Unfortunately not the top end of guidance we were all hoping for...

Unfortunately not the top end of guidance we were all hoping for but an OK result. P/E <10x, and EV/EBITDA <3.5x.
I listened into the results call. Not a lot to report, however they seem confident about meeting the 1% comps in H1. They also mentioned about 90 stores are up for renewal which should continue to give them opportunity to churn underperforming stores. Although they didn't speak to the H2 19 forecast, what we do know is that the H22018 result included the HC sourcing setup costs (~$1m), which should provide some support for an improving H2 result. They also noted that the basic product lines should support current levels of profitability, but a step change improvement would rely on new GM lines. They talked confidently about their plans for this, but this heads directly into categories where Kmart is trouncing the market so will be challenging. They also said they have been investing in more merchandising people, so their success will depend on whether they have found the right people.

Overall, I suspect the market will want confidence that H1 19 will be at or above H1 18, and an improving outlook for H2, before getting too excited (and this is unlikely before the AGM at the earliest).