"Having a much higher cost base is going to be a challenge to manage going forward, especially if we head into a softer sales environment"
Somewhat agree. The $32m underlying EBIT which excludes additional DC costs does suggest higher operating costs in general. Management estimate another $14-16m EBIT from VIC/NSW store closures, so let's call it $45m EBIT so far. Add another ~$3.2m for Focus (estimated $12m EBIT annualised in previous ann) and you're at $48.2m EBIT
1H/2H split are not hugely different, but 2H usually performs better (thanks @hankreardon). Call them even, you're at $96.4m EBIT. MC ~$550m, with $90m net debt. EV = $640m
Even if you scrape 10% off my EBIT figure, you're still at $87.5m EBIT. EV/EBIT = 7.3x
Compared to FY21, yes it's not performing as well. But I need it to perform well relative to the price I'm paying.
ADH Price at posting:
$3.13 Sentiment: Buy Disclosure: Held
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