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(DEB) Debenhams share chat

Discussion in 'General Share Chat' started by Steamy, Nov 6, 2015.

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  1. ShortTracker

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  3. Mongoose82

    Mongoose82 A Legendary Member

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    Beaufort note out this morning... https://www.research-tree.com/company/GB00B126KH97

    "Debenhams performed poorly in the 41 weeks to 11th June 2016. The company witnessed weak growth in the transaction value amid difficult trading conditions in the UK. Debenhams remained focussed on cost management and expects costs to be in the lower range of its guidance. The company recorded solid online sales growth of 9.1% for the year to date. International online sales continued to grow well, supported by its new web platform. The company continued with the roll-out of new food concessions, with an additional 30 offers in place by October. Nonetheless, the trading environment for clothing remains challenging. Moreover, Debenhams lowering the gross margin for the year is disappointing news."
     
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  14. Walter @ WalbrockResearch

    Walter @ WalbrockResearch Member

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    Brief

    Debenhams knows how to run a department store since they have been doing it for over 200 years.

    When they got relisted in 2006, the shares took a hammering as they lost close to 80% of its value, before recovering slightly, but still down by 70%.

    Risk with high dividend yield

    Some would say a company with a high dividend yield poses a risk because there can be structural and operational issues where rivals are dominating its space. Then there are financial issues involving too much debt.

    Combine the two, and you will get a business with high levels of debt and crashing profits numbers and no cash in the bank, then there is a high risk of collapse!

    Debenhams not in that category of a high-risk, high-yielding business, yet!

    But, Debenhams reduced its total debt from £1.9bn to £330m. Also, debt to net earnings is less than 4 times with net interest cover close to 9 times.

    Cash earnings remains consistently the same at around £200m+ whereas operating profits declined by 67% since 2006.

    According to 13 market metrics, it suggests undervaluation of Debenhams shares is 45% when taking into account the 10-year historical averages of these metrics.

    For much more read the article here: http://bit.ly/2mjTTdz
     
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