Good pickup re M&A. Assuming the H1 results are in line with guidance, it should put TRS in a good position for M&A as either an acquiror or acquiree. The one clear impact from Amazon on the global retail industry is that it has/will reduce industry margins. Accordingly, there will likely be significant further consolidation as weaker players are swallowed up and stronger players try to build scale to improve efficiency/lower costs through improved buying and supply chain efficiency. Accordingly, I can see both TRS as an acquirer domestically as it swallows up smaller players struggling in the current environment, and also as an attractive target for one of the US/Canadian players (or others) as it offers a comparatively cheap, market leading position in a developed market. I haven't looked in detail at the opportunities for supply chain synergies with a US/CAN parent, but I would presume a large part of their product base comes from China, so their ability to consolidate sourcing/buying should provide a meaningful benefit to both entities. Discount operators will survive in an online retailing world if they can maintain their lowest cost/price position, so increasing scale will be critical as players like Amazon continue to build theirs.
But before I get ahead of myself, we still need to see some decent H1 results.
Add to My Watchlist
What is My Watchlist?