Hi Wangchung, I can remember when we were having a discussion...

Hi Wangchung, I can remember when we were having a discussion about Myer and Nick Scali about a year ago. you were obviously correct, well done. Luckily I worked out Myers pattern and sold the day before earnings etc and managed to make money from it on a couple of occasions.
Looking now with some of the comments, they are not taking into account the extra 237m shares to be issued, when looking at the value of Myer.

Total shares just on 820m, (I made a mistake in the number the other day) including all new ones. At 90c that is a market cap of $737m.
It has an operating margin that has been falling since 2011, from 12% down to 7.9%.
Revenue has been flat over that period despite the announced increase over last year about 2.77b. So EBITDA has gone from $336m down to $217m. There is no assurance/evidence the new plan will stem the downward spiral, so we have a red flag there.
Long term debt has gone from $419m to $441m, no biggie by itself, but a drag with interest payments.
What is worrying is the current account with cash falling over the last couple of years and inventory growing. That doesn't leave much to pay for the new plan.

The new plan $600m over 5 years. That is $120m/yr!!! That is what profit use to be, or 4 times current profit per year!!! Red flag.

Remember Myer have tried a couple of new strategies over the last 4-5 years, and just lost money doing it, why will this be any better?

Let's assume profit triples from next year and stays at that level for the following 5 years. Where does that leave the company compared to now.
$90m/yr less $120m spend = extra $30m borrowing/yr and no dividend. The current $441m debt goes to $221m this year after debt reduced by SPP.

It then goes up again by $150m over 5 years to $371m by 2020, with $600m spent, no dividends and $90m/yr profit. So in 5 years we see if new plan works profit by being 3X this years leaves the company with 820m sh earning 11c/sh with a payout ratio of 70% = 7.7c/sh or an 8% dividend FF.
Sounds nice BUT, what if profit is NOT 3 times current earnings??
What if profit stays the same next year or heaven forbid goes down next year!!! Just like in each of the prior 5 years!!!

Result, higher debt than now after 2 years of spending on new plan, going up to $700m by 2020.
Risk/Reward, pass, look elsewhere for any value.
Use for trading only.

You have to use too many positive assumptions for this to work make any sense at all.

Here is a different plan that would probably work, but doesn't include growth.
Close unprofitable stores. SELL marginal stores. Keep highly profitable stores only. Concentrate on highly profitable ranges. Change store style to less staff and more signage showing customers where items are. Have pay point at the store exits, or if large one at the centre. Have pay points staffed, not roamers. Buy properties that house stores, keeps rental low, do slowly over a number of years.