Myer Holdings Limited UBS SnapShot: FY16 Result ONE LINER...

Myer Holdings Limited
UBS SnapShot: FY16 Result
ONE LINER
Turnaround on track with FY16 NPAT (norm) in
-line with guidance & consensus, cash-
flow strong & +'ve LFL continuing throughout FY16. MYR expect FY17 NPAT > FY16.
KEY NUMBERS
Sales: $3,245.9m +1.6% y/y (in
-line with UBSe). EBITDA down c8% y/y in
-line with
UBSe. NPAT (norm): $69.3m down 10.6% y/y, in-line with guidance and market (Mkt
$69.4m vs. Guidance $66-
72m). DPS (final) 3.0cps in-line with market.
RESULT
HIGHLIGHTS
1. Sales up 1.6% y/y with Q4 LFL +1.8% y/y, a good result given the warmer start to
winter. 2. Gross margin better vs. UBSe, down 164bp to 38.7% (vs. UBSe 38.2%)
driven by higher concession mix and low AUD. 3. CODB $1,068m flat on pcp and
above
UBSe (2% y/y decline) as cost-savings did not offset reinvestment in customer-
facing staff hours. 4. Cash
-flow better: OpCF up 24% y/y vs. EBITDA down c8% y/y.
Inventory higher due to lower AUD.
VALUATION:
Our PT of $1.25 = Valuation x (1 + Ke) less DPS is
unchanged.
GUIDANCE
FY17 EBITDA growth to exceed sales growth and return to NPAT (norm) growth. In
-line
with UBSe for EBITDA growth of c5% y/y vs. Sales up c2%. CAPEX expected to rise.
UBS COMMENT
Overall a pretty solid result at the operating level with EBITDA broadly in
-line and cash-
flow strong. Guidance looks to be broadly in-line with expectations. FY16 NPAT a touch
weaker vs. UBSe due to higher D&A.