Myer Holdings Limited (MYR)

  By Jason Fittler

Myer Holdings Limited (MYR) operates a chain of department stores.

MYR has a national network of 67 stores in Australia including MYR retails designer, national, and international fashion and apparel for men, women, and children, and operates a consumer loyalty program.

MYR focuses on its retail presence and execution, with a mix of house brand and leased retail space areas.

Myers released their first half results this week with the headline figures being sales up 1.7 percent, operating profits up 2.3percent, net profit up 0.7% to $87.9 Million and an interim dividend of $0.10 fully franked.

The CEO Bernie Brookes said that the business had delivered a solid first half result regardless of the ongoing challenging retail environment, which demonstrates that their five-point strategy is working. 

The strong cash flow provides surplus funds to reduce the overall debt down $56million to $242 million.

They continue to focus on inventory management, achieving a 6.3 percent decrease in inventory held. This will go towards strengthening the balance sheet to ensure future capital requirements and meet.

Although favorable results and a hint that things are improving in the retail sector Myers has the bigger threat of online stores.

We are starting to see large international brands such as Zara starting to open showcase stores in Australia to help drive online sales. Myers does not seem to be competitive in this sector yet.

The dividend is sitting at 6% fully franked giving it a gross yield of 8.5% making the company a yield play.

The price has moved up to $3.11 it’s highest levels since May 2011, I am cautious to buy at these prices but the result and yield is compelling.

For more information on Myer Holdings Limited (MYR) please contact us on 07 4771 4577.