Ann: Change in substantial holding, page-11

SOLD today.

My game plan was to sell out around nta plus franking credits.

nta at 31/12 /2019= $4.88
franking credits at 31/12/2019=$49.6M
net cash from capital raising = $24M
BUT $4M of that for business optimisation initiatives = restructure costs ?
Adjusting for the capital raisings nta + franking per share = ( 4.58 x 28.9 + ( 24 -4 ) +49.6 ) / 38.2 = $5.29

Last 3 years , earnings in the 2nd half have been negative.
Note revenue up 5.7% in 1st 11 weeks and 36.1% in 12 week of Qtr3 of FY20 so assume breakeven in 2nd half of FY20 before abnormals.
Eps= 32.9c in H1 of FY20.
Diluted EPS FY20 = ( 32.9 + 0 ) x 28.9 / 38.2 = 24.9 c
( For simplicity I'll ignore Deprec > capex and savings on interest from the capital raising )
At $5.49 , est P/E FY20 = 22.0
Not CHEAP .

The new CEO and new Chairman are well regarded which is a positive.
With a new CEO I'm wary of restructure costs and writedowns for at least 12 months.
eg store closure costs, inventory writedowns, retrenchments.

2 missed dividends.
A dilutive capital raising.
Both negatives for me.

No longer CHEAP on fundamentals.
Speculation that new CEO and Chairman can deliver on game plan is driving the price.