LOL no it won't smooth. Howdens doing hunky dory justifies about 95p as Howdens doing well is worth £1bn. UK retail has negative value imo. Has always been a poorly run business and now the retail sector has collapsed. If you look at the BAL, notes to accounts, you will see a very large long-term lease rental liability which means its going to cost 100s of millions to restructure. Its all there in the annual report.
Thing is, people don't think Howdens is doing hunky dory right now. Talk of a slight recovery in house prices is utterly meaningless. What matters is the volume of transactions as Howdens sells new kitchens to buyers in the secondary market. Transactions fell off a cliff some time ago and I think it unlikely things have improved. On the contrary, higher prices means fewer transactions if anything imo.
So that is why MFI is at 78p. If Howdens is really suffering a downturn due to a collapse in housing transactions, this company could easily go bust. If Howdens is still doing well as before, then the case for being short is weakened. Not eliminated due to cost of restructuring UK retail, but it would make being short MFI a quite risky position.
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