Harry's Holdings

[ssian]

No idea
Probably +2d ?

[kazukirai]

But the industry is indeed a tough one.

A cursory look at St James Holdings (similar but not entirely the same) shows that it's been losing money and having negative operating cashflow for some years now. This is despite the fact that it's one of the more popular nightspots (at least that's what I hear since I don't like clubs very much).

Add to that the numerous nightspots that come and go around the island and that's a very good indication of the industry. Relative to all that, I guess CEO Mulani's been doing a decent job.

I'm still sucking my thumb on this one. (Lousy industry vs. Good CEO) Will the expat formula overseas still work?

[Blackjack]

But the industry is indeed a tough one.

A cursory look at St James Holdings (similar but not entirely the same) shows that it's been losing money and having negative operating cashflow for some years now. This is despite the fact that it's one of the more popular nightspots (at least that's what I hear since I don't like clubs very much).

Add to that the numerous nightspots that come and go around the island and that's a very good indication of the industry.

I thought no one would bring it up. Didn't want to be a wet blanket seeing the seeming high level of interest based on the posts till date.

For me, this is one industry I would never touch. It does not change whether it is now easily traded or not.

[wj888]

I'm still sucking my thumb on this one. (Lousy industry vs. Good CEO) Will the expat formula overseas still work?

If you are a value investor and believe what Buffett had said... something along the line of...

Between a good CEO and a lousy company(could be industry-remember berkshire in textile), it is usually the later's reputation that will come out intact.

So.. no need to suck thumb on this one.

But if you are a trader.. then please disregard the comment.

[dydx]

Quite obviously, the risks and operating/business characteristics of a single-location, large, trendy, and performers-focussed, entertainment hub like St. James, are very different from a multi-location chain of premium, but simple and each tastefully designed contemporary pubs (some are cum-diners) plus a few small, niche restaurants, like what Harry's now has and operates.

I think we mustn't forget the present rather large Harry's group operation essentially grew over the years from its first pub at Harry's @ Boat Quay, mainly through re-investing of past profits, and supplemented partially by a small amount of public capital raised when the company joined Phillip Securities' OTC.

As for St. James, the business only made a profit in the 1st-year (FY08 ended 30Jun08) of its listing (via a RTO), has been loss-making and accumulated approx. $14.0m worth of losses since, and now appears to be financially quite weak.

Potential investors should first take a good look into Harry's website and also review the latest corporate presentation.....
http://www.harrys.com.sg/
http://www.harrys.com.sg/Downloads/Harry...011-v2.pdf

[mrEngineer]

I see both local companie Harry and Challenger as fantastic brands that will establish in the Asian market just like how Starbucks managed to emerge out in US But now it is a little young to get involved as your capital would probably stuck for another 10 years before it begins to shine.

[kazukirai]

If you are a value investor and believe what Buffett had said... something along the line of...

Between a good CEO and a lousy company(could be industry-remember berkshire in textile), it is usually the later's reputation that will come out intact.

So.. no need to suck thumb on this one.

Hi Wj,

Thanks for the timely reminder. I did think of Buffett's experience with Berkshire when writing that but I still went ahead and wrote what I wrote anyway.

It must be the romanticism with the idea of owning my own bar/pub. I believe this is the quote you were referring to:

When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.

Having said that, not that I'm vested but I believe that Pub-going, despite its cut-throat razor-thin margins, is slightly better than manufacturing textiles as an industry and a business that I can understand much better than the other fancy stuff which is why I was looking at Harry's in the first place.

[lonewolf]

I think I am dumb. Cos I keep reading over and over about what Buffet says brilliance management and bad company, and I still dun totally understand what he is trying to say.

'reputation of the business remains intact' seems to imply that its not necessary to put a good management to bad company cos the company will survive intact. Or maybe he is saying that it will be brilliant management that will have its reputation tarnish.

Or is Buffet is saying that, if the company is intrinsically bad, then however good the management team is, it would not make a difference.

With all due respect, I dun agree with the great one 100%. The flip side of what Buffet seems to be saying is that if a company is intrinsically good, then even monkeys can do a decent job running the company. But we have seen many examples of good companies ruined by bad management; and bad company surviving with good management.

[kazukirai]

I think I am dumb. Cos I keep reading over and over about what Buffet says brilliance management and bad company, and I still dun totally understand what he is trying to say.

'reputation of the business remains intact' seems to imply that its not necessary to put a good management to bad company cos the company will survive intact. Or maybe he is saying that it will be brilliant management that will have its reputation tarnish.

Or is Buffet is saying that, if the company is intrinsically bad, then however good the management team is, it would not make a difference.

With all due respect, I dun agree with the great one 100%. The flip side of what Buffet seems to be saying is that if a company is intrinsically good, then even monkeys can do a decent job running the company. But we have seen many examples of good companies ruined by bad management; and bad company surviving with good management.

I think the point Buffett was trying to make was that even if you have the brightest people in charge of a business with bad economics, it wouldn't help the business in any way.

Example, even if Jack Welch (or some business titan of the time) were put in charge of the horse-drawn carriage business, it still wouldn't have saved the business from being overrun by the introduction of motorcars.

Lonewolf-san, I'm not saying that your view is wrong but perhaps it is the semantics of the language. I think your point on companies surviving is true and I have 2 thoughts on that point:

1) Is the company surviving because it has divested in the original, bad economics business? (ala The Jack Welch way) In this sense, you and Buffett would both be right because both the reputation of the business with bad economics and the company has remained inatact/survived.

2) Is survival merely enough? After all, the Investor's chief concern is a decent rate of return. In this sense, would it be enough to merely bet on a company's survival?

[kazukirai]

The great PR machine's at work.

CNA's running the article that was posted ahead of the start of Harry's impending debut on the Catalist.

Harry's rides on strong brand to grow abroad