Oh the silly day traders. As Premier Investment shares languished around $12.45 and down more 3% for the day, out came a statement from the company at 1.42pm requesting Myer’s full shareholder register.
Mr Lew is the largest shareholder in Myer following a raid earlier this year that saw him snap up just over 10% and up to yesterday morning he was wearing losses of more than $40 million on his adventure.
And he was upset to say the least lambasting Myer’s performance on Monday in the wake of Premier’s less convincing 2016-17 results and a nasty 4% plus slump on Tuesday as his criticism seemed to backfire.
Premier shares fell another 3.2% in trading yesterday before the statement requesting the Myer register was released, and the silly day traders sniffed and said, ‘bid looms’ and pushed Myer shares up 10% at one stage and trimmed the losses on Premier shares to less than 2%.
By the close Myer shares had eased a touch but were up by 6.9% to 77.5 cents, still a long way from the $1.14 a share that Premier paid in its March raid. Premier shares ended down 1.95% at $12.58.
In the statement to the ASX, Premier said it wanted the register so it could “consider" writing to Myer shareholders ahead of "any resolutions proposed at Myer’s AGM this year".
One of the significant items for consideration at the November AGM will be the election of Garry Hounsell to the company’s board as deputy chairman.
Myer chairman Paul McClintock announced last week that Mr Hounsell would take the post with the intention of taking over as chairman when Mr McClintock stepped down. Mr McClintock had previously indicated he would not be standing for re-election
But Mr McClintock himself will also have to seek re-election at the meeting under the transition plan outlined by the company. It’s likely Premier will try and overturn one of these resolutions at the AGM to register a protest.
But the real story from Premier isn’t the performance of Myer, it’s the weak second half performance of many of Premier’s chains (but not the fast growing Smiggle and Peter Alexander).
If you look closely at Premier’s 2016-17 result you find that the key retailing measure – same store sales – (that is, sales growth compared year to year or quarter to quarter on the same number of stores to take out the usually positive impact of opening more sores on sales growth).
At the half year they were up a reasonable 2.1%, but by July 31 they had slumped to just 1.1% growth.
And overall sales were up 3.98% in the year to $1.1 billion, almost half the first six months growth of 7.1%. And underlying earnings before interest and tax rose 7.3%, down from a rise of 10.6% in the first half. It was a weak second half (and strangely no warning of that unlike the first half where Premier issued an update in early February and before releasing the results several weeks later)
From the sales and profit figures it is clear that had not been for the strong growth here and offshore of the Smiggle and Peter Alexander chains, Premier’s overall sales and profits would have fallen or shown little or no growth.
That, not the underperformance of Myer and his opportunistic grab for 10% of Myer, is Mr Lew’s real headache. Myer’s share price fall and poor 2016-17 performance is a diversion.
