1. MYR's capital raise of $220m in Sept 2015 was solely for working capital, the lifeblood of retail. It allows confident stock purchases on better terms, reduces risk and saves a little interest. Restoring the working capital levels shrunk during the private equity phase was essential. Without it, I would not have touched MYR.
2. As recently as 20 July - ten days before the end of the 30 July FY - MYR affirmed NPAT (pre-implementation costs and significant items) for the year would be between $66-70m. Yes, there are non-cash impairments of Topshop and sass & bide of $45.6m, but I expect MYR to pay a 3c ff divvy for the half, making 6c for the year. At the current SP, that is an 8.2% yield, 10.6% including franking credits.
3. MYR does NOT need a stellar result to destroy the 15% short position against it. It just needs the level of profitability to be enough to pay the divvy and to convince the market this is sustainable and credible. There are many investors seeking cash returns who will regard this as irresistible.
If you look back on the MYR HC forum, you will see I have consistently argued this and invested accordingly.
My walk around the Doncaster store was not the beginning and end of my research. It merely affirmed my analysis.
GLTAH
Ash
MYR Price at posting:
74.0¢ Sentiment: Buy Disclosure: Held
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