We do not see SPD as purely the Mike Ashley show, though he is very important to the business we do believe that his key subordinates are very capable and competent.
There is potential for a significant role out in europe, but this has been true for a while and not really delivered.
The management team probably fully intend to ignore good corporate governance. This provides both significant downside risk as to pay and remuneration. It also brings in significant upside/downside in that they are not afraid to do deals they think will work regardless of trying to fit it into a strategic rationale. If it works they are heroes, fails they kill the share price.
All of that said we have been doing various NPV/DCF models and believe that a fair price is probably between 550p and 850p. This is clearly a very broad range but this reflects the rather unique way SPD operates. All forecasting has to be recognised as inaccurate and in the case of SPD there exists significant potential for radical change in the short term. On balance we think a price in excess of 700p is more likely to be a sensible reflection of future figures than the current price of circa 580p. We therefore see a price of 550p a significant buy opportunity and a price of 850p a significant sell. We will be considering adding to SPD at current prices.