Metcash – MTS

Forecast:hold 45%, buy 0%, sell 55%

buy after relist on Friday, sell after 16 Sep. spp complete ..

  • ?$1.85-2.6?
  • Who is Ian Morrice? Why should I have confidence for him to turn the business around(55%)? Am I sure the business is going well in the next 10 year(40%)?
  • Ordinary shares: 928,357,876 (before 888,338,048); Performance Rights (MTSAK): 2,940,325; option: 12M; Exercise price 426.7
  • Top holders
    http://www.metcashinvestors.com/phoenix.zhtml?c=167698&p=irol-ownershipsummary

 

  • 28/11/2016 H1 FY 2017
    • strong operating cash flows in the half of $130.6m(1H16:$3.1m)
    • the $92.8 m of equity raised to fund the HTH acquisition, resulted in net debt reducing to $197.6 m (FY16: $275.5m)
    • Reported EPS 8c
  •  14/11/2016 dimension 5%
  • 7/11/2016 dimension cease
  • 28/10/2016 dimensional, 5%
  • 4/10/2016 Ian Rognvald Morrice302,517Fully paid ordinary shares2,288,924Performance rights
  • 26/9/2016 shares 7,284,000 issued
  • 20/9/2016 $14.6 million which is less than the $20 million sought. Approximately 7.3 million fully paid ordinary shares ( SPP Shares) will be issued; on Tuesday, 27 September 2016
  • 8/9/2016 Ian Morrice, 297,517 Fully paid ordinary shares; 2,288,924 Performance Rights
  • 5/9/2016 share purchase program
    Price: $2 or lesser
  • 1/9/2016 Ceasing to be a substantial holder from MQG
  • 31/8/2016 ceasing JP Morgan
  • 30/8/2016 Becoming MQG, macquarie group 5.28%
  • 26/8/2016 Becoming JP Morgan
  • 25/8/2016 SUCCESSFUL COMPLETION OF INSTITUTIONAL PLACEMENT
    40m new shares traded on Tuesday,30 August 2016.
    shares 968,357,876; performance rights: 7,676,464
  • 24/8/2016 Woolworths selling its Home Timber & Hardware group to Metcash for $165 million.The purchase price equates to a multiple of ~7 times underlying EBITDA. its Mitre 10 Australia business would be combined with HTH to form a group with around 1800 stores and $2 billion in sales.Even after the deal, Metcash’s hardware sales will only be 20 per cent of those of Bunnings.
  • Metcash will raise $80 million via a placement (40m shares, $2 per share)  to institutions fully underwritten by Macquarie Capital and use $85 million in debt to fund the deal.
  • In addition, a non-underwritten share purchase plan (SPP) capped at $20m will be undertaken with proceeds used to reduce debt.SPP• A non underwritten SPP is available to eligible shareholders in Australia and New Zealand• Participation is limited to $10,000 per shareholder• The SPP will be capped at $20m in total. If the SPP is over subscribed it will be scaled back to the $20m capSPP Price• Shares under the SPP will be issued at a price equivalent to the lower of:• the Placement Price; and• a 2.5% discount to the 5 day VWAP of Metcash shares traded between Monday, 12 September 2016 and Friday, 16 September 2016
  • But the deal will see Metcash push back the recommencement of dividend payments from the end of the 2017 financial year until the 2018 financial year.Metcash “thinks there’s $20 million of working capital to come out of it – you can adjust the purchase price for that.”the deal would would boost earnings per share by 4 per cent in the first full year
  • 15/8/2016 JP Morgan, become, cease
  • 2/8/2016 Issue performance rights 2.718M; total share 928,357,876; Per rights, 7,676,464
  • 28/7/2016 JP Morgan, become, cease

    25/7/2016 Annual Report 2016

    image
    A focus on tight cash management and capital recycling resulted in a $392.3 million reduction in net debt during the year.

    On 31 July 2015, the Group sold its entire holding in Metcash Automotive Holdings Pty Ltd (‘MAH’ or ‘A utomotive’) to Bursons Group Limited (ASX:BAP) for a total sale consideration of $285.4 million. The transaction generated net cash flows of $242.1 million (before tax) to the Group. The proceeds were largely applied against the Group’s interest-bearing borrowings. The sale resulted in a net gain of $34.5 million after tax.

    Metcash generated a further $57.3 million from the disposal of surplus retail properties, interests in joint ventures and other retail assets

    Metcash’s insurance policy is expected to cover the hail event for material damage and consequential loss. Metcash recovered $57.0 million in cash from insurers and has recognised a receivable of $29 million at the end of the year.

    Segment results Segment results Segment results Segment results— Page 52 —

    image

    The Group has granted a financial guarantee contract relating to the bank loan of a joint venture, Adcome Pty Ltd. Under the contract, the bank has the right to require Metcash to repay the debt under certain prescribed circumstances of default.  The estimate of the maximum amount payable in respect of the guarantee, if exercised, is $47.5 million (2015: $47.5 million). Had the guarantee been exercised at 30 April 2016, the amount payable would have been $43.8 million (2015: $42.6 million). The fair value of the financial guarantee contract at the reporting date was $6.0 million (2015: $0.7 million) and is recognised as a financial liability.
    Depreciation and amortisation 61.7 71.8
    Impairment losses (non-significant items) 40.8 35.9

  • Substantial Shareholders
    Allan Gray 119m; Westpac 90m; BT inves 87m; national 60m; Lzard 51m
  • 25/7/2016 The 2016 Annual General Meeting will be held at Wesley Theatre, Wesley Conference Centre, 220 Pitt Street, Sydney, New South Wales 2000 on Wednesday, 31 August 2016 at 2.30pm

    If approved, Mr Morrice will be granted 687,500 Performance Rights. This number has been determined by dividing Mr Morrice’s LTI opportunity of $1,100,000 by $1.60; LTI opportunity is 61% of his Total Employment Cost (TEC) of $1,800,000; increasing his on-target short term incentive opportunity from 50% to 100% of TEC

    The award will be subject to two performance conditions that will be tested over a three year performance period running from 1 May 2016 to 30 April 2019. Half of the Performance Rights will be subject to a relative total shareholder return (TSR) hurdle. The remaining half of the Performance Rights will be subject to an earnings per share (EPS) hurdle.
    at the 2014 annual general meeting, Mr Morrice has received 2,882,563 Performance Rights at no cost. The Transformation Incentive component failed to meet the required ROFE hurdle during FY2016 and, accordingly, 1,281,139 of these rights lapsed
  • 21/7/2016 green light given for home timber bid
  • 1/7/2016 WBC 12.17%
  • 1/7/2016 BTT 11.79%
  • 25/6/2016 Analysts are trying to assess the potential damage to Metcash’s sales and earnings from iRexchange, a new digital marketplace for independent retailers, logistics company Linfox, which is eyeing expansion opportunities, and rival bidders for Woolworths’ Home Timber and Hardware business, who are aiming to poach customers from Mitre 10.
  • 24/6/2016 WBC (Westpac) 11.1%
  • 24/6/2016 BTT 9.45% to 10.72
  • 23/6/2016 cease JP Morgan
  • 20/6/2016 Annual Report

    • Group intends to recommence half yearly dividend payments with effect from the FY17 final dividend, subject to capital requirements
    • Morrice 1,800,000 + 1,725,000(STI)  – – –  $3,525,000
    • Murray 2016 322,496  18,697  —- $341,193 (fee)
    • Intangible assets and goodwill  1,127.5m
      TOTAL EQUITY TOTAL EQUITY TOTAL EQUITY TOTAL EQUITY   1,369.1m
    • Receipts from customers  14,864.6m  (14,945.9m in 2015)
      Proceeds from sale of discontinued operations        242.1m
      Repayments of borrowings, net  (449.5)m
      Depreciation and amortisation 61.7 71.8
      Impairment losses (non-significant items) 40.8 35.9
    • Weighted average number of ordinary shares used in calculating diluted EPS 928,942,771
  • 17/6/2016 Lazard 6.5% to 5.5%
  • 6/6/2016 appoint Julie Hutton, who replace Brad Soller, as company secretory. (Australian Institute of Company Directors)
  • 1/6/2016 Lazard 7.66 to 6.5%
  • 30/5/2016 JP Morgan becoming 5.02%
  • 27/5/2016 JP Morgan cease
  • 24/5/2016 Lazard asset 8.94% to 7.66%
  • 4/5/2016 329,893 (MTSAK performance rights cancelled); 928,357,876 Ordinary (MTS); 12,167,612
  • 27/4/2016 Lazard asset 7.92% to 8.94$
  • 27/4/2016 JP Morgan 6.39% to 5.39%
  • 11/4/2016 290,400 (MTSAK performance rights cancelled); 928,357,876 Ordinary (MTS);12,497,505 Performance Rights (MTSAK)
  • 8/4/2016 JP Morgan 5.1% to 6.39%
  • 4/4/2016 NAB 8.268 to 6.52%
  • 1/4/2016 BBT 8.39% to 9.45%
  • 1/4/2016 WBC 8.79 to 9.8%
  • 23/3/2016 NAB 9.47% to 8.268%
  • 18/3/2016 Macquarie Group “MQG” ceasing
  • 16/3/2016 UBS ceasing
  • 11/3/2016 UBS becoming 5.86%
  • 11/3/2016 UBS ceasing
  • 3/3/2016 NAB 10.997% to 9.47%
  • 3/3/2016 ceasing CBA
  • 2/3/2016; becoming CBA
  • 1/3/2016; ceasing CBA
  • 1/3/2016; UBS becoming 5.03%
  • 29/2/2016; CBA becoming; 5.26%
  • 29/2/2016; NAB from 12.06% to 10.997%
  • 29/2/2016; ceasing UBS
  • 26/2/2016; becoming UBS 5.02%
  • 25/22016; ceasing CBA
  • 25/2/2016; becoming CBA 5.01%
  • 23/2/2016; Initial Director’s interest 0
  • 23/2/2016; appointment Murray Jordan; non-executive director
  • 23/2/2016 ceasing CBA
  • 23/2/16; ceasing JCP investment was 6.1%
  • 23/2/16; becoming JP Morgan 5.1%
  • 22/2/2016;becoming CBA 5.31%
  • 19/2/2016; ceasing; CBA
  • 19/2/2016; ceasing; Dimensional Entities; was 5%
  • 18/2/2016; becoming CBA 5.3%
  • 17/2/2016; ceasing; UBS
  • 16/2/2016; Becoming a; UBS 47M; 5.07%
  • 08/02/20164:58 PM  Ceasing to be a substantial holder from CBA; sale price $1.6-1.8
  • 03/02/2016; 1,467,009 (MTSAK performance rights cancelled)
    Ordinary; 928,357,876
    MTSAK performance rights: 12,787,905
  • 27/1/2016 Lazard asset; present 73,536,469 (7.92%); previous 83,963,708(9.04%)
    sell at 1.55-1.74
  • 22/1/2016 Resignation of company secretary
  • 19/1/2016 Ceasing to be a substantial holder-J.P.Morgan
  • 15/01/2016 Becoming a substantial holder-J.P.Morgan (5.05%)
  • 14/1 ceasing to be; UBS Group
  • 14/1 Becoming a … UBS; 46.42M (5%)
  • 13/1 becoming to be … CBA 5.03%
  • 12/1 ceasing to be …J. P. Morgan
  • 12/1 ceasing CBA
  • 11/1 becoming CBA
  • 7/1 Becoming MQG;
  • 6/1 ceasing UBS
  • 5/1 becoming UBS 5.02%
  • 4/1 increasing holding BT investment; 8.4%
  • 4/1 ceasing CBA
  • 31/12/15 BT investment; holding increase from 7.4% to 8.39%
  • 30/12 WBC increase holding from 7.78% to 8.79%
  • 23/12 NAB  increase holding from 11.016% to 12.06%
  • 18/12 J.P. Morgan becoming 5.04%
  • 18.12 UBS ceasing
  • 16/12 UBS becoming
  • 15/12 J.P.Morgan ceasing
  • 14/12 UBS ceasing
  • 11/12 SAS Trustee ceasing
  • 11/12 Director – Helen Elizabeth Craig Nash;  Nash Family Superannuation Fund bought 32,431 shares by $49,943.74; at $1.54 per Share
  • 11/12 J.P.Morgan becoming
  • 11/12 UBS becoming
  •  10/12 Lazzard Asset reduced holding from 10.53% to 9.04%
  • 9/12 NAB increase holding from 9.703% to 11.016%
  • 30/11/15 Half year (2016) presentation- 30 Nov. 2015
    image
  • 30/11/15 H1 2016 financial report
    Sales revenue up 1.4% to $6.6b
    Reported Profit after Tax up 20.0% to $122.0m
    Underlying EBIT declined 12.7% to $133.7m
    Net debt reduced 34.8% to $435.3m
    Reported Profit after Tax (including discontinued operations) was up 20.0% to $122.0m (1H2015: $101.7m).
    On 31 July 2015, the Group sold the entire issued share capital of Metcash Automotive Holdings Pty Ltd to Bursons Group Limited (ASX:BAP) for a total sale consideration of $283 million. The transaction generated net cash flows of $240 million to the Group after distribution of proceeds to non-controlling interests. The proceeds were largely applied against the Group’s interest-bearing borrowings.
    The sale transaction resulted in a net gain of $31.4 million after tax. During the half year, the Automotive pillar contributed $64.5 million of sales revenue (2014: $130.1 milion) and $3.7 million of net profit after tax (2014: $9.2 million) to the Group.

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  • 4 Jun 2015
    Metcash shares plunge as wholesaler withholds dividends after $640m write-downhttp://www.afr.com/business/metcash-shares-plunge-as-wholesaler-withholds-dividends-after-640m-writedown-20150604-ghgbfk
    underlying earnings before interest and tax, which are due to be released on June 15, will be within the company’s previous guidance of $315 million to $330 million – at least 28 per cent lower than 2014.Metcash is one of the most shorted stocks on the ASX, with about 17 per cent of shares short sold.
  • 5 May 2015

    Autobarn for ASX: Metcash eyes $350m automotive parts float

    http://www.smh.com.au/business/retail/metcash-purrs-on-auto-parts-float-hopes-20150515-gh2kyg.html

    24 Dec 2014

    Devidend Reinvestment Plan, $1.75 per share; 25m shares will be on market on 9th Jan 2015

    5-5-2014 ATO SETTLEMENT

    Metcash will receive a partial refund of the $24.4m tax paid in June/July 2011. The income tax expense of $10.8m arising from the settlement will be treated as a non-recurring significant item in the Company’s FY14 financial statements.

    30-4-2014 Becoming a substantial holder

    Maple-brown abbott limited; 44,568,515; 5.02%

    3/4/2014 change in substantial holding

    Allan Gray Australia; from 45,390,736; 5.11% to 55,970,784; 6.3%; at about $2.65 per share

    26-3-2014 Becoming a substantial holder

    Lazard Asset Management Pacific 45,097,817; 5.08%

    25-3-2014 Becoming a substantial holder

    Allan Gray Australia; 45,390,736; 5.11%

    21-3-2014 Transformation Plan

    Metcash is driving the transformation of MFG with significant investment over the next three years. Total capex is estimated to peak at between $150m and $180m in 2015, reducing to $130m-$150m in 2016 and 2017. The costs of the transformation plan are as follows:

    • MFG transformation: $100m-$125m predominantly to fund store refurbishments, new stores and store buybacks
    • Supply Chain: $160m-$180m–DC Automation;
    • Digital: $15m-$20m;
    • Other discretionary capex: $85-$130m – allocated for bolt on opportunities and network growth.

    In order to fund the initiatives in the transformation plan Metcash will target further working capital improvements of $30-$40m over FY15 and FY16; reduce the Dividend Payout Ratio to 60% commencing from final FY14 dividend;

    Dividend

    2005-2013, 9 yrs, $1.91 per share, averagely $0.21 per year. Dividend is expected to cut in half in 2014, according to the new strategy applied by the new CEO Ian Morrice.

    20-3-2014 FY14 Guidance Update

    Management now expects a decline in underlying EPS in the range of 13 – 15% (which includes approximately 3% of equity issuance dilution) for FY14.

    20-1-14 Dividend Reinvestment Plan

    • priced at $3.06 per share; based on an Average Market Price (as defined in the DRP Rules) for the ten trading days from Monday, 6 January 2014 to Friday, 17 January 2014 inclusive, less a 1% discount.
    • Under the DRP, 7,633,262 shares (in aggregate) will be allocated to participating shareholders on Friday, 24 January 2014.

    27-12-13 Change in substantial holding

    Blackrock; 46,960,476; 5.33%; 65,398,730; 7.42%

    19-12-2013 Change of Directors Interest Notice

    MICHAEL PETER McMAHON 30,000; $97,125.01; @$3.2375 trade on market

    16-12-2013 Metcash appoints Peter Struck as CEO Convenience

    within Metcash Food & Grocery. He has previously held senior roles in Woolworths, BP and Coles. commence with Metcash on 1 February 2014.

    “To provide a greater turnaround platform for our Supermarkets business and optimise the growth opportunities identified in the Convenience channel, we have decided that the Metcash Food & Grocery pillar will be run in two divisions, each led by a separate CEO,” Mr Morrice said.

    2-12-2013 Half Yearly Report ending 31 October 2013

    • Ian Morrice, appointed Group CEO of Metcash Limited on 1 July 2013
    • Interim dividend of 9.5 cps being a payout ratio of 70%