David Roberts

 David Williams Essay

ASB INVESTMENT RESEARCH

Made by: Marc Hemsin – 3386122 Juthakarn Jessica Suwanasilp – 3344346 Tu Lan – 3282178 Bo Qiu -- 3308317

DAVID JONES -- BUSINESS RESEARCH AND VALUE

May 2012

ASB INVESTMENT RESEARCH

T A W L E O F CONTENT MATERIAL

1 . BUSINESS SUMMARY installment payments on your DAVID JONES' PROSPECT PLUS THE RETAIL INDUSTRY 2 . one particular INDUSTRY EXAMINATION 2 . a couple of COMPANY EVALUATION 3. ACCOUNTING AND ECONOMIC ANALYSIS three or more. 1 ACCOUNTING ANALYSIS three or more. 2 ECONOMIC ANALYSIS 5. FORECAST AND VALUATIONS some. 1 OUTLOOK ASSUMPTIONS four. 2 COST OF CAPITAL – WACC four. 3 VALUE OF DAVID JONES your five. CONCLUSION 6. REFERENCES AND APPENDIX

ASB INVESTMENT STUDY

1 . EXEC SUMMARY

DAVID JONES LIMITED - DJS

Recommendation

Value $2. 20 Last Selling price $2. 25

52 Week Range four. 35 -- 2 . of sixteen Market Limit $1, 216 M

Industry group Price tag Business risk High

CARRY

David Roberts is a leading upmarket retail department store with 37 shops throughout Australia and specialises in top quality brands of apparel, cosmetics and homewares. Is actually only significant competitor, Myer, has focused its position inside the retail market and provides kept pressure on David Jones. David Jones' competitive strategy relies on its item differentiation through exclusive brand names supply agreement, customer dedication and status. However , the organization and the full industry are currently suffering and can remain in upcoming years from online

Solid Buy

Purchase $1. 85

Hold $2. 75

Promote $3. 10

Strong Offer

$1. 70

competition, a decline in consumer emotion and poor economic conditions. In addition , the expiry in the contract with American Exhibit credit cards in FY14 is usually forecasted to cause a serious fall to its income. Consequently, David Jones would need to prepare for the difficult conditions ahead by simply focusing on cost-cutting and investing capital in alternative buying channel such as the web-store. The financial evaluation reveals that David Roberts has partially become less liquid and fewer working capital useful since inventory turnover provides decreased and would have difficulties paying all their debts at a later date assuming the weak selling condition carries on. Although Myer's sales statistics are higher, David Smith has been the better performer with respect to Net Earnings Margin, demonstrating that they are even more cost efficient. The accounting analysis reveals similarities between David Jones and Myer's accounting policies although no concrete evidence of making manipulation from management. Each of our valuation quotes David Jones' intrinsic benefit at $2. 20. A bad sales expansion is forecasted in the presumptions to reflect the demanding prospects with the retail industry. As of the 30th of May, the current price of David Roberts closed by $2. twenty-five. ASB Purchase Research suggests a HOLD position for this share price.

ASB EXPENSE RESEARCH

2 . DAVID JONES' PROSPECT AND THE RETAIL SECTOR

2 . 1 I N D U S Capital t R Sumado a A D A D Y H I S i9000

The selling industry is not a perfect light in the Australian overall economy over the past several years as it faces some of the worst trading circumstances in 5 decades (Hutton, 2012). As proven from the graph below, shops, the clothing section and the footwear section have been completely suffering a decline of 6% as FY09 unlike steady growth in volume across the remaining retail sectors (Bald, 2012). According to the Australian Bureau of Statistics, February retail trade figures showed department stores skilled a year-on-year decrease of installment payments on your 8% while the clothing and retail sector took a 2% drop and even household goods declined by zero. 5% (ABS, Retail Characters, 2012). This Porter's Five Forces style highlights the latest competitive strength and the charm of the mall retail market. Existing opponents such as Myer and growth of online retail from international

Products can be seen in other less expensive stores and online

Competitive Rivalry

Average Threat of Entrants

Risk of Alternatives Very High Market Attractiveness

1st mover...

Referrals: 2 . 1 I In D U S T R Y A D A M Y S i9000 I S i9000

The retail industry is actually not a perfect light in the Australian economy over the past several years as it confronts some of the most detrimental trading circumstances in 5 decades (Hutton, 2012)

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