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MattKeaton

162 Posts.

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01/02/23

17:29

Post #: 66012409
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Originally posted by TheFatGeneral: ↑

Not a realistic comparison to just take forward the 20% uplift compared to 2022 - the first few months of 22 were massively impacted by store closures (24% of trading days lost).

As at the AGM - they were 4.5% behind FY2021 (90m * .955 = 86m revenue)
Had been 6% behind from results update - so was tracking in the right direction.

Had 5 stores in Aus + 3 in NZ open for xmas + the extra stores opened in 2nd half FY2022 to boost revenue for the christmas period compared to 2022.

We know that in 2022 they had 80m in revenue, in 2023 FY we are at 40.5m at the AGM (compared to 32.7m at the same point in time in FY2022) (we know this because they said revenue was up 7.8m via PCP for first 19 weeks).

Assuming they can match the 2022 xmas period numbers - that's 47.3 + the already achieved 40.5, get's us to 87.8m. Now the last period in 2022 benefitted from catch up sales and the margin was probably helped by (a) a higher AUD and (b) a greater proportion of online sales. But we now have a greater store footprint. So I'm guessing we still are down off 2021 - but rather than 4.5% down it gets closer to 2.5% or so. 2021 was a truly spectacular year with unique circumstances.

So I'm saying base case is 88m revenue, with margin coming in slightly under at 67%. Now with all the extra stores I'm expecting costs to go up to approx 35m for the half.

Gives us:

88m - revenue
59m - gross margin
35m - expenses
24m - EBITDA

Given anecdata, revenue could surprise to the upside. I don't see huge scope for margin improvement, especially as I noted a large amount of discounting and weakness in the AUD. The interesting thing will be how the NZ stores are faring. If positive, then adds a potential 10-15% revenue growth opportunity in the medium term (over 2-4 years as they roll out more stores).

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Yep. This is the thing. We really wanted to see at least 25% growth early in the year, as less than 25% is artificial growth due to store closures prior. Your other observations are bang on.

DSK Price at posting: $1.89 Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

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