SUL - Super Retail Group

[GumbyLearner]

I noticed there was no thread for this stock.

Due to the vast majority of new car sales in Australia being obtained on credit that wont be as easily available now and also rising unemployment I think this stock might have a solid future for the next few years.

SUL has 250 Super Cheap Auto stores across Australia and New Zealand.
They had a 6.3% increase in sales btw 2007-2008, roughly $550 million in total sales.

They have recently spent some marketing cash about $44 million re-furbishing 30 stores Australia-wide.

P/E Ratio: 10.66
Dividend: 0.08
Yield: 5.81%
EPS: 0.24
Market Cap: 275,104,425
Shares Out: 106,629,622

SUL's current external debt is approx. $110 million.

SUL also owns Boating Camping Fishing (BCF) which has 49 stores across Australia and has recently purchased the Gold Cross Cycling chain of stores.

They have recently spent some marketing cash of about $44 million re-furbishing 30 stores Australia-wide.

They announced 17 weeks of 12.2% sales growth to 25 Oct 2008,
comparative year-on-year.

Im sure with many family budgets under pressure and the resulting lack of new car sales. Is it possible that many consumers may decide to service their current vehicles in the yard (DIY) with basic parts like oil filters, plugs, points and replacing things like oil, brake fluid, coolant etc...

This may be one retail stock that might improve sales due to the implosion in the new auto sales. A possible trend-bucker maybe.

They are currently trading at about $2.58 on the ASX.

Will Australians remain as automotive service dependent during the downturn?

Any thoughts?

I dont hold these as yet but have been on my watchlist for a while
Do your own research
As always this is just my opinion!

 

[bloomy88]

Re: SUL - Super Cheap Auto

I agree with you that SUL could be a good buy in current market conditions, especially as it is seen as a discount store that will "beat any advertised price".

From what I have read about them all the broker seem to think they are a good buy, with all 5 brokers on investsmart.com.au recomending it as a buy.

One downside for SUL is that they are in a very competitive industry with companies like Bursons and Repco competing against them.
The purchase of Goldcross may have been mistimed as well as i expect that bike sales will fall in the current economic climate.

At their current share price of $2.30 they could represent a good long-term buy for the future though...
SUL also pay fully franked dividends and at the moment their yeild is approximately 6%
Any thought would be appreciated

Cheers
Bloomy

 

[Out Too Soon]

Re: SUL - Super Cheap Auto

Fortunately I'm not a holder at the moment. sp dropped like a stone yesterday & yet I can't find a reason- no ann, rumours
Any one know what happened?

 

[skc]

Re: SUL - Super Cheap Auto

Fortunately I'm not a holder at the moment. sp dropped like a stone yesterday & yet I can't find a reason- no ann, rumours
Any one know what happened?

SUL's liquidity fluctuates quite a bit... sometimes it's just a hole in the market depth meeting a keen seller. Volume in the past few days are so light it is unlikely to be anything really important.

Gave me a perfect entry as a pairs trade against Harvey Norman... there are no better short opportunities around than shorting a ramping CEO.

 

[Out Too Soon]

Re: SUL - Super Cheap Auto

SUL's liquidity fluctuates quite a bit... sometimes it's just a hole in the market depth meeting a keen seller. Volume in the past few days are so light it is unlikely to be anything really important.

Gave me a perfect entry as a pairs trade against Harvey Norman... there are no better short opportunities around than shorting a ramping CEO.

I'm hoping it's a good buying opportunity, SUL has been good to me in the past & I'm good to them ie: a good customer

 

[GumbyLearner]

Re: SUL - Super Cheap Auto Group

Just thought I would re-visit this thread.

What a trend-bucker these proved to be.

With Aussie car manufacturing and sales at all time low throughout 2009.
It looks like many DIY backyard mechanics went out and bought up on spare parts.

Increase in like-for-like sales last reported 16% growth for 17 weeks to October 24 FY 2009-2010 compared to 2008-2009

Currently sitting on $5.53 a share. Definitely still appears performing well. IMHO

DYOR

Also, divs looking a lot more enticing if you bought in this time last year.

 

[UMike]

Re: SUL - Super Cheap Auto Group

Just thought I would re-visit this thread.

What a trend-bucker these proved to be.

With Aussie car manufacturing and sales at all time low throughout 2009.
It looks like many DIY backyard mechanics went out and bought up on spare parts.

Increase in like-for-like sales last reported 16% growth for 17 weeks to October 24 FY 2009-2010 compared to 2008-2009

Currently sitting on $5.53 a share. Definitely still appears performing well. IMHO

DYOR

Also, divs looking a lot more enticing if you bought in this time last year.

Not that surprised as people are keeping their cars that year or two longer and just maintaining or sprucing them up a bit.

BCF is also a big winner (plus would have a greater profit margin on overall sales I presume)

 

[skc]

Re: SUL - Super Cheap Auto Group

Pretty aggressive sell off to SUL since the half year trading update yesterday.

I actually thought the results weren't that bad.

- Like for like sales growth 6-9% and total growth ~12%.
- EBITDA margin up by 40 to 120 bps
- Group EBITA ~20-21% higher than pcp
- Goldencross cycles underperformed and lost $3.5m + further $2m write down

You can do a lot worst in retail then these figures. Personally I like the Supercheap auto stores, and I think a lot of growth is yet to come in the BCF banner. Also important to remember that these figures were not growth from a low base, but consistent growth year on year.

Is SUL getting super cheap? EPS last year was 30.2c, this year probably ~35c, leaving a PE of 14... Compare that to Harvey Norman trading at similar PE... I would say SUL can probably outperform over the next few years.

 

[GumbyLearner]

Re: SUL - Super Cheap Auto Group

Super Cheap to buy Ray's Outdoors

http://www.theage.com.au/business/super-cheap-to-buy-rays-outdoors-20100427-tojc.html

Super Cheap Auto Group says it will buy outdoor leisure retailer Ray's Outdoors for $54 million, funded through share placements to raise $86 million.

In a statement to the Australian Securities Exchange, managing Peter Birtles said Ray's Outdoors was a strong brand which complemented its BCF (Boating Camping Fishing) brand.

"The company has the capital and systems to accelerate the growth of the business," Mr Birtles said.

 

[subasurf]

Re: SUL - Super Cheap Auto Group

Volume skyrocketed today as the trading halt was lifted and more shares were offered.
Volume was at 92,095 on the 23rd and as of right now it's up at 2,242,343. Jeebus.

 

[GumbyLearner]

Re: SUL - Super Cheap Auto Group

Super Cheap sales motor along.

http://www.theaustralian.com.au/business/super-cheap-sales-motor-along/story-e6frg8zx-1226010996299

STRONG demand for motoring and fishing accessories propelled the Super Retail Group to a 60 per cent increase in net profit to nearly $25 million in the six months to the end of December.

******************************************************************
What a great result, another defying the retail downturn.
Dividends increased to 11.5 cents too!

Well dip me in honey and throw me to the lesbians.

DYOR

 

[clinta44]

Any thoughts on the resent take over of the Rebel sports group?

it will add a good bost to sales but I am not convinced the price was right.

 

[McCoy Pauley]

I'm just undertaking some research into SUL at the moment. It's hard to comment on whether SUL overpaid for the Rebel Group because, at least based on what I've found to date, the average "mum and dad" investor does not have access to the financial records of the Rebel Group.

However, SUL did dilute its shareholder base significantly and also raised a considerable amount of debt to fund the purchase of the Rebel Group. Both are gutsy moves in the current retail environment, though SUL did announce to the market some (on the surface) pleasing numbers yesterday on its first half performance.

Despite the best efforts of spin from the SUL corporate advisers, I'm not too sure whether the acquisition of the Rebel Group is all that complementary to SUL's activities. I think of Super Cheap Auto when I think of SUL, and Ray's Outdoors is also a strong brand - but I do not associate either business with a sporting goods retailer, such as Rebel Sport.

Having said that, apart from Rebel Sport, I struggle to think of many other sporting goods retailers that have more than a couple of stores. You'd have Athletes Foot and Foot Locker, but apart from that I'm struggling. So there would be some brand name recognition in Rebel Sport (I don't know anything about Amart, as I don't live in the States and Territories in which it operates).

 

[skc]

I'm just undertaking some research into SUL at the moment. It's hard to comment on whether SUL overpaid for the Rebel Group because, at least based on what I've found to date, the average "mum and dad" investor does not have access to the financial records of the Rebel Group.

However, SUL did dilute its shareholder base significantly and also raised a considerable amount of debt to fund the purchase of the Rebel Group. Both are gutsy moves in the current retail environment, though SUL did announce to the market some (on the surface) pleasing numbers yesterday on its first half performance.

Despite the best efforts of spin from the SUL corporate advisers, I'm not too sure whether the acquisition of the Rebel Group is all that complementary to SUL's activities. I think of Super Cheap Auto when I think of SUL, and Ray's Outdoors is also a strong brand - but I do not associate either business with a sporting goods retailer, such as Rebel Sport.

Having said that, apart from Rebel Sport, I struggle to think of many other sporting goods retailers that have more than a couple of stores. You'd have Athletes Foot and Foot Locker, but apart from that I'm struggling. So there would be some brand name recognition in Rebel Sport (I don't know anything about Amart, as I don't live in the States and Territories in which it operates).

Don't know if SUL overpaid for Rebel, but I am sure if you buy anything at Rebel you definitely overpaid compared to the Internet. Bought some basketball boots for ~$100 from US including shipping and they sell for ~$215 in various Aussie retailers. RCG (owner of Athletes Food) had a profit downgrade last year so the sporting goods market isn't immune from the downturn.

I've been to SUL shops a few times and they seem awefully quiet for the times that I was there... but I am no petrol head (do petrol heads shop there?) and me buying a few carwash sponges probably means nothing in the whole scheme of things.

Based on first person anecdote, I am not filled with confidence about the prospect of SUL. But their numbers from yesterday were solid, and in fact pretty strong compared to the retail sector in general. They must be doing something right.

 

[McLovin]

They paid $610m for $77m EBITDA. And, and this is a big and, they bought it off a PE group. Based on what I've seen from companies sold by PE. I'm a touch skeptical. The update yesterday was OK, didn't look that exciting though, sales up margins down. The positive number was quantified, the negative number wasn't; surprise, surprise.

I went into a Rebel a few months ago to buy a squash racquet. I picked one up that had been discounted from ~$270 to ~$90. It took about 10 minutes to find a member of staff to get it for me (it was up high).

 

[Tyler Durden]

This article today brought my attention to SUL:

US sports apparel juggernaut Under Armour has tagged Australia as a key growth market that will help fuel its energetic ambitions to double sales to $US4 billion by 2016, making it the latest in a growing invasion of overseas fashion retailers to hit our shores.

Under Armour CEO, founder and Forbes rich-lister Kevin Plank has told investors the international market represented the 17-year-old clothing company's biggest opportunity, with its maiden Australian store slated to open next year and the group also in talks with Rebel Sport to expand their strategic relationship.

BusinessDay can reveal Rebel is close to inking a deal with Under Armour to act as its exclusive wholesale distributor in Australia after taking over the local rights to the brand from Playcorp, a private investment vehicle owned by retail billionaire Solomon Lew.

Under the proposed deal Rebel will sell and heavily promote the brand, also working alongside the Baltimore-based Under Armour as it opens standalone retail stores.

Rebel was purchased by the ASX-listed Super Retail Group in late 2011 for $610 million and is Australia's biggest sports equipment and clothing chain. It sells a limited range of Under Armour apparel.

http://www.smh.com.au/business/american-giant-plans-assault-20130609-2ny37.html

Given the history of the SP, this looks like a decent company.

 

[ROE]

Judging from rebel sale and clearance and promotion I think they may start to find it hard to grow earning
with Rebel sport now ...

Stuff too expensive and people can buy much cheaper from the net

I buy my stuff exclusive from www.wiggle.com.au Spent around $800 last year on that site...
you generally get them 30-50% cheaper .... and once you become a platinum member ..automatic 12% off ...
and they stocked some quality brands that rebel doesn't and half the price

 

[Tyler Durden]

I sold out of this yesterday. I have had concerns for a little while now, both with the global economy (constant money printing in the US, Detroit bankruptcy, slowdown of China) and with the national economy (unemployment appears to be on the rise), so wanted to load off my retail stocks at the right time. My decision was made easier when I read this yesterday:

Australians are the developed world's most frequent online shoppers at international retailers, a global survey has found.

The shift towards online shopping came as more Australians chose to save rather than spend, the annual global survey of almost 30,000 consumers by the Boston Consulting Group found.

The survey, which included 2502 Australian respondents, was another blow to the domestic retail sector, which has struggled in a subdued spending climate and amid weak consumer confidence.

Range, availability and price are key factors in Australians' shopping from overseas web retailers.

About 46 per cent of the respondents said they preferred to save rather than spend, up from 40 per cent last year. At the same time, 54 per cent said they were less inclined to buy new items, a rise from 49 per cent last year.

They said range, availability and price were the key factors in their decision to shop from overseas web retailers.

http://www.smh.com.au/business/australian-online-shoppers-go-global-20130726-2qoll.html

 

[Tyler Durden]

This closed 14% lower yesterday, and went as low as $9.50, as investors were disappointed with results and company downgraded sales forecasts.

Australia's recreational speed boaters, campers and fishermen appear to have closed their Velcro wallets in the past six months and thus played havoc with the sales of this group's biggest supplier - Super Retail Group.

The company, which also owns sporting goods company Rebel, Supercheap Auto, BCF (Boating, Camping and Fishing), Ray's Outdoors and Workout World, has been operating in a parallel universe in the retail galaxy.

While most discretionary retailers have been struggling to contain declines in sales over the past couple of years, Super Retail Group has been a standout performer, increasing sales by 4 per cent to 5 per cent.

It captured the wave of consumers looking for lifestyle products, which included holidaying and hobbies rather than apparel.

Referred to (rather unkindly, I think) as the company that caters to bogans with money, Super Retail has consistently bucked the disappointing trend set by other shop owners.

But on Friday Super Retail fell back to earth - it downgraded sales forecasts and analysts set to work to adjust their earnings estimates to the real world.

The share price dived faster than BCF's heaviest sinker, down 24 per cent in morning trade. Although the share price slaughter abated a bit as the day wore on and the shock wore off, the punishment was severe.

http://www.smh.com.au/business/camp...ds-life-no-picnic-of-late-20140117-310cp.html

 

[ROE]

I start loading up in the $6 dollar range, target 10,000 shares got half of my quota accumulate
then M&A rumor drive it crazy, better half than nothing