Solomon Lew remains as enigmatic as ever over whether he plans to sell or demerge Premier assets to realise even better returns for shareholders, writes Sue Mitchell.
it will probably have 29 per cent by the AGM, in which case it would be entitled to a second board seat.Premier also has $401 million of net cash and property assets worth $72 million, including its Melbourne head office and national distribution centre.
Macquarie’s sum-of-the parts valuation is $30.50 a share, 15 per cent higher than Premier’s current price of $25.95. Macquarie values Peter Alexander at $1.67 billion, or 15 times EBIT, and Smiggle at $1.15 billion, or 13 times EBIT, reflecting their superior growth potential. Macquarie values Premier’s five remaining brands at just $850 million, or 7.9 times EBIT, reflecting the more mature nature of these brands.
Smiggle was hard hit by the pandemic and has yet to reach Premier’s $450 million sales target, but sales have rebounded strongly this year as children return to face-to-face learning. At the moment, we’re focused just on maximising the outcome for our current brands, but could it be [an online marketplace]?” Maybe.Murray says the multi-brand site will enable Premier to leverage foot traffic, optimise promotions to improve gross margins, develop loyalty programs and look at wider cross-border opportunities with Peter Alexander’s new e-commerce partner.
Despite the strong January-half performance and promising start to the July half, which led to a string of upgrades, Premier shares are trading 10 per cent below their level this time last year, reflecting concerns about the looming squeeze on discretionary spending and the impact on Premier’s earnings.MST Marquee analyst Craig Woolford’s sum-of-the parts valuation of $25.62 values Premier at nine times forecast 2023 EBIT and 9.5 times 2024 forecasts, but his 12-month target price is $23.00.
“I don’t look at it from that perspective, I look at it from our performance,” Lew said. “The market at some point in time will rate our performance.”
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