Initial Thoughts After Taking Position

Hi Guys,

I've been following EDV for a while as I feel that at it's core it's a relatively simple company to understand that includes what should be a great business (Dan Murphy's) and two quite good businesses (pubs and BWS).

I put 3% of my portfolio into it on Friday at $4.40 and will probably move to around 5% if it stays at these levels and I can build up some more cash in time.

At a high level I think at a PE of around 15 (this could expand out a little bit if the EPS for FY25 ends up down) and a fully franked yield of 5% I can afford for this to go sideways for a while and hope a new CEO comes in and get's things back on track.

I'm also thinking about this against a back drop of an overall market that's very high (for example we've got WES trading at 30 times earnings) and in the context of thinking I'm a bit property heavy in my overall portfolio and looking for something to offset that a little bit.

I've been doing quite a bit of reading to bring myself up to scratch and also listened to the recent conference call that included the Q1 FY25 update that disappointed the market.

I'm trying to weigh up what I see as the negatives here which are that we've had a high degree of management turnover, the underlying business doesn't seem to be able to fully execute on it's strategy and that alcohol consumption overall is in decline (great for society but not great for EDV!).

I thought the most relevant question on the conference call I listened to (which was quite focused on the business being effected by external factors in the broader economy) was the person who asked how confident management is that the current problems really are all external or whether there's something wrong with the operations at Dan's? I would say that question is still up in the air with these guys.

Interesting to hear what some longer term holders think of their investment.