Valuation, page-38

I topped up my holdings purchasing 4300 shares at 3.93 Aud today. I had been holding back for a while and decided it was good value under 4 dollars.

Reading the comments on here you can see why it is falling, some people make it sound like the company is collapsing. What would have been more concerning would have been a fall in retail revenues due to the threat of online shopping. Part of the costs like the cat food issue was not news to me as I remember when it came out last year I thought that it might affect GXL's profit a little. They still are applying to get refunds from the supplier (I think it is US based company).

Another reason partly for GXL's fall has been its fall from darling of the stock market compared to 2-3 years ago. Debt has seemed a little on the high side for a while. They have still been quite aggressive rolling out the in store vets. I would assume this program will still continue but maybe at a slower rate and also purchasing up other assets will be limited for the next year or 2.

I think if they even just started paying down the debt 10-15 million AUD per year which is only about 25% of their profits then it would leave maybe 10 million AUD for adding the odd asset or continue adding in store vets.
As the company should equal or be very close to its profit compared to FY 17, I cannot see why they cannot hold the dividend at 10 cents per share. (Which makes the yield very attractive now)

Another thing to consider even if without investing money (from now on-wards) on expanding the business. The company should increase revenues for at least the next 24 months with what has been invested up to now as the in-store vets mature.

And finally sentiment is negative currently but if one takes the long term view (5+ years) of holding this company they will do well.