Tuesday, May 9, 2017

Xero: I've Changed my View

Xero 2017 Earnings

Well that's it. I finally have come around and now I'm starting to like Xero Ltd [XRO.NZX].

I previously hated it as an investment. Loved it as a company always have because its founder is from Hawkes Bay and I originate from the same parts.

Rod Drury really is a man with a PASSION. 

It looks like to me that this passion is continuing to rub off on people.

My brother Tony Rickard owns a business down there, East Coast Powder Coaters and just recently has switched on over to Xero.

Hes a particular luddite and for him to move on over to Xero from what he previously used is no mean feat. I wonder if it's his wife Helen who's responsible for this.

Whether they make a profit or not is part of the mystery. I don't know. Don't think Rod knows either. That was forecast 5 years ago.

I just think if he can get my brother Tony using their software, he can get anyone - given time. That includes the rest of the world. If you have met him and I have on several occasions you just have to ask him about Xero and that's it, you have a one way conversation. He's passionate and I think because i havent even seen the software, there's a bloody good reason for this. It's good.

Anyway Tony's made the move.

I think it's because of the simplicity of the actual product. Its simple. Simple as that.

My bro believes in things that are simple and cheap - otherwise out the door it goes.

In the ten years I've been writing this blog, I've written about Xero around 10 times and interviewed Rod himself 7 years ago.

I get the impression that Rod doesn't particularly like self - aggrandisement  he just likes to get down and do it but I think you're on to a winner here and it's just going to take the rest of the world some time to click onto the fact that Xero is a product they should try, try it - you'll love Xero. 

Rod Drury: Earnings out tomorrow. He emailed me at 8.50am, the 10 May 2017.

Xero 2017 Earnings

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Thursday, May 4, 2017

Ready Fire Aim

Ready Fire Aim: The Mainfreight Story

I started reading this book soon after it came out about 4 years ago.

I started reading it again, and I forgot dear reader that I didn't refer to it here on this blog at the time.

So now I'm going to.

It's really a book that you should file away with Security Analysis and The Intelligent Investor - because you can go back to them time and time again.

It is called Ready Fire Aim: The Mainfreight Story by Keith Davies.

Its an easy read and methinks the Author may have been wrapped up in the whole Mainfreight ethos but I don't care. It's true and wise to the point of an instruction manual on how a business, any business, should be run.

It starts out at the beginning of the company and moves along briskly to give a warts and all account of how Bruce Plested, the founder of Mainfreight did it. This is the story of a company built on the belief that with passion anything is possible. 

Mainfreight was founded in 1977 by the visionary Bruce Plested, who set out to make the company a family, a team, where everyone has a share in the riches and where the word 'management' is banned. 

Bruce and his mate Don Braid have foul mouths. Fuck you is littered through the book and used by Braid and Plested when they don't like what is going on and to various figures throughout the book and over the years to some people who are still friends and business partners and to others who are not. It is not used like "the" it's used to make a point - to the reader. 

The Mainfreight instruction manual is short and to the point. Feel the fear but do it anyway. This is a world where budgets are deemed 'bullshit'. Why spend time preparing figures that are invariably out of date before the ink is dry? Just make more than last year! That is so simple but true. You've got to keep on striving to make things better every day

Initially there would be catastrophic ventures in Australia and America and finally a jaw-dropping moment in Europe with Wim Bosman when Don Braid and his team made their biggest purchase ever only to see most of the turnover and half the profit walk out the door. But they subsequently succeeded - as the have with just about every other purchase and used that success company wide.

This book take one on a journey from small transport company at the bottom of the world to truly successful global logistics company.

You really should give this a re-read and if you havent read it yet go out and buy a copy.

Mainfreight @ Share Investor

Read the MFT 2011 FY Presentation

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Ready Fire Aim: The Mainfreight Story
Ready Fire Aim: The Mainfreight Story by Keith Davies

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Monday, May 1, 2017

Some Tips for the Warehouse for a "Recovery"


I was thinking to myself the other day, I do a lot of that these days, what would The Warehouse Group Ltd [WHS.NZX] have to do the drag itself kicking and screaming into the 21st century.

Kicking and screaming because I don't think that the head guy, Nick Grayson has the balls to do it. It would require an initial cost of some many of millions of dollars "changing tack" but after that most of the initial cost would be pure profit.

What got me thinking was that,and I don't know about you but I havent bought a CD, DVD or any sort of content from The Warehouse - and that's where I used to go to get these things because they were cheaper than anyone else. The same goes for all those nic knacks they sell - you can buy mobile phones and radios etc generally cheaper at J B HI FI - and increasingly Amazon. 

The same goes for books and a whole host of other depts within The Warehouse Roof.

If they did their own figures and I'm sure they have done them already, they could already work out which depts are losing money and ditch them.

You would automatically ditch the entertainment area, hardware, home goods and Jewelry and perhaps the toy area and bring within the Warehouse Roof the Warehouses Stationery brand, their Torpedo brands and Noel Leeming that they have a distinct advantage over the rest of the competition in New Zealand - at the moment.

That way they could survive in the face of specialty stores like Hallenstein Glasson Holdings Ltd [HLG.NZX] that continue to innovate online after 130 years in business and the impending deepening of Amazon's clutch on the public wallet.

You would have to drastically cut staff. Perhaps by as much as 30% AND middle management MUST go. They have far too many - as much as 80%. You don't need 1000 pen pushers looking over your daily sales figures and getting the troops on the ground confused by what comes out of head office. 

Something is seriously wrong here. Staff need to be drastically retrained in the art of the sale because last time I looked a "how much does that cost or does that come in a different colour" were met by a impolite strug of the shoulders.

From working at Pak N Save - ironically one of The Warehouses biggest shareholders - for the last 8 months i have found out - whether a like it or not and I do like it, that the customer is no1 and your fellow workers are you mates and if you don't like it you are politely asked to leave. 

I would suggest at the cafeteria at The Warehouse all is not what it could be or should be and there is a lot of backstabbing. These people should leave first. 

It is about people first in the retailing arena, your customers and your people.

The rest should take care of itself.  

The Warehouse Group @ Share Investor

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