Bcom Hons. Financial Analysis and Portfolio Management
Essay by craigjaffa • February 21, 2018 • Research Paper • 1,650 Words (7 Pages) • 898 Views
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BCom Hons. Financial Analysis and Portfolio Management.
Module:
Economics – ECO4105
Group:
Group
Project Topic:
Bottom-up fundamental Analysis of Woolworths Holdings Limited
Table of Contents
1. Introduction 1
2. Woolworths at a Glance 1
3. SWOT Analysis 2
4. Porter’s Five Forces 3
5. Macro backdrop……………………………………………………………….4
6. Conclusion 4
7. References 5
APPENDIX A: ……………………………………………………………………….6
APPENDIX B: ……………………………………………………………………….7
Introduction
The aim of this report is to assess Woolworths Holdings Limited (WHL) and its current environment, its business performance, prospects and investment potential. This report will take a bottom-up approach where the SWOT analysis and Porter’s Five Force model will be used in the assessment of WHL. Coupled with Macro analysis and Market valuation, the aim is to determine potential upside to WHL current market valuation.
Woolworths at a Glance
Woolworths Holdings Limited (WHL) is a JSE listed South African based retailer that operates in two segments, clothing and groceries. The company has, over time, expanded to become a large diversified Southern hemisphere retailer with operations in South Africa, Australia and New Zealand. Table 1 summarizes WHL business model as of financial year 2016. WHL SA Stable contributes the most towards revenue and profit as shown in figure 1.
Table 1: Woolworths Holdings business model
WHL Retail | David Jones | Country Road | |
Product Offering | WHL retail is SA based and offers premium quality food and clothing. | DJ is an Australian based retail and fashion division of WHL. | Country road is Australian department store retailer. |
Ownership | Wholly Owned | Wholly Owned | Wholly Owned |
Established | 1931 | 1974 | 1838 |
Geographic mix | SA | Australia, New Zealand and SA. | Australia |
Private Label Brands | WHL, Studio W, RE, JTOne. | David Jones | Country Road, Trenery, Witchery, Mimco |
LSM Mix | LSM 8 -10 | LSM 8-10 | LSM 8-10 |
Figure 1: WHL Revenue and Profit before tax split.
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Source: Company Data.
SWOT Analysis
For internal company analysis we used SWOT analysis. The SWOT analysis will help us in assessing the effectiveness of management’s strategy. This is the outcome of our SWOT Analysis on Woolworths Holdings Limited:
Strengths
| Weaknesses
|
Opportunities
| Threats
|
Based on the analysis there many synergistic opportunities that can unlock value for Woolworths shareholders. Weaknesses highlighted, mainly the David Jones one, are no stranger to Retail companies as most companies tend to fail when moving to other jurisdictions. Woolworths strategy has worked very well in SA, mainly SA food. I think Woolworths can turn key weaknesses into positive.
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