Whilst I am obviously not on the same level as you are with investments, however whilst I respect your initial post I think your second one has gone a bit too far.
"The opportunity has passed for any corporate activity."
- Disagree. Apart from management and John Johnston's stake its all open.
"You need to consider cash balance and inventory blowout against drop in same store sales and significant loss of high margin business to Dyson."
- You would expect inventory to fall from this high level. Inventory was $33m at H1 16. But agree if inventory goes up further from here this would be terrible.
"The business model is broken."
- Business models such as this do not break in 6-12 months. If you bought 7%+ not that long ago than I would think the business model of selling vacuums has not changed much. GFY has lost its way with its product offering, marketing and incentivising staff nothing to do with the business model.
"Close to triggering banking covenants also."
- Unless you know with 100% certainty I would have thought if it was that bad final dividend would have been suspended, although reduced they are still paying
"Risk reward is poor now."
- Time will tell but I do think GFY will NOT go belly up as if push came to shove I believe they would do a small cap raising or John Johnston would make a takeover himself as he and management have a lot of people they put into the IPO and would want to save face
I went past my local GFY store on Saturday expecting it to be empty and I was pleasantly surprised it was busy. Maybe Mr Hardy's early touch is showing early signs of working.
Aggybabe I am with you in shaking management but disagree with your conclusion.
Anyone else have any input into how Mr Hardy's early initiatives are tracking?
GFY Price at posting:
$1.02 Sentiment: Buy Disclosure: Held
