The Rivers Saga, page-5

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Galba

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27/05/15

12:46

Post #: 15359826
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Originally posted by MarkieMills ↑

Alonso - I shorted a tiny number - so luckily not annoyed as such. I am surprised the SP has hung in there. Looked at the business excl rivers - it seems that EBITDA has gone from 27.7 to 29.5m (pcp). Like for like sales went from -4.9% v pcp to 5.7%. So Ebitda outstripped LFL by a tiny bit. However interest due to the new strategy that requires more working cap would subtract $1m possibly for the half. The extra spend in 2014 on Millers brand rejuv, omni channel growth, and City Chic was $25.4m, and depreciation over 5 years would subtract $2.5m for the half??? - so adjusting for this you have my adj EBITDA going from 27.7 to 26m this year - which does dovetail with the tougher retail climate. My numbers are very rough here obviously.

Koro - re Perlstein - just checked and it is $836k. Quite a good amount of pay - not sure the value is there ATM. If Rivers can be rejuvenated - then he is good value - if not - then maybe he has been a bit over-confident and maybe should move up to board level and give somebody else a go. It is nearly time to make a decision on that I suspect. This business had great metrics in the past - but I think those times might be gone forever. If they are targeting the budget end of the market - they need to get omni working superbly. New blood may be needed for that? I see that there are no etail rivers shoes listed on ebay for example - just private listings by the looks.

I'm trying to work out whether more direct sourcing is positively or negatively impacted by the lower AUD, v their previous strategy. Maybe they have staffing costs OS that are higher now in AUD?

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Anyone know how many stores there are of these guys, have this feeling that Under the Radar are talking about them tomorrow....

The other is a retailer that has 1100 stores and has the potential to be a big company, but right now is masquerading as a small cap. It’s trading on a single digit earnings multiple and it has net cash. The bottom line is that despite the anaemic retail environment this company can deliver accelerated earnings growth over the next couple of years.

SFH Price at posting: 55.0¢ Sentiment: None Disclosure: Not Held
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The Rivers Saga, page-5

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