Fair points Travelightor regarding the weak operating cashflow, particularly in FY2016 when we saw inventories climb 12%, well in excess of revenue growth of 2%. The company explained this as necessary to broaden the product range and to strengthen their 'competitive position'. I think that's plausible enough, though if broadening the product range becomes a perpetual exercise then free cashflow won't support the current dividend into the future.
My hunch is that the declining AUD in FY2016 of about US7 cents over the 12 months also hurt op cash flow (and margins). 1H2017 has seen a much more stable AUD and what looks to be improved EBIT margin of almost 10%. It will be telling to see how this impacts the op cashflow in 1H2017.
The guidance given is that 2H2017 revenue is expected to approximate 1H2017 revenue of $47.7m, Yet interestingly 2H2017 EBIT of $4.1m is being forecast compared to 1H2017 EBIT of $4.4m. I wonder if
* Management is just being conservative, or
* Competition really is intensifying and higher costs are proving necessary to defend as opposed to "build their market position" (the words of the company), or
* If this may be a reflection of costs to get the new NZ DC and branch up and running for FY2018?
Fair points Travelightor regarding the weak operating cashflow,...
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Last
$26.81 |
Change
0.810(3.12%) |
Mkt cap ! $1.139B | |||
| Open | High | Low | Value | Volume |
| $26.14 | $26.85 | $26.00 | $386.1K | 14.55K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 17 | $26.61 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $26.85 | 437 | 1 |
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| Last trade - 16.10pm 23/08/2024 (20 minute delay) ? |
| SNL (ASX) Chart |