WOW - Woolworths Group

[finicky]

Further to Market Matters afternoon report:

Woolworths (WOW) $30.81​

WOW -6.1%: A win for consumers but not for shareholders today, with Woolies stepping up discounting which has forced them to downgrade earnings, WOW now guiding to Australian Food EBIT of $1.48-1.53bn, a ~7% miss to consensus at the mid-point. A rise in online sales has also had an impact on margins, a trend that Goldmans to their credit had highlighted in their recent note on Metcash when they deviated from consensus, the sort of independent thinking that we applaud, even though we were on the wrong side of it. As a good colleague who has been in the markets for 40+ years often says, analysts make sheep look like independent thinkers!

• A soft update and the shares rightly fell.

MM remains neutral WOW ~$31

 

[divs4ever]

Back to screwing suppliers again then.

YEP ! a handy thing to remember when buying small cap. stocks that may sell to WOW

 

[divs4ever]

well they reduced human interaction at check-outs

so some customers helped themselves to 'five-finger discounts ' more often , i could see that trend the last time i visited a store in December 2023

the result costs down ( maybe ) and 'shrinkage' UP
interesting to see Brad the Wonder-boy was replaced

a bit of a feature at WOW

 

[TimeISmoney]

well they reduced human interaction at check-outs

so some customers helped themselves to 'five-finger discounts ' more often , i could see that trend the last time i visited a store in December 2023

the result costs down ( maybe ) and 'shrinkage' UP
interesting to see Brad the Wonder-boy was replaced

a bit of a feature at WOW

You have one person watching on average 10 self serve counters, it's a no brainer that some will take things without paying. The self serve counters here actually have a camera on them but even then the amount of times that machines have trouble and you need assistance, nobody is around to help you because they're attending to someone else.

 

[Value Hunter]

You have one person watching on average 10 self serve counters, it's a no brainer that some will take things without paying. The self serve counters here actually have a camera on them but even then the amount of times that machines have trouble and you need assistance, nobody is around to help you because they're attending to someone else.

Indeed the false economies of cost cutting. If you want to cut costs get rid of head office staff and management employees don't cut down on front line staff who do the critical work.

 

[Timestar]

Can someone pls verify the debt for Woolworths Ltd ($16.7 bn) is corrrect. A colleague mentioned it this week and I thought he ws joking but it appears to be somewhat true. The interest omn the will hit their bottom line big time and the new CEO had better come up with a plan to tackle this asap.

Also The NDIS is projected to cost the taxpayer $46bn in 2025-26, again these numbers are insanely unacceptable and in desperate need of review.

 

[Sean K]

Can someone pls verify the debt for Woolworths Ltd ($16.7 bn) is corrrect. A colleague mentioned it this week and I thought he ws joking but it appears to be somewhat true. The interest omn the will hit their bottom line big time and the new CEO had better come up with a plan to tackle this asap.

Also The NDIS is projected to cost the taxpayer $46bn in 2025-26, again these numbers are insanely unacceptable and in desperate need of review.

About $15b.

 

[Timestar]

Thanks Sean, I think I double counted something. That said, it's still very high with short-term debt of ~$3.6bn, would love to know the new CEO's plan to deal with that consider $13bn is due in total and only ~$2bn cash on hand.

Cheers, T.

 

[Sean K]

Thanks Sean, I think I double counted something. That said, it's still very high with short-term debt of ~$3.6bn, would love to know the new CEO's plan to deal with that consider $13bn is due in total and only ~$2bn cash on hand.

Cheers, T.

I suppose debt and profits are all relative to the overall size of the company and its EV, assets, cashflow, business type, etc. Having $15b in debt for a $35b company does looks pretty steep on the surface of it. Maybe high debt is OK because people need to eat and aren't going to stop going to shop there. Coles is worth $23b and has $10b debt. So, not too different. Maybe that's how grocery companies operate?

 

[Garpal Gumnut]

I suppose debt and profits are all relative to the overall size of the company and its EV, assets, cashflow, business type, etc. Having $15b in debt for a $35b company does looks pretty steep on the surface of it. Maybe high debt is OK because people need to eat and aren't going to stop going to shop there. Coles is worth $23b and has $10b debt. So, not too different. Maybe that's how grocery companies operate?

Cashflow would be so large, as well as the debt, having a good CFO would be essential.

gg

 

[Garpal Gumnut]

There have only been four monthly falls of a similar magnitude in the last three years on such high volume ( over 20m shares traded ). On three out of four occasions the price kept on falling. It may be a buy closer to $26-$27. We are only 1 trading day in to this month.

gg

 

[Value Hunter]

Can someone pls verify the debt for Woolworths Ltd ($16.7 bn) is corrrect. A colleague mentioned it this week and I thought he ws joking but it appears to be somewhat true. The interest omn the will hit their bottom line big time and the new CEO had better come up with a plan to tackle this asap.

Also The NDIS is projected to cost the taxpayer $46bn in 2025-26, again these numbers are insanely unacceptable and in desperate need of review.

It is very normal for large supermarkets Coles, Woolworths, Costco, Aldi, Tesco, etc to have a lot of debt. This is because supermarkets earn a high return on equity and have very stable revenues and cash flows and hence they can should a high debt load.

 

[frugal.rock]

Is it just my thinking or is there a heck of a lot of strikes under these labour governments?

'It's actually unprecedented': Hundreds of Woolworths warehouse staff strike indefinitely

Hundreds of Woolworths staff have walked off the job indefinitely at distribution centres in Victoria and New South Wales, demanding better pay and working conditions.

www.abc.net.au

 

[divs4ever]

Is it just my thinking or is there a heck of a lot of strikes under these labour governments?

'It's actually unprecedented': Hundreds of Woolworths warehouse staff strike indefinitely

Hundreds of Woolworths staff have walked off the job indefinitely at distribution centres in Victoria and New South Wales, demanding better pay and working conditions.

www.abc.net.au

fairly usual from memory ( remember the unions give the ALP a LOT OF SUPPORT not just money , help at elections , gossip to attack opponents etc etc )

now at WOW WAREHOUSES ( my second official job ) we went on strike AGAINST the union for selling us out on reduced conditions and not telling us about it .. took about a year to kick that union out of the whole state ( despite management flying in interstate union officials to try and calm us down )

i would have to hear the FULL story not just from the Commo outlet , but nah , smells coordinated ( the replacement union turned out to be milk-sops as well .

if the strike is by the WORKERS( not the union gaslighting folks) it could be brutal

i hold WOW 'free-carried'

 

[frugal.rock]

A.6 DRP Price (including any discount):
AUD 34.83000 (no discount)

Closed at $29.88 today... ~14% discount?

 

[divs4ever]

thanks for reminding me , i should opt out of the WOW DRP

i don't like my chances of the corporate culture changing there , it may as well just sit in 'the bottom drawer ' , throwing some cash and franking credits , let the WES holding grow via the DRP ( and other potential top-ups )

 

[mullokintyre]

Wow has failed me miserably this year.
Took it as a defensive position in the full year comp, and ended up as defensive as a bowl of custard at a bikie party.
It may have reached its lowest point and started to regain upward momentum (of course this may be just wishful thinking!)
Mick

 

[JohnDe]

Wow has failed me miserably this year.
Took it as a defensive position in the full year comp, and ended up as defensive as a bowl of custard at a bikie party.
It may have reached its lowest point and started to regain upward momentum (of course this may be just wishful thinking!)
Mick

Depending on how the Woolworths and Coles enquiry goes, WOW may have already hit its low point.

We will soon see.

 

[sptrawler]

Depending on how the Woolworths and Coles enquiry goes, WOW may have already hit its low point.

We will soon see.

Or Aldi and Costco eat away?

 

[JonnyBubbleWrap]

YEP ! a handy thing to remember when buying small cap. stocks that may sell to WOW

newsRush.ai

newsrush.ai

WOW
WOOLWORTHS GROUP LIMITED​

Notification regarding unquoted securities - WOW Share​

Announcement Type: Equity Incentive Plan Update​

---

18 November 2024 3:58 PM. Open PDF | 7 Pages

Woolworths Group Limited issued 3,505,770 performance rights and 1,254,435 share rights on November 15, 2024, under employee incentive schemes, as detailed in their Appendix 3G notification.

Summary​

• Woolworths Group Limited (WOW) issued 3,505,770 performance rights (WOWAK) and 1,254,435 share rights (WOWAA) on November 15, 2024.
• These securities were issued under employee incentive schemes and are not yet quoted on the ASX due to transfer restrictions.
• Key management personnel (KMP) received some of these securities: Amanda Bardwell received 99,182 performance rights and 8,349 share rights, while Stephen Harrison received 50,807 performance rights and 8,432 share rights.
• The total number of performance rights on issue after this issuance is 9,577,180, and the total number of share rights on issue is 2,455,403.
• The issuance was made under an exception in Listing Rule 7.2, so shareholder approval wasn't required under Listing Rule 7.1.
• Details of the employee incentive schemes are available in the 2024 Notice of Meeting and the Woolworths Group Limited Equity Incentive Plan Rules.

Sentiment​

Score: 5
Explanation: The announcement is neutral. While the issuance of securities is positive for employee morale and retention, the lack of immediate liquidity for the unquoted securities and the potential for future dilution present some negative aspects.

Highlights​

• 3,505,770 performance rights (WOWAK) and 1,254,435 share rights (WOWAA) were issued on November 15, 2024.
• These securities are not yet quoted on the ASX.
• Key management personnel (KMP) received a portion of the issued securities.
• Amanda Bardwell received 99,182 performance rights and 8,349 share rights.
• Stephen Harrison received 50,807 performance rights and 8,432 share rights.
• The issuance was approved under Listing Rule 7.2, exempting it from shareholder approval under Listing Rule 7.1.
• Post-issuance, there are 9,577,180 performance rights and 2,455,403 share rights outstanding.

Positives​

• The issuance of performance rights and share rights incentivizes employees.
• The issuance was completed efficiently under an existing exception in Listing Rule 7.2, avoiding the need for shareholder approval.

Negatives​

• The securities are not yet quoted on the ASX, limiting immediate liquidity for recipients.
• The details of the employee incentive schemes are spread across multiple documents.

Risks​

• Potential future dilution of existing shareholders' equity if further similar issuances occur.
• The restrictions on transfer of the securities could impact the value perceived by recipients.

Future Outlook​

No specific forward-looking statements or guidance are provided in this document beyond the details of the securities issuance.

Industry Context​

This announcement is typical of many companies using employee incentive schemes to attract and retain talent. The specifics of the scheme, including the number of securities issued and the allocation to key management personnel, are relevant for assessing the company's compensation strategy and potential future dilution.

Next Steps​

• The issued securities will become quoted on the ASX once the transfer restrictions are lifted.

Key Dates​

• 31/10/2024: Date of meeting or proposed meeting to approve the issue under listing rule 7.1
• 15/11/2024: Date the performance rights and share rights were issued
• 18/11/2024: Date of this announcement