Ann: Trading Update, page-7

DMX May Report

And Shriro, too, reported being impacted by supply chain issues including freight costs. Shriro’s updated full-year EBITDA guidance of $20-25m implies a very substantial contraction for the second half. Its shares are down 15% for the month, and while the company clearly has a large earnings gap in the short-term, its fundamentals remain intact and at these prices we see the shares on a 6-7 times earnings multiple, little implied goodwill considering tangible asset backing, a robust balance sheet with 15-20% surplus capital, and a fully-franked double-digit dividend yield. We’ve taken the opportunity to add to our holding in Shriro this month following its downgrade.