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SUL

Why are Super Retail Group Profits Up 5% for FY19?

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Super Retail Group (ASX: SUL) has announced their results for FY19, reporting net profit after tax at $152.5m an increase of 5% from FY18, as well as a 5.4% increase in sales growth. The share price has responded positively up 3.8% to $9.0 for the firm operating on a forecast P/E ratio of just over 11 times.

Super-Retail-Group-2

Super Retail Group operates four key product categories; Supercheap Auto, BCF, Rebel and Macpac. The Company’s network includes 670 stores and 12,000 employees throughout Australia. SUL’s brands have also increased their online presence with $200m in online sales occurring during FY19. These brands have established themselves as leading distributors of innovative and high-quality products that are in high consumer demand, this is evident from the 6.1m loyalty club members the Company retains.

FY19 has been a successful period for Super Retail Group with the Company’s brands performing strongly. Total sales across the group have grown to $2,710m up 5.4% from the previous year whilst EBITDA rose 7% to $314.7m. In light of this, the Company has announced a final dividend for the year of 28.5 cents per share taking the total dividends paid during FY19 to 50 cents per share.

Supercheap Auto is an automotive accessories retailer that operates 323 stores. During FY19 Supercheap Auto generated $1,040.6m in sales, up 3.4%, with 25% growth in online sales and the opening of five new stores. Supercheap Auto is well-positioned to continue to generate returns in FY20 with like for like sales for the first six weeks up 3%.

Rebel is a sport retailer that reported sales for FY19 of $1,016.4m up 3.8%. Rebel has undergone considerable restructuring in recent years to increase fitness apparel and footwear sales. Rebel has also reported a 33% increase in online sales, reflecting EBITDA of $122.6m up 6.0%

Boating, Camping, Fishing (BCF)  has generated $514.6m in sales up 3.3% with strong sales in camping and apparel products. BCF, however, reported declines in margins as the market becomes increasingly competitive, however, BCF’s promotional countermeasures went some way to stabilising margins in the second quarter of FY19.

Macpac was acquired by SUL in March 2018 and was integrated with SUL’s existing Ray’s Outdoors retailer. Macpac reported sales of $119.3m for FY19 up 7.3%, as well as the opening of 16 additional stores demonstrating the growth potential Macpac, has for Super Retail Group.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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