The Warehouse Group Limited

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

The Warehouse Group Limited (NZX: WHS) has evolved from the single The Warehouse store to become one of the leading retailing groups in NZ. The company consists of 6 core retail brands: The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7, 1-day and TheMarket. Kalkine’s Investor Report covers the Key Financial Metrics, Risks, Outlook, Technical Analysis, Key Business Updates along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders have been highlighted in the chart, which together form ~72.61% of the total shareholding.

1.4 Key Metrics:

The company’s gross profit margin witnessed a fall of 200 basis points to 32.7% in H1 FY 2023. Notably, its cost of doing business rose 3.5% mainly because of planned core systems development, for which the large proportion of these previously capitalised costs are now treated as operating expenses under SaaS accounting standards.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

2.2 Financial Highlights:

Section 3: Key Risks and Outlook:

3.1 Dividend History: Because of the challenging economic outlook, uncertain financial performance as well as heightened capital expenditure, the Board decided not to pay an interim dividend for H1 FY 2023.

Section 4: Stock Recommendation Summary:

The stock has witnessed a fall of ~43.6% in the last 6 months. The stock has a 52-week high and 52-week low of NZD3.75 and NZD1.71, respectively.

4.1 Recommendation

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 24, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Disclaimer

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