Jun'21 Trading Update

In about 9 weeks time Adairs will likely issue a trading update. That is its normal practice.

I am expecting a continuation of the strong sales growth in Adairs on-line and better than expected sales growth in Adairs stores.

Mocka will provide the cream on the cake and a steady march to a SP above $5.00 is highly likely.

My reasoning is that economic conditions continue to improve quickly and strongly. A good example of this is Domino's which launched a recruitment drive today saying they need to fill 2,500 jobs. Jobs growth and job vacancies are on the rise with employment now back to pre pandemic levels. Talk to anyone from the bush at the moment and they will tell you tales of good prices and record harvests. A rice grower friend of mine from Griffith harvested 33,000 tonnes of rice a couple of weeks back. On the same paddocks last year he got just 10,000 tonnes.
nab reported this week that equipment purchases in the bush are running 130% above last year, that is some kind of growth.

And who knows how much the wealth effect on rising home values will do to spending intentions. In the past when house prices rise home owners tend to become more confident and spend more money. All of this spending will go into the national economy rather than be spent on overseas holidays.

International travel is still a long way off, people are still earning their pay and instead of spending on international travel they will continue to spend on their homes and this is the sweet spot for ADH.

If Adairs gets the growth I am expecting and with no debt the prospect of a large fully franked dividend should not be ignored.

Cheers......................Daicosisgod