The thing that bugs me about GNC is the Board / Management target for what it refers to as "through-the-cycle" EBITDA. In spite of the extraordinary 2022 results ($703m EBITDA) and the forecast for a very strong 2023 result (approx $500m EBITDA) there has been no revision to this target.
I understand that we have had very favourable weather that has led to bumper crops and that drought at some stage is inevitable, but GNC has retained a significant proportion of these extraordinary earnings - in FY2022, only around 76c of the approx $3.10 / share EBITDA (which eventuated in an approx $1.70 / share profit) - was returned to shareholders by way of dividend + extraordinary dividend + share buyback. This left a significant amount of cash in the company with which it could build infrastructure / make investments / improve processes etc ...
Given this windfall for spending on such initiatives, I believe the Board should be increasing its through-the-cycle EBITDA target. Not doing so sends the message that the company can pat itself on the back in future years based on relatively modest achievements.
Was anyone at the AGM? And if so, was this issue raised?
Also, does anyone know if the AGM presentations / shareholder questions were recorded and available to view? TIA.
GNC Price at posting:
$7.60 Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)