Biscuit Barrell
08 Mar 2016
Re: Insurance payment In my experience of similar situations, the insurance will compensate for loss of business, temporary or permanent. And the upgrade in machinery is often because you can't get the old so the insurance company has no alternative but to upgrade.Let's see how this develops - for me the real downside is that management focus on fixing supply instead of winning new business and there is no compensation for that!
The buzz
08 Mar 2016
Insurance payment Biscuit Barrel,The insurance payment of a whopping £8m is announced today. The damage and disruption to WGB was considerable. Perhaps they were lucky with the timing as not many people decorate when it is snowing - so hopefully not too much business has been lost with wallpaper. However, there is the inability to supply fabric to the furniture manufacturers that could be business that is lost; hence my concern in my original post. The question boils down to has the insurance payment fully compensated WGB for not only the immediate consequences of the flooding - but for business that has been lost for good? £8m in the pocket and a completely refreshed manufacturing set up must go a long way to compensate them.The B
II Editor
22 Jan 2016
NEW ARTICLE: Stock to Watch: Walker Greenbank "Consumer confidence isn't the be all and end all for soft furnishings firm Walker Greenbank, says Edmond Jackson. It's well-placed to prosper, and could even become a bid target.This article is for information and discussion purposes only and ..."[link]
Biscuit Barrell
14 Dec 2015
Re: Flooding The loss of profits will be fully covered and the management will argue about the trend too - as well as the costs of lost momentum. The profits will be hit in the short term and there will be an exceptional credit once the insurance bill is settled.Most importantly, the insurers are on the case although in my experience they may still try and argue their responsibilities.I reviewed a business for acquisition a few years ago which suffered from flood damage and I would say that management had negotiated a settlement that more than covered their losses - but that was my judgement.The real issue is that management will be totally distracted on supply chain rather than growth. However, they will learn how much can be achieved in a crisis - which is a real eye opener.I visited a yoghurt factory in Greece a few years ago - it was a brand new state of the art facility - best in the world. 6 months earlier the old facility had been burnt down. It took management less than 100 days to replace the old with something substantially better and all on the insurance. This is arguably a buy signal!
The buzz
14 Dec 2015
Re: Flooding Hi BB,You clearly know lots more about insurance than I do! I was showing a correct prediction that the shares would open down as I feared that the impact of the disruption would be adverse to business - lost production, possible loss of customers and the loss of the immediate supply of goods - including samples (vital to the US business). Sadly today's RNS confirms a material loss in profits:-"Disruption to the factory is expected to have an adverse effect on the Company's trading performance in the current financial year ending 31 January 2016, with pre-tax profits expected to be approximately 15 per cent lower than current market forecasts before exceptional items. Trading in the following financial year will also be impacted until full printing capacity is restored!I think that this will be mostly a short term effect, but loss of profits and momentum might have a slight adverse result to the the financial spread sheets for prospective earnings - which is assumed to be quite racey. Trading only slightly down at 203-208p which is impressive considering the recent rise in share price.The B
Biscuit Barrell
07 Dec 2015
Re: Flooding Hi TB,I understand your point of view on this. But I have a counter-view:I have been involved in a number of businesses that have experienced similar situations. The primary risk is establishing that the insurance is actually going to cover the risk. Once that is agreed, there is normally some clear financial exposure from the excess. Insurance policies I have worked with in this kind of event might have an excess of £1m for example. But apart from that, the exposure is typically fully covered. Of course insurer and insured will argue about the counterfactual - but I have often seen the company claim in full and face no loss. Unless the manufacturing capability is unique (Is it in this case?) then competitors will step in and co-pack for a period of time so sales will hold steady and the on-costs of co-pack will be covered by insurance. And if the manufacturing facility needs to be re-built, then it can lead to an end point where you have better manufacturing facilities than you started with, courtesy of an insurance payout. Then the biggest risk is that management are focused on repairing the supply chain instead of winning new business.So once we have some comfort that insurance is covering the situation, we need to understand how supply will be maintained, but risks become manageable from that point.
pharmaspecialist
07 Dec 2015
Re: Flooding Flooding is irrelevant to long term holders such as myself as the effects will be temporary, though any price fall could represent an opportunity for new buyers.
The buzz
07 Dec 2015
Flooding Insurance might cover some of the costs, but there is a risk that business may be lost as it goes to other manufacturers. Just in time manufacturing begins to lose its appeal if the factory is down for some time. Plus insurance premiums are likely to increase in the future.In reality the flooding ought to have been half expected and some precautions ought to have been made in anticipation what might be damaged with a modest level of flooding. Of course we do not know that - nor the degree of the flooding. With more bad weather forecast for this week - we do not know when the flooding will go away either.I will show a precautionary weak sell due to risk and also because the share price went up at the end of last week. Once the scale of the problem has been established then the risk to business can be re-assessed and it might present an opportunity to buy back at a lower level?The Buzz.The B
Biscuit Barrell
14 Oct 2015
Re: Good H1 Results I agree - a great set of results. Since 2010 sales and EBIT have grown steadily quarter by quarter. The share price took a long time to reflect this and then seemed in an undue rush as it peaked around 240. It felt overvalued at the time and one analyst said the shares no longer deserved their premium. But the growth in ebit has accerated since then. And as the business appears to me to be sub-scale, growth flows to the bottom line.General economic weakness has not hampered growth so a pick up in the economic climate should benefit the business. Balance sheet is strong now. So if growth in top line is maintained the share price will follow.I topped up this morning.
The buzz
14 Oct 2015
Good H1 Results Another set of good results with both turnover and profits well up, plus a statement of strong trading in the first 10 weeks of the year.In some respects we should expect reasonable results as they are built into the share price, but it is yet another year on year improvement.The B
II Editor
23 Sep 2015
NEW ARTICLE: Trends and Targets for 24/09/2015 " WALKER GREENBANK PLCÂ (LSE:WGB) , a member of the Household Goods Sector looks like it has some more growth to give.. The circled portion of the chart is quite interesting as there was a concerted effort made to move the share above a ..."[link]
Biscuit Barrell
04 Aug 2015
Re: Trading Update Looks very good. And growth seems to have some real momentum behind it again.
The buzz
04 Aug 2015
Trading Update It pounds very positive to ma and in line with the results from Colefax. At last the USA business showed a significant improvement.The B
The buzz
28 Jul 2015
Colefax Colefax has just issued its final results. They jumped 32.5p as the results are good and the outlook given is much more promising than usual.Since WGB operate in the same market as CFX and also produce much of CFX's products, this must also be positive for WGB.As I said previously, I had swung much of my WGB money to CFX - which seems to have performed better vis a vis WGB. I am still waiting for WGB to bid for CFX, although they might have delayed for too long now as the CFX share price is now much higher?The B
Biscuit Barrell
17 Jun 2015
Re: AGM Statement Very positive statement.Go back 12 months and the share price was re-rated downwards when the view was this was going ex growth. Time to reverse that pov?
