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DDR

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galumay:
Refer to this thread for earlier posts on DDR,

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2016 AR.

DDR seem to have bedded down the acquisitions quite nicely, debt continues to be the biggest issue, although most of it is just the receivables facility it still means interest coverage is only about 8. Hopefully improved capital management will see this situation improve over time.

My range of intrinsic value increased slightly, disregarding the outliers its in the range of $2.50-$2.80
Earnings growth is running at over 10% and if they can maintain similar with no further rollups I will be happy.

FY 2017 results - Another good FY for DDR, Revenue up 10%, profit up 5%. The new building will start to impact on costs over the next couple of years, so could be a bit soft for a while. My IV range is from $2.80-$3.10 so a slight increase this year. The level of debt, particularly the receivables facility continues to be my biggest concern and I wish they would reduce dividends to pay it down, but I think they are going the other way and increasing it if anything.

FY 2018 results - Another great year for DDR, Range of IV increases to $2.60-$3.70. Comments from last year relevant still. Also drop in FCF due to increased inventory and changes in payables. Debt up 15%.

price taker, no moat really. Although potentially a bit of network effect because of connecting fragmented suppliers with fragmented retailers.

Why will this business be around in 10 years? - People will still be buying IT equipment, DDR have been selling it for over 40 years. Lindy effect.

galumay:
FY 2020 -DDR just keeps going from strength to strength.

galumay:
H1 2021, a good result for DDR, which it had to be given how much growth is baked into the current share price - around 9% by my calculations. FCF improved quite a bit this half which is encouraging.

galumay:
Full year 2021 results for DDR looked good on the headline profit, but the big drop in FCF tells the story of the challenges that have faced the business in the last 12 months. As always my main concern with DDR is the excessive debt they carry in order to maintain the very high divvies for Davey's race car project in NZ. Really cant complain, it just keeps growing revenue, profit and divvies, year after year. Its been one of my best positions for many years.

galumay:
DDR suffering pretty severe margin compression so needing to grow revenue hard just to stand still on earnings. Will need to watch carefully especially with the amount of debt it carries.

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