Make millions - get yourself down to the pub!
Discussion
burwoodman said:
Dixons Revenue £8 billion
Dixons EBIT 120M
Dixons cash generated from operations( 260M)
Dixon debt to earnings ratio (2X or 2 years to clear their debt) the lower the better
Price to earning 13X
Market valuation 1.8B
AO Revenue £300M
AO EBIT £7M
Price to earnings 180
Market valuation 1.5B
AO debt to earnings 6X.
Dixons is also growing it's online business 56% faster than AO. Net margins are almost identical despite Dixons operating a vast bricks and mortar business.
Dixons prices are on average 3% lower like for like.
Something else to consider-the total market for appliances is 3.2B. Even if AO managed to secure 100% of the market which is impossible their after tax earnings would be no more than £39M giving them a PE 38 which is still 3X dixons. It isn't as though they can expand margins-in retail they are ever decreasing and they already operate at the lowest point of the curve.
The only thing 'missing' are the brains of people buying this dog.
Whilst I completely agree with what you're saying - didn't people say the same thing about Facebook?Dixons EBIT 120M
Dixons cash generated from operations( 260M)
Dixon debt to earnings ratio (2X or 2 years to clear their debt) the lower the better
Price to earning 13X
Market valuation 1.8B
AO Revenue £300M
AO EBIT £7M
Price to earnings 180
Market valuation 1.5B
AO debt to earnings 6X.
Dixons is also growing it's online business 56% faster than AO. Net margins are almost identical despite Dixons operating a vast bricks and mortar business.
Dixons prices are on average 3% lower like for like.
Something else to consider-the total market for appliances is 3.2B. Even if AO managed to secure 100% of the market which is impossible their after tax earnings would be no more than £39M giving them a PE 38 which is still 3X dixons. It isn't as though they can expand margins-in retail they are ever decreasing and they already operate at the lowest point of the curve.
The only thing 'missing' are the brains of people buying this dog.
Edited by burwoodman on Thursday 6th March 15:36
I'm not buying AO but I'm wondering whether that's just because I'm not clever enough to understand.
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