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Saw a one-line tweet the other day mentioning McColls #MCLS as one of 2 highest conviction names.
I think I see why: there's a metamorphosis happening underneath and reasonable path to PE and FCF multiples between 2-3 plus a growth narrative, all under that lovely grim exterior
I think I see why: there's a metamorphosis happening underneath and reasonable path to PE and FCF multiples between 2-3 plus a growth narrative, all under that lovely grim exterior
Story is that they're shrinking. 1500+ stores 2 years back, to 1050 by the end of FY21
Also changing: culling small newsagent shops to focus towards larger, more profitable grocery-heavy stores. So far, so worthy - but the real interest is the transformation into Morrisons Daily
Also changing: culling small newsagent shops to focus towards larger, more profitable grocery-heavy stores. So far, so worthy - but the real interest is the transformation into Morrisons Daily
Company raised recently to accelerate a programme converting 350 stores into these Mini Morrisons. They're at 56 today, will be 350 by end FY22
Cost is £90K per shop, what they call "cash payback" is 2-3 years and so far they're providing pretty immediate LFL sales growth of 25%
Cost is £90K per shop, what they call "cash payback" is 2-3 years and so far they're providing pretty immediate LFL sales growth of 25%
New CEO. Stepped up at his request to resolve issue of complexity (leverage) & out of control overhead. Parred back costs a lot (sacked most board, ripped out costs) & unwinding complexity and leverage. NAV last reported 168p. His option package kicks in in NAV growth
CEO been buying stock around here. Circa £500k. Everyone hates. My kind of name. Think should trade 50% up and then we see how he goes. Should be private. Suspect it will be
Expect massive churn at #MCLS given size of raise but board bought, market looks backwards & I think it’s a buy. Now got capital to accelerate facia rollout - IF next 100 stores show same lfl uplift as first 65 (3 year payback) then mkt will rerate in anticipation of same
cash per store uplift from targeted 800 off 1150 in estate. @research_tree carries good notes. My maths (dyor) is eps 11p to give pe 1.7 - lots like #GMS (I am long too) but on execution of day rates it’s still levered (very) has refinancing risk & is
Middle East ! This is U.K., would be modestly levered by that stage - 800 stores revamped. Should it be cheap - for sure but Tesco trades 12* leases / debt but leader so why not 4 * pe here. Worth doing the home work here. At some stage the low pe rocket brigade will arrive 😂
