By Jason Fittler
Myer is the first large blue chip float to lead the Australian market out of this Bear market.
It is always a risk to be the first but the offering from Myer is one to pay attention to. This is a turn around story, but the kicker is that most of the hard work has already been done.
By 2012 this company will be completely transformed. With a new culture and the systems and service to back it up, I expect to see Myer regain market share.
Myer has 65 stores around Australia this will expand to 80 in the near term, with a store in Townsville due to open in 2012.
Annual sales of $3.3 billion and 3.1 million customers in their loyalty program. It is this loyalty program customer which they base their marketing and sales around.
Myers have positioned themselves between the discount department store and the iconic David Jones. As we move into tough times in the average Australian household I expect to see more shoppers look to Myer to maintain the quality of their lifestyle at a lower cost.
The IPO was completed through a book build putting the price somewhere between $3.90 and $4.90 putting the stock on a dividend of between 5.3% to 4.3% fully franked and a PE between 14-17 times. The sell down was for 70% of the existing shares in the company, management and staff would own around 15%, the remaining stock was offered to Myer 1 card holders and firm stock through brokers. There was no offer to the general public.
I do not expect to see the price of this stock rocket off, however, they certainly are set to produce good results in the coming years and the share price should improve in line with their performance. This in my book is a good blue chip stock which will prove sound income and growth over the long term.
The stock will begin trading on the 11th of November 2009, I for one will be keeping a close eye on how they trade and look to buy.
If you would like more information on Myer please call me on 07 4771 4577.