Good morning, it's Paul here!

I'm up early today, so thought I'd start with some brief comments on a couple of interesting company updates from yesterday, that Graham missed due to focusing on a macro ramble instead.

Estimated time of completion:  3pm

Update at 14:46 - today's report is now finished.

Sports Direct

Name change - it's now to be called Frasers.  We saw a staggering rise in share price this week, to about 470p. That means if has more than doubled since the low of about 220p just 5 months ago. Whoever said that elephants don't gallop, was wrong!

The narrative with its interim results was interesting. A bit like Tim Martin of 'spoons, Mad Mike Ashley obviously revels in his outspoken, unorthodox way of doing things. Both are brilliant & talented entrepreneurs, so personally I think they've earned their stripes, and should continue saying whatever they like, in whatever style they like.

The one thing that does irk me, is that Ashley gave the impression from previous trading updates, that buying House of Fraser had been a terrible mistake, indeed he even referred to its problems as "terminal". Therefore, investors assumed that this was bad news for the company & its shares. Along with a catalogue of other bad buys - such as Debenhams (where he lost out to hedge funds, and has choice words to say about that too!), Goals Soccer Centres, and other sometimes rather stupid mistakes.

The latest update this week, seems to be now talking up House of Frasers somewhat, with green shoots and being integrated into the larger business, in IT, supply chain, etc.  Changing the group name to "Frasers" does rather suggest that House of Fraser is now an important part of the group's future.

Narrative matters, but it's the numbers which matter more. There's an updated broker note on Research Tree, which I'm looking at, showing huge increases in forecasts - e.g. 43% increase in current year EPS, and EPS for next year going up from 19.3p to 30.3p, up 57%.

These are extraordinary forecast increases, for a mainstream retailer of this size. Therefore the dramatic re-rating in share price looks fully justified to me.


Share price:  75p (up 3% yesterday, at market close)
No. shares:  97.2m
Market cap:  £72.9m

Interim results 

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