re: Ann: Ceasing to be a substantial holder f... Afraid that I...

re: Ann: Ceasing to be a substantial holder f... Afraid that I cannot be as optimistic on MCP.

I see a lot of their "consumer" division product which can be classed as discretionary will be caught up in the dismal state of affairs at the retail level. Aside from slowing demand they will no doubt be caught up in the abnormally high level of discounting being experienced in that sector.

Also, I have noticed that our local Woolworths has dropped a couple of MCP's personal care line products and substituted same with their own house brand. Is this the start of a wider move against their product lines?

They should benefit from the 8% appreciation of the AUD in the 6mths to December 2010, but based on the above considerations, overall I feel they will experience a -10% result based on the pcp, and a flat to +5% result for the full fiscal year.

My numbers are half year are $10mio NPAT, and the full year NPAT of $25.5-$27mio. Final dividend of about 9.5c giving a full year dividend of 21.5c and a payout ratio of 57%.

Based on the current share price of $3.11, that is a yield of 6.9%, and a p.e. of 8.2.

Unless things improve dramatically on the retail front then I would expect management to give a very cautious trading outlook, and all things being equal the share price to drop back below $3.00