Myer Holdings Ltd
 
The company has reported its results for the third quarter of FY 2015 with total sales up 2.4% to $ 661.8 million and year-to-date sales up 1.7% to $ 2.42 billion while comparable year-to-date sales were up 1.1%. These results reflect contributions for the full period from the four major refurbishments and the two new stores as well as continued strong growth from the online business. During the quarter, trading conditions in Queensland and Western Australia remained subdued. The company is currently conducting a thorough review of its strategy and making good progress and further details will become available in due course.


Myer Daily Chart (Source - Thomson Reuters)
 
In a store network update, the company announced that it would be exiting its store located in the Top Ryde City shopping centre in New South Wales. CEO and managing director Richard Umbers said that while the day-to-day focus remains the running of the business, work is continuing to conclude the strategic review process which includes a review of the productivity of all assets. The company has undertaken an extensive analysis of the current and future customer base on a catchment by catchment basis for better decision-making. A review of the data shows that the majority of customers at electing to shop at nearby Myer stores and over the past year, the company has been conducting trials on three standalone specialty stores in Melbourne. The stores stocked the company's exclusive brands in menswear, womenswear and children's wear. Though significant insights have been gained, the company has decided to close the stores at the end of August and to focus on the core business of bricks and mortar and online.
 
The company has also announced the successful refinancing of its syndicated debt facility now totalling $ 600 million. The new facility is characterised by more favourable pricing, increased tenor and better terms. Umbers said that the successful refinancing outcome delivers a number of benefits and that he is encouraged by the level of support the company has received. In addition to the lower interest margin, the covenant relating to the fixed charges Cover Ratio has been lowered from 1.65 times to 1.50 times across all facilities. The three tranches are $ 145 million expiring August 2019, $ 180 million expiring August 2017 and $ 275 million expiring August 2019.


Myer Debt Refinancing (Source - Company Reports)
 
Some details are beginning to emerge about the turnaround strategy including the decision to get rid of brands (up to 100 brands) and this would be logical in its effort to become a premium fashion retailer. The number of permanent employees are being reduced accompanied by a reduction in working hours for part-time and casual employees. We have no argument with the steps but believe that the major problem the retailer has is in acquiring new customers and we have yet to see any concrete plans to accomplish this. However, in our view, anything that the company plans will be treated with a pinch of salt because of the track record of consistent market underperformance. All in all, we believe that you are better off without this stock and recommend that you sell.

ASX Ltd
 
The group is a multi-asset class, vertically integrated exchange group, and one of the world's top-10 listed exchange groups in terms of market capitalisation.


ASX Daily Chart (Source - Thomson Reuters)

The activities span primary and secondary market services, central counterparty risk transfer, and securities settlement for both equities and fixed income securities.. It acts as a market operator, clearing house and payments system facilitator. It monitors and enforces compliance with its operating rules, promotes standards of corporate governance among Australia's listed companies and helps to educate retail investors.


Profit After Tax (Source - Company Reports)
 
The company announced its full-year results to 30 June 2015 and there were a number of highlights. Profit after tax was up 3.8% to $ 397.8 million while the underlying profit was up 5.2% to $ 403.2 million. Revenues grew 6.4% to $ 700.7 million and interest and dividend income by 1.8% to $ 71.9 million. Operating expenses were up 4.2% to $ 160.1 million and depreciation and amortisation were up in 14.3% to $ 38.6 million. The impact of fee reductions in the interest rates and electricity futures was $ 17.8 million before tax but this was partly offset by the removal of other rebates. There was a restructuring charge of $ 7.7 million pre-tax to support the technology transformation program and other charges and this will be excluded from the underlying profits when the final dividend is determined.


ASX Operating Revenues (Source - Company Reports)
 
Earnings per share (EPS) grew by 3.8% to 205.7 cents per share and underlying EPS by 5% to 208.4 cents per share. The fully franked final dividend grew by 5.2% to 187.4 cents per share with a final dividend of 95.1 cents per share up 5.8% and the payout ratio was 90% of the underlying profit. Capital expenditure came to $ 44.4 million because of the technology transformation program which is in process and significant investment in the long term position in in a rapidly changing market environment with higher customer engagement and improved delivery, world-class trading and post trading infrastructure and an improved range of products and services.
 
On a divisional basis, the highlights included a 13.9% jump In Listing and Issuer Services revenues to $ 176.6 million because of increased new listing activity which saw a 34.7% increase to 120 IPOs with a total capital raising of $ 88.9 billion. Cash Market revenues increased by 6.7% to $ 125.2 million thanks partly to the 16.9% growth in on market value traded daily. Information Services grew by 7% to $ 73.7 million because of streamlining and the revised fee structure. Technical Services revenue was up 8.3% to $ 57.3 million due to increased data centre utilisation.
 
Our reservations about the stock arise from the fact that investors are expecting a horrible start this week on the exchange after a dreadful last week that wiped out more than $ 4 trillion from the global exchanges. The final week of the reporting season will include biggies like some of Australia's biggest listed companies and results from companies who've already reported have been a mixed bag. We were advised that you exit your investment position and wait till the situation has become clearer and more stable. Accordingly, we recommend that you sell the stock with a view to re-entering the position on more favourable developments.
 

---

 Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people.Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation.Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product.The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.
Copyright
Copyright © 2014 Kalkine Pty Ltd ABN 34 154 808 312. No part of this website, or its content, may be reproduced in any form without the prior consent of Kalkine Pty Ltd.
Kalkine is a trading name of Kalkine Pty Ltd ABN 34 154 808 312, which holds Australian Financial Services Licence No. 425376.