Author Topic: RHDGF - Retail Holdings  (Read 15409 times)

writser

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Re: RHDGF - Retail Holdings
« Reply #30 on: January 20, 2016, 01:05:48 PM »
A small update on this name.

Late in december Retail Holdings announced that it intended to make a large distribution to shareholders (link). I managed to pick up a few additional shares in januari below $16. A couple of days ago the company announced a $5 / share return of capital. Shares surprisingly spiked on this news, even though the company stated its intentions a month ago. The market in this name is not always very efficient.

Today the company announced that it liquidated its Singer Pakistan stake (link). At a loss, but it was a negligible part of  the company anyway and it wasn't making money. Glad they got rid of it.

You can buy RHDGF now for $18, get $5 back in a few months so effectively you are paying $13. For that you get ~$25 in assets. The company has a history of returning capital to shareholders, is the controlling shareholder of its subsidiaries and has made good progress the past few months with regards to liquidating the company. I like what is happening here; this is now my largest position.

For a more detailed writeup see this article written by a fellow forum member: link.
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writser

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Re: RHDGF - Retail Holdings
« Reply #31 on: March 31, 2016, 11:36:15 AM »
Another small update. A couple of days ago Retail Holdings released their annual report. They've done quite a bit the past 12 months:

- sold their stake in Singer Thailand.
- sold a 2.2% stake of Singer Bangladesh.
- sold all their small Sri Lanka subs.
- sold Singer Pakistan.
- sold a 6.4% stake in Singer Sri Lanka.
- wrote off their SVP notes (not all news was good).

Revenue at the remaining subs increased 15% year-on-year (20% at constant exchange rates). Excluding the SVP write-off, earnings before taxes were up 20%. Sewko now has ~$73m in cash which means that even after the $5 per share distribution next month they have over $2 per share left to distribute. They already announced they want to do another distribution in 2016.

So for $19.70 per share you buy

- $7.40 in cash, of which $6 will probably be distributed this year.
- $21 in controlling stakes in growing, reasonably priced emerging market companies.
- a free option at recovering up to $5 from the SVP notes.

Total package value: ~$30. The company has a history of paying out a juicy dividend, is debt-free at the holding level and has shown during the past few months that they are serious about liquidating.  Stock is now up ~22% for the year and 10% since my last post. I sold a little bit but it still looks atttractive and is one of my largest positions.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

writser

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Re: RHDGF - Retail Holdings
« Reply #32 on: January 03, 2017, 07:03:34 AM »
Chris DeMuth wrote this up as 'top pick of 2017': http://seekingalpha.com/article/4033347-can-profit-massive-discount-top-pick-2017 . Good read. I trimmed my position a little bit in the subsequent 25% uptick but it remains attractive and is one of my larger positions.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

brendanb22

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Re: RHDGF - Retail Holdings
« Reply #33 on: January 04, 2017, 05:26:10 PM »

Hielko

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Re: RHDGF - Retail Holdings
« Reply #34 on: January 04, 2017, 11:39:00 PM »
I think the strategy update didn't contain any news, but good to see that the 2 to 4 year time-frame is reconfirmed.

But what was new and very positive: they bought back 542,782 shares in 2016! I estimate that this increases NAV/share by 5.4%: https://alphavulture.com/2017/01/05/retail-holdings-update/ :)
« Last Edit: January 05, 2017, 01:55:00 AM by Hielko »

writser

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Re: RHDGF - Retail Holdings
« Reply #35 on: March 29, 2017, 08:55:46 AM »
2016 results: http://www.retailholdings.com/pressReleases/pressReleasesFile_151.pdf .

Quote
I am optimistic about the prospects for 2017, in terms of both financial performance - - the individual operations are all off to a very good start - - and likely further progress in our strategic divestment program. Public market sales of additional shares are either already underway or planned in Bangladesh, India and Sri Lanka; the initial results from this effort should be disclosed in the next several weeks. Additional asset sales are planned for later in the year.

The Company intends to pay an initial distribution of $2.00 per Share in the spring, with a further distribution anticipated later in 2017, to be determined, in large part, by the amount of proceeds from this year’s divestments.

Looking good. I bought a little extra on the open. Another forum member wrote a small blogpost about it: https://alphavulture.com/2017/03/29/retail-holdings-making-progress-with-liquidating/
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

writser

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Re: RHDGF - Retail Holdings
« Reply #36 on: April 10, 2017, 02:08:33 PM »
Todays update: http://www.prnewswire.com/news-releases/retail-holdings-announces-placement-of-additional-shares-of-public-operating-subsidiaries-300437170.html . They sold ~$19m worth of stock. Looks like the liquidation is going along smoothly. Discount to NAV still around 25%.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.

_JJ_

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Re: RHDGF - Retail Holdings
« Reply #37 on: September 12, 2017, 08:50:28 AM »
Singer Sri Lanka up 19% on take-over rumours.

http://www.economynext.com/Singer_(Sri_Lanka)_stock_soars_on_take_over_speculation-3-8697-3.html

My guess the most likely acquirer would be Softlogic. They have been aggressive acquirers in different sectors in Sri Lanka. According to this article Softlogic had a 13% market share in durable consumer goods in 2016:

https://seekingalpha.com/article/4085917-retail-holdings-shares-strong-buy-patient-long-term-investors-trading-36-percent-discount (Exhibit 3)

Also, Singer has a finance arm that could be integrated in Softlogic's financial subsidiary.

Singer Sri Lanka was at 36% market share in durable consumer goods and Abans at 34%. An acquisition by Abans probably wouldn't be allowed by the competition commission.
« Last Edit: September 12, 2017, 08:53:03 AM by _JJ_ »

writser

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Re: RHDGF - Retail Holdings
« Reply #38 on: September 13, 2017, 07:27:25 AM »
It's now official: link. Retail holdings is selling 60% of their Singer Sri Lanka stake for LKR 47 / share for ~$69m in net proceeds. Not sure why they are not selling their whole position but the buyer has to make a mandatory takeover bid anyway so if they want to close out their position they should be able to do so. Thanks to your post I was able to buy some extra RHDGF yesterday. Still one of my largest positions, now significantly derisked with pro-forma ~$10 / share in cash that will be distributed tax-free (for me at least) and ~$19 / share in subsidiary shares, mostly Singer Bangladesh. Barring some details (CEO compensation package, possible difficulties with selling Bangladesh shares) the stub should still be worth way more than the $10.50 implied by the market.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.