Ann: Results of Meeting , page-8

What do you think will happen to the share price once the buy back is complete. IMO the buy back is as miss-managed as the operations of the company.

JM made the comment yesterday:

"The buy-back demonstrates our commitment to maximising shareholder value through appropriate capital market initiatives."

On 14/10 (less than two weeks ago) the company was paying 74.5 cents per share during the buy back. What did they think would happen yesterday when the followig comment was made by JM:

"The 2012 financial year is expected to be a challenging one but, having transformed the business, we are now well placed – strategically, operationally and financially – to deal with such challenges and then benefit from any subsequent improvement in market conditions."

Only to be followed by SM with the following comments:

"..it will take some time to make up the lost sales [as a result of Kmart] as we build distribution elsewhere."

While the rest of the retail market is spruiking that the they are stating to see things turn for the better after disastrous 2010 - 2011 years, PBG is saying that things are actually getting worse. Bet anyway where is that improvement coming from SM?

"On-line currently has a small share of the overall retail market – generally around 5%. But it is growing rapidly and will continue to do so. 97% of Australian internet users have shopped on-line. 25% of Australians buy on-line at least once a week."

The big saving grace of the company..let's go direct to the consumer via the internet, the big catch cry of 2011. Well SM that sounds impressive with those big numbers, but wait, overseas is seeing online sales of approx 10% but how much of the lost sales from 90% of the market is expected to be replaced with online.

So SM how is that online strategy working for you these days so that we can gauge whether those comments are justifiable, or whether you are just blowing a lot of hot air. Well have a look for yourself:

http://looks.bonds.com.au/ - The website is under construction.

Or how about the simplest one to set up online - http://www.sheridan.com.au

No! No online shopping available. This is after Gerry 12 months ago gave it the biggest and best advertising campaign with his whinging, and only now SM is starting to think about online as the saving grace.

The online argument has been debated over and over again by various parties. You need either volume or value to make it work. Otherwise the postage/delivery cost just eat up the profits, especially when postage costs about $5 - 10 depending on the shipment (to anywhere in AUD). For a $10 - 12 purchase for say underwear, and a gross profit of 40% excluding distribution and overheads you have to be selling 2 - 3 per purchase on a like-for-like basis to be no worse off.

So back to my opening comment of miss-management. Considering the comments were coming, they have just wasted shareholders funds buying back shares at 74 cents when there was a high probability that they would crash following the AGM. They preach capital management, and yet deliver the total opposite. So with poor decisions like that we really expect the leopord skin underwear to change its spots.

Let's wait until SM has run the numbers on the saving grace and actually implemented a new strategy before drawing any conclusions about managements abilities and the future of the company.

IMO I see a board spill next year, from those shareholders that go in one the float and saw their share price fall during the GFC to sub-20 cents, only to see it falling again.