huge profit increase for wes, page-23

Having worked for a large retail in turnaround it always has these overreactions to short term events. It seems that people just look at headlines and not the plan. I find it strange that we get all excited about the half year or full year presentation in a business that has a 5 year plan. When WES was over geared they had to worry about the SP as that one of the factors that makes bankers nervous. They are no longer over geared and the last capital raising took them into the realm of being maybe slightly under geared.

However the real issue that you should be watching is if they cut back on capital expenditure on the divisions. That will kill the plan. However they are spending a lot and most if not all of it is coming out of group cash flows.

Having spoken to people who have visited the new look Coles stores I can only say that they are impressed. I already feel that the value proposition in Coles has shifted and that I am happier with significant parts of the non fresh offers and think that each week the fresh seems to get better.

The only chain I question is Kmart - Seems confused and really a nothing store just a big box trying to move big volume. I don't like Big W either and think that neither really make me want to go in there. My Target experiences have been better than before. I dont use Office mart so cannot comment and I think that Coles express has a long way to go.

Then you have a jewel in Bunning's so I think that anyone who suggests trading this stock in the short-term is just lucky if it works for them as the redevelopment plan will never give a direct response so that at times the results take a bit of time to work through and results (assuming they are implementing the 5 year plan as stated) are not directly related to earnings.

I agree that this is one for the bottom drawer.

The EPS must drop next year as the shares issued recently have to be counted for a full year. However if they are lucky their plan may hold the EPS up.

However anyone taking decisions on the long term investment proposition should be measuring the progress on the 5 year plan. However I note that very few if any questions are ever made on this issue.