What matters this week: Myer, JB Hi-Fi, Woolworths and more
The tough times continued for Myer this week, with the release of its FY-16 results (for the year ending 30-Jul-16). Headline profit doubled year-on-year. However, on an underlying basis (excluding restructuring, store closures, impairments, etc, which mostly occurred in FY-15) profit fell 11%. The company's transformation program is yet to bear fruit for long-suffering shareholders ...
Without any great surprise, JB Hi-Fi acquired The Good Guys. The price, $870m, was a little less than many market participants expected. Scale benefits (back office, purchasing, etc) are likely to be greater than the $15-20m announced. The deal further consolidates the electronics / appliances retail offering in Australia, following the collapse of Dick Smith.
As the 'Closing Down' ads appear for Masters hardware stores, the legal wrangling between Woolworths and its estranged Masters partner, US-based Lowe's, is deepening. Woolworths has been ordered to produce documents sought by Lowe's, to allow Lowe's to verify that there wasn't a "stitch up” at the board meeting where it was voted to end the joint venture.
The big news from overseas markets is the proposed and colossal (at US$66b) acquisition of Monsanto by Bayer. It would create the world's largest agricultural GM seed and chemical business, and is likely to face significant scrutiny from competition regulators in various countries.