Morgan BellColorado Group Slumps
December 22nd 2006 12:09
Colorado Groups is as colourful as profitable as a fashion retailer. It is being restructured and promises to aim again at the skies. If you get greedy when others are fearful read through.
The news today, 22 December 2006, is that “outdoor outfitter and footwear retailer Colorado Group has warned that earnings before interest and tax will fall by up to 15 per cent, before counting the $9.3 million in costs its private equity takeover has racked up.”
“The profit downgrade could cut EBIT from last year’s $48 million to $27 million when one-offs are taken into account.”
“The past six months have included accepting a takeover offer of $4.70 a share from Affinity Equity Partners in September, the October departure of Colorado’s previous boss, Mel Sutton, who was in the job only four months, and a continuing review of its operations by Boston Consulting Group.”
This news was published in the online version of The Age under the title “$9.3m in takeover costs hit Colorado” and was written by Stuart Washington. Click here to open that page
Colorado Group (ASX: CDO) is being restructured and remains a public company.
Colorado Group offers footwear and apparel brands such as Colorado, Mathers, Williams the Shoeman, Diana Ferrari, Jag and Pairs. It has 342 retail outlets in Australia and 23 under the Palmer Corp flag.
CDO’s capitalization is $383 million, a respectable size for a retail business of its kind.
Its EPS are 38.3 cents from 16.7 cents in 2001 representing a compounded annual growth rate of 18 per cent.
CDO’s current Revenues are $466.2 million, an increase from $323.9 in 2001, and Net Profit is $35.6 million on a margin of 7.6 per cent.
Colorado Group Return on Equity is 28.4 per cent.
Besides than this, debt and interest are negligible while it remains Cash Flow positive which, all together, is great.
The year ended January 2006 though, saw sales revenues falling by 0.6 per cent with NP and EPS also falling. This caused the share price to fall from around $6.50 to today’s $4.00.
Colorado however, is doing something about it: it is reviewing its operations and has named a new chief executive, David Botta, which comes with Jeans West experience.
Currently CDO P/E is 10.4 times, which is its six years average and perhaps represents a fair price.
I would think that when new figures, including the reduction in EBIT mentioned above come out officially, price would fall further.
Being a contrarian, I would be on the look-out for more developments on this wonderful company.
End
The news today, 22 December 2006, is that “outdoor outfitter and footwear retailer Colorado Group has warned that earnings before interest and tax will fall by up to 15 per cent, before counting the $9.3 million in costs its private equity takeover has racked up.”
“The profit downgrade could cut EBIT from last year’s $48 million to $27 million when one-offs are taken into account.”
“The past six months have included accepting a takeover offer of $4.70 a share from Affinity Equity Partners in September, the October departure of Colorado’s previous boss, Mel Sutton, who was in the job only four months, and a continuing review of its operations by Boston Consulting Group.”
This news was published in the online version of The Age under the title “$9.3m in takeover costs hit Colorado” and was written by Stuart Washington. Click here to open that page
Colorado Group (ASX: CDO) is being restructured and remains a public company.
Colorado Group offers footwear and apparel brands such as Colorado, Mathers, Williams the Shoeman, Diana Ferrari, Jag and Pairs. It has 342 retail outlets in Australia and 23 under the Palmer Corp flag.
CDO’s capitalization is $383 million, a respectable size for a retail business of its kind.
Its EPS are 38.3 cents from 16.7 cents in 2001 representing a compounded annual growth rate of 18 per cent.
CDO’s current Revenues are $466.2 million, an increase from $323.9 in 2001, and Net Profit is $35.6 million on a margin of 7.6 per cent.
Colorado Group Return on Equity is 28.4 per cent.
Besides than this, debt and interest are negligible while it remains Cash Flow positive which, all together, is great.
The year ended January 2006 though, saw sales revenues falling by 0.6 per cent with NP and EPS also falling. This caused the share price to fall from around $6.50 to today’s $4.00.
Colorado however, is doing something about it: it is reviewing its operations and has named a new chief executive, David Botta, which comes with Jeans West experience.
Currently CDO P/E is 10.4 times, which is its six years average and perhaps represents a fair price.
I would think that when new figures, including the reduction in EBIT mentioned above come out officially, price would fall further.
Being a contrarian, I would be on the look-out for more developments on this wonderful company.
End
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