Ann: 2023 AGM Presentation, page-6

Yes, and hopefully we will see a better 2nd half (which includes Mothers' Day) this FY. The loss in H2 of last FY was very disappointing, and lead to the big decline in SP. So if we can achieve a solid H1 this year, that at least matches PCP, then that should silence the doomsayers who have been saying that last year's H2 result was the beginning of the end. We should then see a recovery in the SP.

After that, we need a recovery of H2 result with improved Mothers' Day trading. A return to profit would be nice, but even a reduced loss will lift the full year result and restore faith in the business model.

On the subject of branches, I agree that continuing to open more branches in Australia is becoming a questionable strategy. Sooner or later they must start to cannibalise the sales from existing stores. However, they don't hesitate to close loss-making stores, and in fact have closed a couple in the last year. So I have faith that management are fully aware of the issue and will be alert to the signs of diminishing returns.

And this is why I'm especially happy to see that they are now expanding in another direction - their product lines (I suggested this in a post a while back). Here again we've seen some naysayers criticising the strategy, but it is a simple matter to cull the lines that under-perform (they do it already). Perfumes and soaps continue the theme of scented products, so they are a logical extension. Sure, there is a lot of competition in the space, but there is a reason for that - they are 'everyday' items. DSK can differentiate their new products by leveraging their existing range of scents and combining with existing product lines in gift packs. Hopefully these new product lines will have the effect of making sales a little less seasonal.

All IMO.