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One of the best listed Australian retailer ?, page-3

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saintex

4,443 Posts.

474

12/08/24

10:12

Post #: 75164926
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Originally posted by saintex: ↑

While almost all listed Australian retailers published a decrease of their results, KWB published another surprising result for H1 24.
It increased its sales by 8 % and its EBIT by 32 %.
And it comes after a very good FY 23 when they increased their sales by 14 % and EBIT by 32 %.

Here is what I wrote about KWB on 31/8/23.

"Among the listed retailers, one of the most interesting chain is probably KWB (part of the microcap Joyce Group*).

Joyce Group owns 51 % of KWB, which has 2 trading brands : Kitchen Connection and Wall Span.
KWB is specialised in kitchen and wardrobe renovation through its showrooms :
- 2 Wall Span in South Australia,
- 12 Kitchen Connection in QLD,
- 10 Kitchen Connection in NSW.

2 interesting parts in KWB :
- high EBIT margin : 20.5 % in 23,
- regular growth of its business (revenue per showroom has been increasing every year since FY 16).

Despite the difficulties of the housing market and furniture market in FY 23, KWB continued to have a strong growth in FY 23 with an increase of 15.5 % lfl for their sales, while they also significatively improved their EBIT margin (from 17.8 % in FY 22 to 20.5 % in FY 23) despite cost pressure.
Even if they do not disclose it, I suspect that they must have a negative working capital model thanks to the deposits they receive in advance.
In fact, this company reminds me Nick Scali, which is in a similar market.

KWB has also still a large potential of growth with only 26 showrooms now in Australia.
They think they can double their existing number of showrooms."

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The acquisition of e&s by JB Hifi could generate some interest for KWB (JYC).
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0 Great analysis

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