Despite a sharp dip in 2H 23, which the market ought expect of...

Despite a sharp dip in 2H 23, which the market ought expect of almost every retail non-food stock on the ASX, MYR will still manage to eke out NPAT of A$4-8 million in this half.

Overall, given the carnage that some other retailers have shown or are likely to, it's a reasonable result. In poor years, MYR traditionally records a loss in the second half as Valentine's Day and Easter are minor sales dates compared to pre-Christmas, all of which is in 1H 23 given that finishes at the end of January for MYR.

The outlook very much depends upon the health of the Australian economy. With spendthrift Labor governments everywhere on Australia's mainland, they are unable to control spending: as a brief example, the Victorian state Budget claimed '3000 to 4000' public servants would be sacked but that's now been rescinded in yet another example as to how unions wag the tail of the dog. If government spending continues unabated, there's a very good chance inflation will remain way above the RBA's two to three per cent range, and hence interest rates will have to rise further. This in turn tends to crimp retail spending.

While DYOR is always best, broker CLSA this morning (or more likely overnight) put out a new price target of A$0.76. MYR in my view remains a takeover target.

The lease costs MYR faces are substantial, although it's slowly been exiting unprofitable stores.

The net cash position at $120 million is a big drop from the previous $176 million so it'll require careful management in not great economic times.

David Jones (owned by private equity) announced yesterday it was culling 100 staff.

Perhaps MYR will have to take similar measures: no doubt this will be touched upon (even if only via a SH question) at the AGM.

Increased migration is not popular with 70 per cent of Australians but is continuing at a very high level, so this may to a minor extent assist sales.

The online performance for sales remains good, but let's remember that 79.5 per cent of MYR's sales are through personal in-store visits.

I bought back in to MYR recently.