Premier Investments Limited, well positioned for future growth

Team Veye | 01 Oct 2020 ASX - PMV
Premier Investments Limited, well positioned for future growth

Premier Investments Limited (ASX: PMV)

Premier Investments NPAT OF $137.8 million, up 29.0%

Premier Retail Underlying EBIT OF $187.2 million, up 11.9%

Full Year Dividend OF 70 cps

Premier Investments Limited (ASX: PMV) (“Premier”) on 25 September 2020 reported net profit after tax (NPAT) of $137.8 million for the 52 weeks ended 25 July 2020 up 29.0% on FY19 (FY19: $106.8 million).

(Graphic Source – Company Reports)

Highlights for FY20

  • Premier Investments Group NPAT $137.8 million, up 29.0% on FY19
  • Premier Retail Underlying EBIT up 11.9% to $187.2 million
  • Premier Retail LFL sales up 7.6% (constant currency) with total sales of $1.22 billion down 4.3% on FY19
  • Record Peter Alexander sales up 16.3% to $288.2 million
  • Record Online sales of $220.4 million, up 48.8% on FY19 (2H20 up 70% on 2H19) and contributed 25.5% of 2H20 total Premier Retail sales
  • Premier’s stake in Breville at a market value of $1.0 billion as at 11 September 2020 (Balance sheet value $257.4 million)
  • COVID-19 is accelerating the retail industry restructure. Premier Retail is best placed to maximise this customer led change through its highly profitable online channel and flexibility within its property portfolio. The acceleration of online has continued into FY21 with Premier Retail online sales up 92% for the first six weeks.

(Chart source: TradingView)

Premier Retail delivered record underlying earnings before interest and tax (EBIT) of $187.2 million, up 11.9% (FY19: $167.3 million). Premier Retail like for like (“LFL”) sales were up 7.6% (constant currency) for the year with total sales down 4.3% to $1.22 billion (FY19: $1.27 billion). Premier Retail’s underlying EBIT margin for the year was 15.4% (Data Source – Company Reports)


Veye’s Take

Premier Retail delivers nine consecutive years of underlying EBIT growth. Its FY20 underlying EBIT margin to sales (Pre AASB 16) was up 222 bps on FY19. Premier Retail appears to be best positioned for an accelerating industry restructure. Premier Investments Limited has and continues to maintain a strong balance sheet. The stock is strongly trading above all MAs. It has completed the inverse head &shoulder pattern and can have the potential to continue moving upwards. The Latest "Buy" on “Premier Investments Limited” at the price of $15.48 was given on 21 May 2020. It has already grown by more than 32% in less than four and a half months until now. Veye maintains a "Hold" on “Premier Investments Limited” at the current price of $20.56


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