A Contrarian Buy, page-93

In todays AFR, not sure how this will impact price but i will stick to sidelines for the time being.

"Woolworths Holdings ups pressure on Myer by slashing David Jones value by $712m"

"Myer says it will reassess the value of almost $1 billion in intangible assets in March after South African retailer Woolworths slashed the value of David Jones by $712 million or 34 per cent, citing poor execution of turnaround plans and structural changes in retailing.
Woolworths, which paid $2.1 billion for David Jones in 2014, flagged the write-down in a trading update last week, warning that group earnings per share for the 26-week period ended December 24 were expected to fall 'more than 20 per cent' because of a potential 'reassessment' of the carrying value of David Jones' assets and the absence of $172 million in profits from the sale of David Jones' Market Street store in Sydney, which boosted earnings in the year-ago period.
Woolworths completed the reassessment overnight, booking non-cash impairment charges of $712.5 million against the carrying value of David Jones - mainly against goodwill - which was in the books at $2.1 billion.
Woolworths said the write-down reflected tough and unprecedented trading conditions and structural changes that had impacted performance across the Australian retail sector.



Myer to reassess intangibles in March
Woolworths' decision to write down the value of David Jones has increased pressure on Myer's board to review $986 million in intangibles on its balance sheet, including $465 million in goodwill and $421 million in brand names.
The value of intangibles far exceeds Myer's market value of $509 million.
"Myer assesses the carrying values of intangible assets as part of the half and year end reporting process, which is signed off by PWC. Our next trading update will be on Wednesday March 21," a spokesman said on Thursday. reiterating that the next reassessment in March was normal practice.

Myer shares have fallen 50 per cent in 12 months and 19 per cent since mid December, when chief executive Richard Umbers issued another profit warning following an unprecedented 5 per cent fall in sales in the first two weeks of December.
Myer has repeatedly defended its treatment of intangibles, most recently at its annual meeting in November, where non-executive director JoAnne Stephenson said the retailer had "rigorously" considered whether it needed to take impairments against goodwill and brand names.
"The kind of triggers we would look at is when the market cap is less than that shown in the assets of the business," Ms Stephenson said. "That would cause us to look at either the half year or full year, if there's a deterioration in the financial performance that would also cause us to look at it."



Read more: http://www.copyright link/business/...s-value-by-712m-20180124-h0nzv9#ixzz55FK78org
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