Adairs Ltd (ASX: ADH)

ADH Details
 
Positive guidance: Up 4.8% on January 11, 2018, Adairs’ stock is touching its 52-peek level post a 141.4% rise in last six months.  The group’s total sales for 1H18 are now expected to be $149.1 million, i.e., a 19.8% increase on the prior period with 1H18 EBIT expected to be between $21.0 and $21.5 million against 1H17 figure of $12.0 million. Adairs has also updated its full year guidance for sales of between $300 and $310 million and EBIT of between $40 and $44 million. The group has banked upon strong product offering with ongoing focus on retail execution both in store and online, to reflect the strong guidance. Its FY17 result also entailed strong sales growth of 7.1% with online sales surging 26%. While various financial metrices were positive net profit after tax was down 19.6% due to retail shortcomings while the profit in second half of the year stabilised a bit. The group expects to witness growth in sales that will be driven by investments in an improved omni-channel customer experience and customer loyalty program. Further insights will be provided when the group releases its half year results in February 2018. We expect the group to expand more on growth drivers in the near term, and thus give a “Hold” at the current price of $2.20
 

ADH Daily Chart (Source: Thomson Reuters)
 

Corporate Travel Management Ltd (ASX: CTD)

 
CTD Details
 
Acquisition led growth: The leading provider of corporate travel services, Corporate Travel Management Ltd.’s stock has fallen about 9.55% in last three months as at January 10, 2018. The group came under investors’ scrutiny particularly with the recent sale of about 1.165m shares at $23 per share by Managing Director, Jamie Pherous and this represents 5.5% of his total shareholding. The group otherwise has demonstrated scale benefits with growth in market share across ANZ, North America, Europe and Asia. With better customer service, innovative products and booking activity shifting to online mechanism, CTD’s EBITDA margins are expected to increase. CTD is expected to benefit from position in the USA and Europe with an aim to enhance its current market share of less than 1% in each region, and with better acquisition opportunities. The group has a good track record of maintaining client relationships and had reported a 43% rise in FY17 underlying EBITDA at the back of client wins and retentions maintained at high levels. The group has given FY18 underlying EBITDA guidance of $120-125 million, which is 22% to 27.5% growth over prior corresponding period and seems to be on track to achieve this. The price to earnings ratio is at higher levels; and accordingly we give a “Hold” at the current price of $20.59, while the group has the potential for further growth.
 

CTD Daily Chart (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.