I had a good look through my local TRS store today and the more...

I had a good look through my local TRS store today and the more I saw the better I felt about the full year result. The store setup, product offer, prices etc are in as good a shape as I have seen for some time. This got me thinking about their likely surplus cash position at the full year. TRS should conservatively have at least $15m-$20m of surplus cash at the full year. This gives them some fantastic opportunities to add s/h value via either M&A or capital management. There was an interesting AFR article this week on Alceon group, private equity owner of Cheap as Chips, which mentioned TRS as a potential buyer when they decide to exit. With 40 stores, this would be a big boost to TRS's scale and utilisation of their DC and HK buying capability. I have no idea what Cheap as Chips financials look like, and when it might be sold, but assuming TRS could get if for a reasonable multiple, synergies should make it a great purchase and shouldn't require much, if any, debt.
I've also run some numbers on a buyback (the Chairman said previously they didn't want to do a buyback, but that may have changed with improved operating performance). A $15m buyback at current prices would provide a 10% increase in EPS. $15m could alternatively fund a 52c fully franked special dividend.
My preference would be reasonably priced M&A as eco's of scale will be an increasingly important TRS strength as Amazon grows over the next few years (but I'd happily take any of the capital mgt options as well ;-)).