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
82.0¢ |
Change
-0.035(4.09%) |
Mkt cap ! $686.7M |
Open | High | Low | Value | Volume |
85.5¢ | 86.0¢ | 82.0¢ | $450.3K | 542.1K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
3 | 47000 | 81.5¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
82.5¢ | 1035 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
3 | 47000 | 0.815 |
4 | 134250 | 0.810 |
1 | 6211 | 0.805 |
1 | 8800 | 0.800 |
2 | 8797 | 0.790 |
Price($) | Vol. | No. |
---|---|---|
0.830 | 4481 | 2 |
0.840 | 10000 | 1 |
0.845 | 6211 | 1 |
0.850 | 1120 | 1 |
0.855 | 12015 | 2 |
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