Sports Direct Share Discussion Threads

[philanderer] 14/7/2016 14:12

It`s Peel Hunt, today reiterating their 'sell' and cutting their target price from 300p to 200p

[alex1621] 14/7/2016 14:04

It is cheap, but also factor in consumer confidence slump and lack of currency hedge for next year ... I will wait. The concern is that sentiment and poor UK economic stats in the near future push it down further ... and Ashley steps in to steal it below my entry buy.

[deanroberthunt] 14/7/2016 12:00

it's silly cheap on any metric you choose to use however.

[deanroberthunt] 14/7/2016 11:42

would he consider a special dividend? ...probably not

[dlku] 14/7/2016 11:41

pound has been firmer but price off which is odd

[deanroberthunt] 14/7/2016 11:36

3 main issues:

1. Owner and it's practices are disliked by the establishment
2. No dividend
3. No chance of M&A other than by Ashley himself

[wallywoo] 14/7/2016 10:08

Think this is reaching the bottom now, may have a dip first (shares always oversell before bouncing back). I stated a few months back that SPD need to pay a dividend and have a divi policy to be valued by the market. That still needs to happen and SPD can more than afford to, IMO

[undervaluedassets] 14/7/2016 09:43

Approaching 1-1 book value.

(And net tangible asset value has grown like topsy over the years not shrunk)

This company owns many valuable assets.

Very very rare for a retailer to approach 1-1 NTAV

Next trade on 22 times NTAV !

[philo124] 14/7/2016 09:38

Stock in store plentiful, very good range, quite busy sunday and yesterday, more staff in store than usual.
Undervalued.

[deanroberthunt] 14/7/2016 09:30

next leg down, where's the bottom?

[discodave4] 13/7/2016 16:42

Hello rhyming slang, had a bad day by the looks of it. :(Cheer up.DD

[deanroberthunt] 13/7/2016 15:24

at this rate he could take this private for 2 squid a share

[weemonkey] 13/7/2016 14:12

Investors would certainly appear to be determined to gift him the company with their endless selling of what is a highly successful outfit.

Bizarre

[discodave4] 13/7/2016 10:12

"No current intention"

[zoolook] 13/7/2016 10:07

How so? What has happened in the last 8 days since the results statement which included this:

"In response to repeated press speculation about his intentions with regards to his shareholding in Sports Direct, Mike Ashley has confirmed to the board of directors that he has no current intention of taking the Company private, and has indicated his willingness for the Company to confirm this statement publicly."

[discodave4] 13/7/2016 09:19

Thought you said buyback was good idea using cash on the books, now your saying it's better they increase debt to fund it!.The buyback ain't going to happen, going private is more likely IMV.DD

[weemonkey] 13/7/2016 09:05

If your share price is low enough and your business is strong enough even borrowing money to buy back your own stock can be the right thing to do.

It is like buying out your business partner on the cheap.

Loads of companies do this (much more in the states)

[oggyrocks] 12/7/2016 19:42

Sterling had a good day vrs dollar and euro.Maybe not as bad as we expected.

[discodave4] 12/7/2016 17:59

weemonkey - 12 Jul 2016 - 10:59 - 2025 of 2031 - 0buy-back looks like a good idea considering cash position.I've not mentioned anything about their acquisitions. Thought you were saying that the buy-back would be funded by their cash - I'm trying to find out what cash you mean?.The buy-back is a smokescreen, similarly like reintroducing a dividend is under review.......keeps the market and pi's happy I suppose.DDPS How cheap is their debt now that MA is not giving them preferential rates via MALF?, be interested to know as MALF was 50% cheaper than their RCF!.

[weemonkey] 12/7/2016 14:27

They have bought assets cheaply haven't they. That is why the debt has gone up. And yes they have bought assets with debt rather than cash - a very rational thing to do in a low interest environment.

That is how the richer get richer - buying assets on the cheap with borrowed money at extremely low interest rates

Purchase of Heatons in particular means SPD now have scale and presence in Ireland where they did not before.

Plus in Ireland they do not have the Guardian or the House of Commons breathing down their necks and they get more Euro income as well. Good news.

[discodave4] 12/7/2016 13:55

"So cash has gone from 78 million to 233 million in a year"Because they have increased borrowings to £267m and not paid down debt (£347m 2015, only £71m 2016).DD

[discodave4] 12/7/2016 13:48

Apologies, I must be missing something. At year end Net Debt, not cash.Net cash inflow from operating activities was down from £237m to £66m.Are you saying the share buyback to be paid from drawing down (even more) their revolving credit facility/borrowings/debt?.DD

[weemonkey] 12/7/2016 13:11

And ...

"Net debt increased by GBP39.9m from GBP59.7m at 26 April 2015 to GBP99.6m at 24 April 2016.

The analysis of debt at 24 April 2016 was as follows:


At 24 April At 26 April
2016 2015
(GBPm) (GBPm)
Cash and cash equivalents 233.7 78.3
Borrowings (333.4) (138.0)

Net debt (99.6) (59.7)
=========================== ============ ============

So cash has gone from 78 million to 233 million in a year

Yes there are some borrowing but these are not huge for a company of this scale (minute in fact)

Whilst the opportunity to buy assets cheaply exists you buy them using borrowed money and keep cash in you account for flexibility - this is just common sense business practice.

This is how the the strong survive (and thrive) in recessions - by buying up the weak while they are on sale with cheap borrowed money and keeping cash on the books .

I have read the prelim results from first to last ( I always do)

[weemonkey] 12/7/2016 13:06

has taken on some debt to fund aquisitions which is exactly the right thing to to do and which has still left the cash position strong.

"The Group generated underlying free cash flow during the year of GBP309.1m, up from GBP301.8m in the prior year, and net debt increased by GBP39.9m to GBP99.6m at year end as a result of investment in inventory, freehold property and the acquisition of Heatons. Net debt currently stands at 0.31 times reported EBITDA (26 April 2015: 0.16 times)."