The Evil Diaries: “It stinks”

Sherlock may have been instructed not to offer shit but the fact is that dogs do not understand this basic order and, instead, deposit their doings all over the place. As a result, dog owners – in London at any rate – are obliged to scoop up the deposit and get rid of it appropriately. I do not envy them even though they are suffering from a self-inflicted obligation. And the point is that five or so years ago the deposits in question would tend to be liquid since, as a general rule, dogs were given canned food which gives rise to this result. Then the scoop laws in practice became stiffer and, as a result, dog owners found that they prefer to feed their dogs a dry food which tends to give distinctly more readily handled turds. The margin on dry dog food is 50% of sales whereas canned dog food is 5%. So one can see why Pets At Home (PETS) could be prepared for flotation.

I would prefer to get over the problem by summarily executing all dogs but accept that many fellow citizens will just go on buying dry dog food. As a result margins will come down as competition hots up. It’s another reason for shorting PETS.

Also, the balance sheet of PETS is thin air. Once one writes off intangibles, it adds up to minus £160m and debt stands at £315m. This is a bankers’ creation capitalised at 277p at an astounding £1.37bn. It stinks.

*****

I have never understood the stock market success of Majestic Wine (MJW). So it might be best if I were to conceal my ignorance. However, it is clear that not even the six bottle case is bringing in the punters on a sufficient scale. Worse, Aldi and Lidl are carving right into Majestic’s core business. Get out while you can. It is now 425p.

*****

Daniel Stewart (DAN) warned yesterday that they do not understand why the share price had got up to where it had (it’s not much lower now at 3.5p) and that a fund-raising would probably be done at a rather lower price. As far as I can guess at what is going on it is our old friend Rob Terry hard at work.

*****

Finally, a couple of pals of decades’ standing have decided gold is going up. Amazingly, their chosen vehicle is Petropavlovsk (POG) now 7.25p. Faites vos jeux.