Shares in the standalone Woolworths will start trading on Tuesday. It has been a long, drawn out saga but after months of wrangling the demerger of Woolworths is here. Shareholders in Kingfisher, the retail group which includes Comet and B&Q, are expected to approve the demerger today. Shares in the standalone Woolworths will start trading on Tuesday.
For Kingfisher shareholders, who will receive one new Woolworths share for every Kingfisher share held, the decision is whether to dump their new stock. New investors must ponder whether the Wonder of Woolies is worth a punt or to leave the shares languishing on the pick ‘n’ mix counter.After chest-beating talk of a valuation of 30p to 40p a share, the grey market is now indicating a range of 25p to 27p. There are even some valuations of just 22p per share in the market, leaving Woolworths capitalised at just £300m.The buy argument for Woolworths shares is that it has a big sales base, strong brand recognition and a big portfolio of 900 shops. The house brokers are billing it as a recovery opportunity, similar to Asda circa 1992 or even Arcadia last autumn.

On top of this, Woolworths has big market shares in its key sectors including music and video, toys, childrenswear and confectionery.The downside is that it has been poorly managed, with too many senior staff coming and going. In addition, Woolworths has been saddled with £200m of Kingfisher’s debt and a higher rent bill after the sale of 182 freeholds. And then there is the increasing competition from the big supermarkets.The key is earnings growth. Comparisons are weak, with last Christmas being awful and recent overstocking further lowering expectations. Gerald Corbett, Woolworths’ chairman, promises to sort that out, to cut e-commerce losses and rein in the roll-out of Big W, the out-of-town superstore concept.Assuming a demerger price of 26p and current year profits of £53m, the shares will trade on a forward price-earnings ratio of 11, falling to 7 the following year. That looks cheap but there could be a wave of early institutional selling, and with so much recent management turmoil there is a high risk of another cock-up at Christmas. Pick it up cheaper in the New Year sales.Countrywide Assured What housing boom? That was the question posed by Countrywide Assured, the UK’s biggest estate agent and mortgage broker yesterday.

The group has done very nicely, thank you, turning in profits of £27.5m in the half-year to June, up 32 per cent on the same period last year and back on course after a year of turmoil.Christopher Sporborg, the chairman, was quick to point out that, while average house prices were soaring, the number of actual purchases has been running about 8 per cent down on last year. Countrywide made 40,300 sales in the first half, only a few hundred down, and that means the group has been building market share.It has also sorted out the disaster inflicted by the collapse in endowment mortgage sales, many of which have failed to pay off the home loan they were meant to cover. Countrywide doesn’t sell the discredited product anymore, and is making some decent returns from mortgage payment insurance instead. There are also potentially big returns from its new legal advice business, which has gone into the black after last year’s big spending on call centres and software.