Ann: DSK FY23 Announcement, page-23

Good to see DSK hit the revised May guidance (top & bottom line).

The trading update was disappointing on the surface - bigger than most others - driving selloff.

Though the conversion to dollar impact can be recovered given that Jul/Aug are quiet times.

On the call mgt alluded to PY new product launch skewing numbers so maybe a possibility of improvement into the critical xmas period (maybe?).

But if the negative trend continues then expect a poor FY24.

Ultimately the play for most investors is for normalised FY25 and beyond.

It can go lower depending on FY24 but pricing now is attractive on a MT horizon IMO ($40m odd EV).

And decent net cash position (with additional support if necessary) will see it through any difficult periods.

I also like the signalling effect of maintaining the divi.

It's good to see store rollout in AU continuing and stopping in NZ.

NZ was good for logistic learnings but prefer focus shifts to more lucrative areas in SE Asia and UK.

The CEO hinted that they were looking at how to proceed internationally elsewhere and an announcement will follow in due course - most likely waiting on new CEO to join as he will be running with it.

IMO follow the LOV model (granted diff products) and leverage the Blundy connections & knowledge.

For now the bears have it, but it will turn.

Households are in a decent position (APRA stats), most have simply flipped the non-disc:disc proportion of spending (housing cost pressure driven by housing undersupply exacerbated by immigration oversupply).

Nothing is forever.

Operating leverage + cyclicality + seasonality are a powerful cocktail.

GLTA