SHM - Shriro Holdings

[System]

Shriro is a leading Kitchen Appliances and Consumer Products marketing and distribution group operating in Australia and New Zealand. The Group markets and distributes an extensive range of products under company-owned brands (including Omega, Robinhood, Everdure and Omega Altise), and third-party brands (such as Casio, Blanco and Pioneer) in Australia and New Zealand.

Shriro employs approximately 265 FTE employees, including around 100 sales and marketing staff in Australia and New Zealand. Shriro also has an additional 8 team members based in China, focusing on product sourcing, quality control and procurement.

It is anticipated that SHM will list on the ASX during June 2015.

http://www.shriro.com.au

 

[skc]

I also don't like companies that distribute brands that they don't own. You're basically building the business in a territory for the brand owner and giving them a free option to reap the benefits if it's successful long-term. It's great while it lasts for the distributor if it's a good brand, but look at say Oroton (ORL) for instance, which was decimated when Ralph Lauren ripped up the agreement and took it back in-house.

Same here. It's cheap on most valuation measures but it's not really a business that has any sustainable competitive advantage to speak of. The only asset is really the distribution agreements. It does have some house brands but again, not exactly unique offerings. And in the era of eBay and grey imports... sole distribution of Casio G-shocks also feels neither here nor there.

To me this is the kind of stock that you buy when it is cheap (may be now it is), but definitely a stock that you sell when it is no longer cheap (as opposed to holding for long term growth). Noting also that it has only reported for the first time since listing so it doesn't have the track record as a listed company yet.

edit: also a few rumours floating around that the two major director / management shareholders may be willing to sell down their holdings (limited to 25% as per "trading window update" announcement).

Not exactly a rumour as it was clearly stated that the directors are considering selling... and the share price crashed >20% just on that. Not exactly a liquid stock though so doesn't take much to move it a long way.

 

[Ves]

Not exactly a rumour as it was clearly stated that the directors are considering selling... and the share price crashed >20% just on that. Not exactly a liquid stock though so doesn't take much to move it a long way.

Thanks for clarifying!

I view this in a similar way as I do PAS Group (PGR). I'm sure I wrote some thoughts on that at some point if anyone is interested. Both have distribution agreements + house brands they own.

 

[McLovin]

I don't like these hodge podge sort of companies. If they just sold kitchen appliances then they might be a good way to play a construction boom, if they just sold Casio G Shock watches then they might be a way to play a consumer boom. But they do both, and, in my experience, they end up with one segment firing and the other lagging and vice-versa.

And of course the comments about them being a distributor and having no real IP of their own are very valid, especially in the days of the internet. They're really just a logistics company.

 

[skc]

Thanks for clarifying!

I view this in a similar way as I do PAS Group (PGR). I'm sure I wrote some thoughts on that at some point if anyone is interested. Both have distribution agreements + house brands they own.

MCP is another one I have in mind in a similar vein. Below is the 20 year share price chart... hence my comment about SHM being a buy low / sell high type stock as opposed to a true long term holding.

I don't like these hodge podge sort of companies. If they just sold kitchen appliances then they might be a good way to play a construction boom, if they just sold Casio G Shock watches then they might be a way to play a consumer boom. But they do both, and, in my experience, they end up with one segment firing and the other lagging and vice-versa.

I think they make decent private / family-owned companies.... at least you'd have control.

 

[Gringotts Bank]

Large order has attracted the price towards it. Will it get eaten before close? Nice chart.

 

[The Triangle]

If I'm correct this would have paid out 64 cents of dividends from 2015/16 when the share price was $1 SP now is 83 cents. Not a terrible investment if you ask me. Currently paying a 4 cps fully franked dividend for EOFY and paid 6 cps at the half. I don't think that's going to stay the same given in the investor presentation the statement below:

FY23 EBITDA is expected to be down by 25% on FY22. This is caused by salary increases, supply chain cost increases, the Blanco brand exit and the projected subdued consumer spending.

Still, it looks very interesting considering there's zero debt.

 

[So_Cynical]

If I'm correct this would have paid out 64 cents of dividends from 2015/16 when the share price was $1 SP now is 83 cents. Not a terrible investment if you ask me. Currently paying a 4 cps fully franked dividend for EOFY and paid 6 cps at the half - looks very interesting considering there's zero debt.

Trading at 77c now, zero debt, 12M in cash and something like 180M in revenue, very profitable and a great dividend payer.

 

[divs4ever]

bought mine in October 2018 @ 63 cents

has been a useful addition to the 'bottom drawer income stream '

DIVIDEND TYPE	DIVIDEND AMOUNT ($)	FRANKED	EX-DIV DATE	PAY DATE
Final	0.040	100.00%	08/09/2022	30/09/2022
Interim	0.060	100.00%	16/03/2022	07/04/2022
Final	0.060	100.00%	09/09/2021	30/09/2021
Final	0.040	100.00%	16/03/2021	07/04/2021
Interim	0.030	100.00%	03/09/2020	23/09/2020
Final	0.030	100.00%	06/03/2020	30/03/2020
Interim	0.040	100.00%	03/09/2019	23/09/2019
Final	0.030	100.00%	18/03/2019	05/04/2019

of course things MIGHT get a bit rough in the next few years

 

[So_Cynical]

bought mine in October 2018 @ 63 cents

has been a useful addition to the 'bottom drawer income stream '

DIVIDEND TYPE	DIVIDEND AMOUNT ($)	FRANKED	EX-DIV DATE	PAY DATE
Final	0.040	100.00%	08/09/2022	30/09/2022
Interim	0.060	100.00%	16/03/2022	07/04/2022
Final	0.060	100.00%	09/09/2021	30/09/2021
Final	0.040	100.00%	16/03/2021	07/04/2021
Interim	0.030	100.00%	03/09/2020	23/09/2020
Final	0.030	100.00%	06/03/2020	30/03/2020
Interim	0.040	100.00%	03/09/2019	23/09/2019
Final	0.030	100.00%	18/03/2019	05/04/2019

of course things MIGHT get a bit rough in the next few years

I have some space in my bottom draw opening up, SHM certainly a candidate, i dont like the sector but cannot argue with the results and consistency, factoring in the downside potential for a 50% cut in the average dividend, gross yield will still be over 7% .

 

[divs4ever]

I have some space in my bottom draw opening up, SHM certainly a candidate, i dont like the sector but cannot argue with the results and consistency, factoring in the downside potential for a 50% cut in the average dividend, gross yield will still be over 7% .

have a fairly large proportion of the portfolio in the consumer discretionary sector , DESPITE subscribing to the 'retail is dead ' school of thought

some of those entry prices ( and therefore div. yields )have been so darn tempting

 

[divs4ever]

KITCHEN APPLIANCES EXIT IN AUSTRALIA
Shriro Holdings Limited (ASX: SHM or the “Company”) wishes to announce a change in business
operations, it has decided to exit the kitchen appliances division in the Australian market only.
Shriro has found this to be a competitive segment of the consumer goods market in Australia with
many well capitalised global manufacturers in this industry. The revenue from kitchen appliances
was $37M for the 12 months to 28 February 2023. Shriro’s margin has been increasingly squeezed
in the kitchen appliances products due to market pressure resulting in it being a loss-making part of
Shriro’s business. The loss of a major retailer for the Omega brand was the catalyst for deciding to
exit the kitchen appliances product category in Australia.
The Company now intends to restructure the business, including closing its Dandenong warehouse,
which will result in some one-off costs in FY23. This will ensure the business continues to operate
efficiently and will offset the impact of the loss of revenue. The exit will not negatively impact the
Group’s profit from 1 Jul 2023 onwards, however there will be a release of cash from the debtors
and inventory of approximately $12M, collected in the first half of 2024.
The New Zealand appliances division continues to trade well and dominates in the laundry tubs
market and will continue with business as usual.
The Board wishes to thank the appliances staff for their many years of service which have made the
brands Omega and Robinhood household names.
As part of Shriro’s review of its capital allocation Shriro will continue to focus on its global
expansion of the seasonal business which includes BBQ products, its distribution business with
Casio (AU and NZ) and Pioneer (NZ), its New Zealand appliances division and pursuing organic
and inorganic growth opportunities.


=================================================================================

DYOR

i hold SHM ( bought some in October 2018 @ 63 cents )

 

[divs4ever]

SHRIRO HOLDINGS LIMITED (ASX: SHM)TRADING AND STRATEGY UPDATE

17 July 2024

Shriro Holdings Limited (ASX: SHM or “Shriro”) details its seasonal products strategy and provides guidance on its FY24 forecast results.

SEASONAL PRODUCTS STRATEGY

Without the contributions towards expenses from the exited Australian Appliances business,Shriro has had to right size the costs of its seasonal products which includes BBQs, Robinhood,pizza ovens, cooling products and heaters.

To do this, Shriro has developed a new strategy focusing on global sales; new product development and intellectual property; marketing to end consumers in each market; and opportunities through distribution partners.

In Australia, Shriro will exit its direct sales and in-house distribution effective from 30 June2024 by appointing an Australian distributor, Worldwide Appliances Pty Ltd (known asEurolinx).

Eurolinx specialises in importing quality kitchen, laundry and outdoor appliances for the domestic market of Australia.

The Eurolinx brands have a rich heritage aimed at the high-end consumer market.

Shriro’s US focus will be to distribute in the key south-east market, primarily Florida and to provide both an online and in-store offering. Shriro has entered a cooperative arrangement with Blaze Grills, owned by BBQ Guys, the number one on-line seller of premium grills in theUS, to represent the Everdure brand in that market.

TRADING UPDATE

Shriro previously forecast FY24 EBITDA in the range of $15M to $17M.

For FY24, Shriro anticipates achieving approximately $15.7M EBITDA , before any transition costs from the strategy outlined above are deducted.

The Covid period brought forward consumer purchases in outdoor homeware products, as a result retailers were overstocked throughout FY24.

The subdued global demand for BBQs and other outdoor homeware products negatively impacted revenue of the seasonal products. In response, Shriro focused on retailer sales, or sell-through of these products, which required some discounting and extra promotional activity.

Management expects the retail/distribution channel stock levels to normalise in FY25.

SHRIRO HOLDINGS LIMITEDLevel 7, 67 Albert Avenue, Chatswood, NSW, 2067 Australia Tel: +61(2) 9415 5000 Fax: +61(2) 9415 5001Website: www.shriro.com.au ACN 605 279 329

Releases of new product are expected in FY25 and FY26.

Shriro forecasts growth in seasonal products over this period. As a result of the new seasonal product strategy and subsequent restructuring, there is approximately $1.2M of one-off costs associated which will be recognised in FY24.

The cost relates to redundancies, asset impairments, warranties and other costs associated with the transition to the new distributor in Australia.

Consequently,Shriro’s FY24 EBITDA is anticipated to be $14.5M after accounting for these costs.

There will be ongoing cost savings post implementation of the new strategy and restructuring which will be quantified in our FY24 results announcement.

The above forecast numbers are subject to audit.

For more information, contact:

Tim Hargreaves Shane Booth(02) 9415 5000 (02) 9415 5000timh@shriro.com.au shaneb@shriro.com.au

i exited this in April 2023 ( to help fund the farm purchase ) @ 71 cents ( so a small profit plus those divs when i held )