In broad terms, agree PGR looking good value in current...

In broad terms, agree PGR looking good value in current reasonably robust consumer environment. It was as recent as 14 months ago like for like sales were falling for PGR, which at the retail end they've now moved to some +3%. The CEO has warned of a tougher start to the 2016 calendar year so this needs to be watched. Cashflow conversion wasn't exceptional in the recent half year, however goods in transit increase appears to be the culprit here, where given overall sizeable sales growth, newly aged inventory feed eating into free cash generated, so likely justifiable for now. Interesting was the profit contribution of $96,000 from White Runway; suspect unlikely to be representative of ongoing profitability given they booked the contingent consideration payable on it, which assumes they believe hurdles will be met in forecast period.

Naturally there are some key differences in the businesses; its generally younger customer demographic, smaller size, wholesale sales dependency, recent overall sales growth driven by annualisation of recent acquisitions etc.

I like PGR's EBITDA sales ratio, more in line with what SFH should be setting as its objective, where at 10% SFH would effectively be doubling its underlying earnings, which is not an unrealistic or unreasonable target for the business.

It needs to be Perlstein's key priority and he should be measured, rewarded (or hung) against it religiously.

The wide product portfolio of PGR gives it options, albeit probably somewhat more exposed to consumer sentiment and discretionary spend. I also like progress in dealing with currency headwinds, on line sales growth, store roll out, action on Metallicus, licensing growth along with reduced dependency on wholesale sales (Black Pepper). On line sales growth a common theme, interesting how the bricks and mortar stores here have heeded US retailers' lessons and moved to aggressively pursue dual sales channel strategy in recent periods. Can't beat them, then join them.

As PGR's October 2015 defense release mentioned, comparable EV/EBIT market multiples are 8, which when added to cash on hand naturally provides for a valuation that is a lot higher than current trading levels.

PGR's majority owner reduces takeover appeal from unrelated parties, yet concurrently could result in a mop up (higher) offer at a later date.

Encourage you to read the Cotton On AFR article released yesterday; revealing in respect of long term business growth thinking - I had thought Jim Collins was dead. Perhaps not unrealistic in expecting some impact on SFH via common Hardwick directorships and ownership.