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The appointment of Ted van Arkel to the board of The Warehouse Group could again open the way for Australian supermarket giant Woolworths to make a takeover bid for the Red Sheds.
Van Arkel declined to comment on that question when it was posed to him yesterday.
Both Woolworths and Foodstuffs New Zealand each hold just below 10 per cent of The Warehouse but a High Court decision that cleared the way for Foodstuffs and Woolworths to acquire The Warehouse was overturned by the Court of Appeal in 2008.
To get control of The Warehouse, a takeover bid would require founder Sir Stephen Tindall to sell his interests which make up 52 per cent of the company.
The Warehouse cancelled the roll-out of the "Extra" concept stores which sold fresh produce, frozen foods and meat which was thought to have removed a major barrier for any potential deal with a grocery chain.
There had been concerns that a takeover would further reduce grocery sector competition in the highly-concentrated New Zealand market.
Van Arkel has a formidable reputation both as a former managing director of Progressive Enterprises, owned by Woolworths, and as an independent director of several boards, including being chairman of Restaurant Brands and Charlie's Group.
He said he had known Sir Stephen and chairman Graham Evans for a long time.
Van Arkel had worked with Sir Stephen, through George Court, and Evans through Woolworths.
Van Arkel becomes a director of The Warehouse on July 1 but said he had been talking to company officials for three months about the appointment.
Craigs Investment Partners broker Chris Timms said van Arkel's appointment could pave the way for Woolworths to negotiate a takeover bid for The Warehouse.
"The board will be looking for someone who is reasonably forward thinking. The Warehouse is quite a mature company and will need some fresh thinking.
"Mr van Arkel's approach with Charlie's has been successful and he has made good progress with Restaurant Brands.
"Maybe we are reading too much into this, but the links are hard to ignore," he said.
The directors of The Warehouse Group Limited advise that total sales for The Warehouse for the quarter ended 29 January 2012, were up 4.2% on the same period last year, with same store sales up 3.1%.
Group Chief Executive Officer, Mark Powell, commented “trading conditions were quite challenging in the lead up to Christmas, but retail sales eventually proved buoyant through the key late December period and in January. I am pleased with overall sales growth, but market conditions have resulted in pressure being brought to bear on margins in some areas. This has been particularly evident in the Apparel category, which in the first half has offset positive underlying growth in a number of other key categories.”
Warehouse Stationery sales were up 2.5% for the January quarter, with same stores sales up 4.4%. Mr Powell said, “Warehouse Stationery’s sales performance was encouraging given today’s market conditions and especially in light of the timing of ”Back to School” which has resulted in some sales being pushed into the February trading month when compared to last year.”
In light of margin pressures experienced in recent months the Board expects adjusted group net profit after tax for the year ending 27 July 2012 to be in the range of $62.0 million to $66.0 million compared to previous guidance of $70.0 million. The Board expects reported group net profit after tax for the year to be in the order of $80.0 million in line with previous guidance. This remains subject to any significant change in trading conditions during the second half.
The Warehouse Group Limited half year results will be announced on Friday, 9 March 2012.
Contact details regarding this announcement:
Media Mark Powell, Group CEO to be contacted via Wendy Irving on +64 9 488 3231
Investors and Analysts Luke Bunt Chief Financial Officer Telephone: +64 21 644 882
James Pascoe added another 3m shares over the last couple of days. The divide over buying now , the 2 long term holders of a largish amount of shares that bout at around 6 and then one at around 4. Vs Pascoe and him buying at a low 3 and 2s couldn't be more apparent. Wonder what he's doing though?
With the group due to report on the 18th Sept not much is happening with the share price. Except its testing all time lows. Could be due an uptick should something good happen. My ex wife still shops there.
They look like there getting more people in. No where near the number they had in the 1990s but "more" . I say more but I mean they seem to have found the right number, they have matched the number of people to what they have... whether that means more profit is another thing. They have got the wrong business model. 1990 is gone, you just can't sell crap to people and bring it back again when it breaks. I'm sick of it and heaps of other kiwis have got sick of it and gone elsewhere. Or indeed branches of shops have sprung up all around New Zealand selling what The Warehouse used to sell. Even in the same building as the WHS used to be in in Hastings.
We want more, are entitled to more and increasingly going elsewhere when we don't get it.
It should be noted that the WHS has cover bought from now,12 months into the future. It starts at .63c. I think is too high and they will get beaten about a tad when our dollar loses value. They have never been good at that. Perhaps they better have a word with Fisher And Paykel Health.