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Great GW Share Buyup
Those for buying shares 53%  53%  [ 9 ]
Those against 47%  47%  [ 8 ]
Total votes : 17

Great GW Share Buyup
Bombot
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 12:13 am 
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(Heresiarch @ Jul. 26 2006,00:04)
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Maybe in the first half they had a large set of capital expenditures... which in fact according to their report they did... or they paid the principle off on one of their revolving lines of credit.

Just because their operating profit "increased" in the second half doesn't in the slightest mean that they sold more than they did in the first half.

Those affect the balance sheet, not the income statement.  OK, depreciation and interest knock on to affect profit but changes in those figures do not solely account for the upturn in profit.

And of course the operating profit line doesn?t indicate they sold more, but the revenue line does!

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Heresiarch
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 12:22 am 
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(Bombot @ Jul. 25 2006,17:13)
QUOTE
And of course the operating profit line doesn?t indicate they sold more, but the revenue line does!

Revenue
2005 - ?136.6m
2006 - ?115.2m

Operating profit
2005 -   ?14.3m
2006 - ?4.2m

Pre-tax profit
2005 - ?13.9m
2006 - ?3.7m

Earnings per share
2005 - 29.4p
2006 - 6.5p

Year end net (borrowings)/funds  
2005 - ?3.4m
2006-   ?(2.2m)

Sorry... in no way shape or form does a 60% drop in profits on a 20% drop in sales constitute a "healthy" company.

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Bombot
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 12:25 am 
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Again, you?re looking at year on year results.  I?m talking about the six months just gone versus the six months prior to that.

The two trends are very different.

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dafrca
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 12:33 am 
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This whole subject is too funny. GW is not doing well in most of the Ratios. This is a no-Brainer for me. But please invest your money in any way you wish.

dafrca

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Bombot
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 12:40 am 
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Well I'll just let these guys mediate:

"Bridgewell Securities retained its 'neutral' stance, arguing the results contain ammunition for both bulls and bears.

[There's] "no definitive evidence of the turn yet encouraging year-on-year improvements in many parts of the business, continued question marks over visibility yet a robust maintenance of the dividend," it said."

From http://www.iii.co.uk/news....article

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Heresiarch
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 12:41 am 
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(Bombot @ Jul. 25 2006,17:25)
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Again, you?re looking at year on year results.  I?m talking about the six months just gone versus the six months prior to that.

The two trends are very different.

Oddly enough I tend to base my investments on long term trends rather than short term gain.

And since GW doesn't actually post monthly sales volumes merely bi-annual profits I don't see how anyone can extrapolate a "trend" like your doing out of them without actually looking at why those profits were the way they were in the first half of the year.

Once again... the reason the profits jumped so much is GW had large captial expenditures in the first half of the year including paying off their Nottingham expansion.

They didn't magically "do better" in the second half than they did in the first instead... just like in the first half... they were down from the previous year.

Once again GW's liabilities are up, their sales are down and their profits have dumped themselves in the toilet over previous years... sure, they may be leaner and meaner but until GW does some restructuring that they appear blissfully unaware they even need to do they will continue to crater.

The assertion by them in their investor section that they expect to return to the linear growth of a few years ago is so absurd it's genuinely funny.

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Chroma
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 12:46 am 
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It said sales and profits fell for two main reasons -- firstly, the continuing decline in sales following an exceptional trading period, and secondly, the continued reduction in sales to independent toy and hobby retailers, notably in the US, where many smaller independent operators are ceasing to trade.


I think this is the starting of the death knell for GW... for once in their existence, there's actually competition growing and they don't seem to know how to handle it.

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Bombot
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 12:54 am 
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(Heresiarch @ Jul. 26 2006,00:41)
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Once again... the reason the profits jumped so much is GW had large captial expenditures in the first half of the year including paying off their Nottingham expansion.

Why does a large capital expenditure in the first half of the year kill profits for that half?

Cash goes down; assets go up.  There's no effect on profit.

Sure depreciation goes up, but that hits the second half too.  In fact it hits the second half more unless the capital expenditure occurred right at the beginning of the financial year.

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Heresiarch
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 1:09 am 
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(Bombot @ Jul. 25 2006,17:54)
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Why does a large capital expenditure in the first half of the year kill profits for that half?

Cash goes down; assets go up.  There's no effect on profit.

Assets go up? No effect on profit?

Investments in capital assets have no bearing on profit. Either operating profit, gross profit or net profit.

None aside from subtracting from it that is.

Profit is defined as "the sales of the firm less costs like as wages, rent, fuel, raw materials, interest on loans and depreciation."

If you put money into captial expenditures it increases the value of your assets... well depending on the expenditure in question anyways... it does *not* count as profit rather  it subtracts from profit.

Period. Full stop.

Unless of course your an economics major... you aren't an economics major are you?

That would in fact explain why your not following this as their definitions are ass-backwards from reality and what accountants define as profit... which is exactly the subject at hand. Accounting definitions of profit not macro-economic definitions of profit.

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Bombot
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 1:20 am 
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I?m an accountant.  We are talking about the accounting profit.

Capital expenditure does not impact on profit except by way of depreciation.

If I incur ?9m capital expenditure in the first half of the year (ok, let?s say right at the beginning of that period),  and I depreciate the assets I?ve bought over 3 years, then I increase costs in the first half by ?1.5m.

That expenditure also increases costs in the second half the year by ?1.5m.  So if profit has increased in the second half of the year compared to the first, that capital expenditure is not the reason why.

I?m not sure how else to explain my point.

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dafrca
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 4:42 am 
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Bombot,

I think you have gone off topic. What you put forward was the idea of buying shares to influence the company and the choices they make. That is a power play. In that case the short term profits are not important. It is the long term you should care about. It is the belief that the choices you influence will, in the long term, help your needs be met. And in some cases also help make the company more profitable.

The fact that you think one ratio is more important or another is a moot point. Because this is not about the short term value. It is not about the short term ROI. Your arguments should center on the viability of gaining enough votes through buying stocks or gaining proxy votes from others. You should be selling your long term vision regardless of the present numbers and ratios.

I am not trying to attack you, just point out that you are side tracking your overall project with this short term outlook.

Just an opinion.

dafrca

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CAL001
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 8:21 am 
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Wow, did this get out of hand. I thought I had finished economics years ago. Thanks for the lesson gents, I never envisaged gamers having financial backgrounds and adding such depth to a topic. And how would you sum up, with regard to a solution. Buying shares is based on making profit for ones self, so buying to control votes is not an option to meet our needs. So should we invest through the front door, by purchasing products and continue to wait for a solution to come from GW/SG. Give us your thoughts, this one has me very interested.

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Bombot
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 9:01 am 
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(dafrca @ Jul. 26 2006,04:42)
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Bombot,

I think you have gone off topic. What you put forward was the idea of buying shares to influence the company and the choices they make. That is a power play. In that case the short term profits are not important. It is the long term you should care about. It is the belief that the choices you influence will, in the long term, help your needs be met. And in some cases also help make the company more profitable.

I know the thread has deviated from the original point.  It was CAL001?s though so sorry to him.

My point was that, in my opinion, the last six months show signs of a turnaround, which sits at odds with opinions based on viewing the full year?s results as one.  Heresiarch disagreed with my opinion; I backed it up.  I was trying to steer clear of an accounting lesson but hey I?m stubborn and I was defending my point.

As for the original point, I think buying shares with the aim of gaining influence is unrealistic.  It will surely cost too much.  I?d only buy shares if you thought the investment was reasonable.  I?d be willing to buy some shares.  If nothing else you get to fire off a question at the AGM.  I was actually seriously considering doing it for that very reason and I may have actually made a gain if I?d done so.  But I didn?t.

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nealhunt
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 1:21 pm 
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If GW were a US company I would likely buy a couple shares so as to get an invitation to the annual shareholder's meeting.  Plus, (in the US at least) a lot of companies send out special deals to their shareholders.*


*Bit of trivia - Wrigley's sent out sticks of gum in their annual reports and invitation to the shareholders' meeting for decades.  Their board decided to cut it out to save costs and there was massive outcry from the shareholders.  Almost the entire board was voted out at the next meeting.

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dafrca
 Post subject: Great GW Share Buyup
PostPosted: Wed Jul 26, 2006 5:58 pm 
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(Bombot @ Jul. 26 2006,01:01)
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As for the original point, I think buying shares with the aim of gaining influence is unrealistic. ?It will surely cost too much. ?I?d only buy shares if you thought the investment was reasonable. ?

At my life style level I agree 100%. People who play in those kinds of games have a lot more cash then I do, that is for sure.  :laugh:

I have investments and in each ase I bought because I believed in the long run they would increase in value.

Thus for me, this is a wonderful fantasy but only that. I will not be buying any shares of GW.

dafrca

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