I changed my view on JYC and decided to buy it, despite being cautious previously (cf post in Sept 23), for 3 main reasons : - difficult to ignore the performance of KWB in FY 23 and H1 24, when they are supposed to struggle, - still not really convinced by other businesses, but they are now quite small and does not affect the total performance of the group, - Joyce has now a better capital allocation and significantly increase its dividend (+ 42 % in FY 23 and + 38 % in H1 24).
The company has a high free cash flow yield (FY 23 free cash flow yield of 10 %, excluding minority interests), while still showing a high potential of growth (could double the number of KWB showrooms across Australia).
H2 24 KWB performance is expected to be weaker due to a combination of normalising gross margin, increased staff costs and higher marketing costs. But it should not change the medium term trajectory of KWB which had a very regular performance for several years.
