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petepan

1,708 Posts.

30/01/15

16:22

Post #: 14669666
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Originally posted by Vesupria ↑

Thanks Petepan

The point you made about who owns these stores is a good one. I did wonder myself if there could be some kind of related party involved.

The most important part going forward is always the price paid for such stores. The more you pay, the less is your invested capital. Increased profitability is meaningless if you overpay for the assets / rights in the first place.

I am intrigued by the line of thought that they could acquire stores en-masse at decent prices. If these are the most profitable stores, as mentioned in the presentations, why would the sellers be selling?

It doesn't have to be a conspiracy theory, many distributors have destroyed equity value by chasing the profit margin from the retail end of the chain....

It's interesting that PAS Group (PGR) is doing something similar. It has been smashed by the market since listing.

Expand

Have a look at how shareholders are suffering with NOE.

Major shareholder: "Yes, I will buy you out." "Give me more time." "Just a bit more time." Then silence....in the meantime, loans to related parties start piling up.

SBB Price at posting: 6.5¢ Sentiment: None Disclosure: Not Held
2 Upvote

0 Great analysis

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