Dusk performance vs pre-covid

Dusk was listed in November 2020 (at 2 $).
It is quite tough to look at the recent history, as a lot of investors consider that they over-earned during covid.
As a result, I find it more interesting to look at the company's performance vs FY 19 (before covid).

Of course, we know that sales have been disappointing, regularly decreasing from FY 21 to FY 24*.
But, what I find more interesting is that the company has kept a stable gross margin (vs FY 19) and still had a significant free cash flow in FY 24 (4.5 m$, excluding the impact of working capital), when their sales and earnings have bottomed.
To be fair, probably worth noting that FY 24 free cash flow also included a one off due to income taxes, as the company received 1.5 m$ from taxes, while their tax expenses were 1.9 m$ in the P&L. Even if we normalise taxes, the company had a still a positive underlying free cash flow at the bottom of its earnings.

Also interesting to note that FY 24 results (NPAT of 4.3 m$) was comparable to FY 19 (NPAT pro forma of 4.5 m$), even if it corresponds to a large decrease of NPAT/store (29 K$ in FY 24, vs 39 k$ in FY 19).

I am surprised that the market remains so sceptical about Dusk's recovery :
- obviously, Dusk has proved that it still has decent earnings and cash flow, even at the bottom of its recent cycle,
- H1 25 has shown a significant rebound of their sales and earnings.
Once again, it showed the strength of its gross margin (increasing together with sales).

Obviously, the market is far from discounting the best case scenario for Dusk.
Reminder : performance rights (given at the last AGM) will be fully exercised if EPS 27 is above 22c, which corresponds to a PE 27 of 5.1 x.

So, it seems that, in a rather pessimistic scenario (no improvement after H1 25), Dusk has a PE 25 of 12.3.
And in the best case scenario, it has a PE 27 of 5.1 x.


* before rebounding during H1 25