end January were down by 10% to £682m. '

 

If sales are down 5% then I suspect the bottom line will suffer a lot more than 10%

They also own Screwfix which is still growing.

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Imperial Brands is worth a mention, not because I think it will fail, but a Company in crisis nevertheless. This started this financial  year as the Mother of all Blue Chips and Woodford's favourite. However, the fall in the share price has been unrelenting on fears over tobacco's future and vaping health scares. From almost forty quid to twenty-three quid. Not as a flash crash but a sickening crawl down, totally unrelenting . Boiling frog.

It's got assets of 31 billion but worryingly 25 billion of those are in intangibles like brand value. It also has 25 billion in debt leaving net assets of just 6 billion. The Market cap ( 22 billion) still leaves a racy price to book of nearly four and p/e is 16 before the usual exceptionals ( never sure about that)takes it to single digits.

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13 minutes ago, Errol said:

25 billion in debt?

More insanity. When did that amount of debt ever become the norm or sensible?

Perhaps I should have used the words liabilities to be correct. Still 12.5 billion is common or garden debt, 4 billion in long term provisions and other long term liabilities and 8.5 billion in current liabilities ( owed to suppliers etc). It is nevertheless a highly geared Company.

Edited by crashmonitor
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1 hour ago, crashmonitor said:

Imperial Brands is worth a mention, not because I think it will fail, but a Company in crisis nevertheless. This started this financial  year as the Mother of all Blue Chips and Woodford's favourite. However, the fall in the share price has been unrelenting on fears over tobacco's future and vaping health scares. From almost forty quid to twenty-three quid. Not as a flash crash but a sickening crawl down, totally unrelenting . Boiling frog.

It's got assets of 31 billion but worryingly 25 billion of those are in intangibles like brand value. It also has 25 billion in debt leaving net assets of just 6 billion. The Market cap ( 22 billion) still leaves a racy price to book of nearly four and p/e is 16 before the usual exceptionals ( never sure about that)takes it to single digits.

It's the kiss of the death....saying it like that.

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