tag:blogger.com,1999:blog-3996218699030196297.post8452502647870126637..comments2023-12-04T18:35:35.755+00:00Comments on KamBlog: Asda takeover of Netto - surprised?Brian Moore (NamNews)http://www.blogger.com/profile/16494526713848361828noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-3996218699030196297.post-87060450304633869432010-05-27T15:55:00.394+01:002010-05-27T15:55:00.394+01:00Thanks for comment, Raphael.
I agree that at 0.8%,...Thanks for comment, Raphael.<br />I agree that at 0.8%, Netto's low margin is driving the price multiple. However, suppose that Asda manages to raise the Netto margin to Asda's margin of 2.8%, then the effective multiple reduces to 37 times, still pretty high, given Asda's relative lack of experience in 'Netto-sized' retail outlets....Brian Moore (NamNews)https://www.blogger.com/profile/16494526713848361828noreply@blogger.comtag:blogger.com,1999:blog-3996218699030196297.post-69425333297015986422010-05-27T15:07:55.977+01:002010-05-27T15:07:55.977+01:00"paying 100 times earnings shows extent of As..."paying 100 times earnings shows extent of Asda's appetite."<br /><br />This does look high and show Asda's appetite but is actually more a reflection of the low operating margins achieved by Netto (less than 1%). The ratio to annual sales, at about 1:1, shows that Asda paid a fair price.Raphael Moreaunoreply@blogger.com