This has turned into an absolutely toxic situation. I'm going to say Yes. DJ's impairments portend serious trouble come Myers own slash and burn on 21/3 which is now just over a month away.
From the AFR;
"However, analysts say the company is at risk of breaching debt covenants if earnings fall another 10 per cent to 20 per cent or if shareholder equity falls below $500 million.
Equity at last balance date was $1.07 billion, underpinned by $986 million of intangible assets, which are now being reviewed and will likely be written down at Myer's half-year result in March."
Is this a joke? Equity is 92% underpinned by intangible assets that are almost certainly going to be impaired.
Current total market cap on Commsec is only $456million. This is a punctured hole compared to shareholder equity at last balance date.
David Jones took a $712.5m or approximately a 1/3 cut in goodwill. I am going to assume Myer will take a similar impairment or worse.
Given the outlined covenants I am having serious doubts about Myer as a going concern for lenders.
Looks cheap but potentially very toxic. I'm staying on the sidelines for their March update.
Keen to hear fellow traders thoughts/.
Cheers
- Cali
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Last
85.0¢ |
Change
0.015(1.80%) |
Mkt cap ! $707.0M |
Open | High | Low | Value | Volume |
83.0¢ | 87.5¢ | 83.0¢ | $3.184M | 3.714M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
5 | 43459 | 84.5¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
85.5¢ | 2465 | 2 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
5 | 43459 | 0.845 |
6 | 81388 | 0.840 |
4 | 44547 | 0.830 |
1 | 40000 | 0.820 |
1 | 12250 | 0.815 |
Price($) | Vol. | No. |
---|---|---|
0.855 | 2465 | 2 |
0.860 | 37238 | 4 |
0.865 | 74726 | 4 |
0.870 | 34295 | 4 |
0.875 | 218820 | 7 |
Last trade - 16.10pm 02/09/2024 (20 minute delay) ? |
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