Will Accent Group continue to deliver against its growth plan objectives?
Team Veye | 11 Sep 2019 ASX - AX1
Accent Group Limited (ASX: AX1)
Accent Group Delivers Record FY19 Profit
Accent Group Limited (ASX: AX1) on 22 August 2019 announced a record full-year profit for the 52 weeks ended 30 June 2019, with EBITDA increasing 22.5% to $108.9 million
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(Chart Source: Company Reports)
Performance Highlights
- Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) of $108.9 million, up 22.5% on the prior year
- Net Profit After Tax (NPAT) of $53.9 million, up 22.5% on the prior year
- A fully franked final dividend of 3.75 cents per share bringing full-year dividends to 8.25 cents per share, up 22% on the prior year
- Accent Group Sales (company-owned) of $772.5 million, up 14.3% on the prior year
- Digital sales up 93% on the prior year tracking to c15% of sales
- Strong cash on hand of $37 million
- 10-year earnings per share compound annual growth rate of 14.5%
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(Chart Source: TradingView)
Statutory Net Profit After Tax increased 22.5% to $53.9 million, with dividends per share increasing 22.2% to 8.25 cents.
Accent Group CEO, Daniel Agostinelli, said that FY19 had been another record year of profit for Accent Group. The company continued to deliver against its growth plan objectives in gross margin improvement, new store rollouts, The Athlete’s Foot (TAF) franchise acquisitions, and innovation both in the digital and in-store customer experience. (Data Source – Company Reports).
Veye’s Take
The increased final dividend and strong payout ratio reinforce the confidence in the performance and financial strength of the company. Accent Group has delivered strong compound annual earnings per share growth of more than 14% over the last 10 years and the FY19 results demonstrate that the growth plan is on track. LFL retail sales for the first 7 weeks of the H1 FY20 are up 2.7%. The Group is targeting profit growth in FY20, expected to be achieved through low single-digit LFL growth, continued strong digital growth, 40 new stores, 54 stores annualising from FY19 and 65 current and new TAF corporate stores. The underlying gross margin % is expected to grow as a result of the increased vertical brand and product penetration and TAF margin expansion. The stock had a gap up crossing of its resistance from where it has not retracted. We expect the stock to move higher after some consolidation. Veye gives a Hold to “Accent Group Ltd” at the current price of $1.75
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