Was an interesting read and raised some issues we looked at when we invested in Shriro. It's true that Casio can discontinue the licence with Shriro just like Telstra could decide to not renew licensed shops with VTG when we bought in at 27 cents, or Tatts licence with Jumbo to sell lottery tickets. After understanding the deep and long standing relationship Shiro have with Casio there is a very small risk of this occuring but acknowledge it's a risk nevertheless like Vita Group and Jumbo. In regard to 3rd party brands it's clear that Shriro see's thier future in proprietry brands which I agrre with. 3rd party brand owners can be fickle changing distribution for thier products. In the case of Blanco Shriro distribute ovens, cooktops and rangehoods of thier Omega and Robinhood brands so doesnt appear the exclusivity clause is enforced by Blanco. Getting ready for the 6 cent dividend, 7 cents at a push , with franking credits that equates to 8.55 - 9.9 cents in my Superfund. Presume that's why the share price is moving up of late. Valuation for this stock with single digit growth on a CY 17 PE of 12 and $15 NPAT is $180M market cap. IF they can show significant growth overseas with the Heston BBQ range being rolled out for the European summer then expect PE multiple expansion.
SHM Price at posting:
$1.21 Sentiment: Buy Disclosure: Held
