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Highlights

  • Lynch Group is a grower and wholesaler of flowers and potted plants in Australian and Chinese floral market
  • In 1HFY24, the company registered 54% YoY increase in NPATA to AUD 2.2 million
  • Expected range of group EBITDA is AUD 40-43 million in FY24

Lynch Group Holdings Limited (ASX: LGL) is an Australia-based vertically integrated grower and wholesaler of flowers and potted plants. The company operates across China and Australian floral markets.

In the first half of financial year 2024 (1HFY24), the company recorded 3.4% YoY increase in its revenue to AUD 186.6 million, driven by sustained demand in Australian retail channel. However, this was partially offset by higher prices in Chinese market.

During the reported period, EBITDA of LGL increased by 28.2% YoY to AUD 16.7 million, backed by ongoing efforts to improve profitability in Australia. In 1HFY24, NPATA of the company surged by around 54% YoY to AUD 2.2 million.

Top 10 shareholders of LGL

The top 10 shareholders of LGL have nearly 86.77% shareholding in the company. Next Capital Pty. Ltd. and Regal Partners Limited have the highest stake in the firm with a shareholding of 17.40% and 17.18%, respectively.

Recent business update

Through an ASX update dated 1 March 2024, the company shared that FIL Limited, and its related corporate bodies have decreased their stake in LGL to 8.21% on 28 February 2024 from 9.99% on 24 August 2021.

Outlook

In 2HFY24, the company expects to see 4% increase in revenue from Australian market and fall in revenue from Chinese market because of lower domestic pricing compared to previous levels due to low customer confidence impacting demand.

In FY24, group EBITDA is expected to fall in the range of AUD 40 – 43 million. Moreover, LGL expects interest charges to rise due to hikes in interest rate by the Reserve Bank of Australia in 2023.

Share performance of LGL

LGL shares closed 0.75% higher at AUD 1.35 apiece on 11 March 2023. With this, LGL’s share price has declined by 24.58% in the last one year and witnessed a fall of 38.36% in the past six months.

The 52-week high of LGL is AUD 2.68, recorded on 20 June 2023, while the 52-week low is AUD 1.3, recorded on 26 February 2024.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 11 March 2024. The reference data in this report has been partly sourced from REFINITIV.