I am looking forward to the results as well. Here is an update on my forecasts. I am no analyst so please DYOR.
The biggest impacts on NPAT are: a) Sales: Year End 2019: 172m Year End 2020: 192m Year End 2021 Estimate assuming 20% growth on year end 2019 (172m) in H2 20 throughout 2021 : 206million Growth factors: availability of stock (hopefully this is sorted as Dec was a bumper month), consumer trend to staying at home & renovating, direct selling online.
b) The gross margin: - CY16/17 when AUD/USD was around 77c it was 42.3% - CY18 when AUD/USD was around 74c it was 39.4% - CY19 when AUD/USD was around 70c it was 39.1% - CY20 when AUD/USD was around 70c it was TBC when results are out CY 21 estimate based on AUD/USD on 75c-77c will give us a higher margin which will be a big boost to the bottom line/NPAT
c) Costs: - Lower rent as moving showrooms/offices - Lower marketing costs with Fat duck $1mill These should add $1.2mill to NPAT
Company will have made around 10-13million NPAT since last results to give out as a dividend/reinvest. Strip this off the current m.cap and you have a m.cap at present of 90million at the share price of $1.05 with 95million shares in issue.
Estimated NPAT for 2021 between $9 to 14 million (actual figure will depend on sales & margin). Typically the company has traded on a NPAT x 10 valuation. Given lower interest rates I expect this to change to NPAT x 12 valuation. So the valuation could be anywhere from $108 million to $168million. 20-90% growth potential on the share price. Interesting year ahead shareholders
SHM Price at posting:
$1.04 Sentiment: Buy Disclosure: Held
