The SRA story is an easy one to be excited or depressed about No...

The SRA story is an easy one to be excited or depressed about

No wonder its’ SWOT is so extreme. It has two impressive strengths – a very sizable store network and a management team that seem to have an ability to make stuff happen – profit for the first 6 months was proof of that. Brand name might just still scrap into strengths – but lets not go into that debate.

Weaknesses are its poor reporting history, balance sheet (not robust but not a disaster) and share over hang with Kelly randomly dumping. Opportunities are solid with the franchising a sensible and positive strategy (from a profit viewpoint as well as upfront cash payments for goodwill) and the focus by management in refining the product mix. Threats are JB HiFi - but it is not as if they are new on the scene.

Overall – SRA has GE that are obviously believers, a profitable business, franchisees who are now at the coal face and want to make money, management with what seems to be an ability to effect change, board members with significant amounts of their own cash in the game and a CEO with a swag of options. You have people at all levels motivated to succeed – they should have half a chance of doing so.

But I think it is fair to assume given the past – current management are going to under promise, not make releases to the market every month, not talk it up with the brokers but try to over deliver. All leads to a volatile share price.