RE:Cash on handFair point, Northforce - the cash figure can't be viewed in isolation.
I recalled seeing something about Reitman's resilience in previous downturns - this is extracted from January's Donville-Kent report.
"The fact that Reitmans has been in business for almost 100 years offers some insight into relative performance during economic slowdowns. For example, during the economic downturn in Canada in 2002, Reitmans had their best retail operating results in their history. They have resilience due to the fact that their banners are perceived as “value stores” versus leisure, luxury, or specialty. In 2008, during the financial crisis, Reitmans’ total revenue declined 0.6% and they maintained 8.2% profit margins ($86m in profits). As the recession continued into 2009, Reitmans’ revenue increased 0.5% with 6.4% net margins ($67m in profits)."
Beyond that, the timing of todays sharp downturn appears a little odd to me - perhaps a delayed reaction to last weeks results. Maybe it's a case of virtually no buyers for the relatively small number of sellers.
My own take contines to be that there's good intrinsic value here - with the biggest "risk" being the Reitman family's apparent lack of incentive to do anything ( such as a TSX uplisting ) that might help to unlock it.
Harry