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Authoritative Independent Monthly Share Selections Using Technical & Fundamental Analysis

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Poundland - £50m placing to fund takeover of 99p stores

November 2015

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • PLND
  • Price:
  • 286p
The competition and markets authority (CMA) has announced full clearance of the merger with 99p Stores with the CMA acknowledging that there’s a much wider competitor base than it initially thought.Canaccord notes that 99p stores’ sales densities are estimated at around half that of Poundland’s £380 per sq. ft. Assuming this gap will close, both in terms of sales density and their respective EBITDA margins, and also assuming other cost savings, the broker has set a valuation of 398p-465p. It also notes that current three year (FY ’15-’18) pretax profit forecasts of 11% compound annual growth rate (CAGR) will be upgraded to 19% CAGR. The only cloud is recent news that given the longer-than-anticip ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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