Noni B Limited

NBL Detail

FY19 top-line increased by 136.8% to $881.9 Mn than previous year:Noni B Limited (ASX: NBL) is involved in retailing of women’s apparel and accessories. The company recently published its FY19 annual result report, where it highlighted that its underlying EBITDA increased by 22% to $45.5 Mn. Group’s total revenue increased by 136.8% to $881.9 Mn for the year, following the successful integration of the acquired five Specialty Fashion Brands.Statutory after-tax profit after restructuring costs for the period was reported at $8.2 Mn. The Board of Directors declared a fully-franked dividend of 5.5 cents per share, with record date and payment date on October 10, 2019 and October 24, 2019, respectively. With a combination of 9.0 cent per share interim dividend paid in March 2019, the fully-franked dividend for FY2020 totalled to 14.5 cents per share, which is an increase of 11.5% over the total dividend paid in FY2019.
Group’s operating cash flow and net cash for full year were reported at $23.5 million and $7.1 million, respectively.
 
 

FY19 Key Metrics (Source: Company Reports)

What to expect: As per the release, company’s EBITDA for FY2020 is expected to be in-line with market consensus of $75 million.NBL is looking forward toward revenue and earnings growth in FY2021 and beyond, and for this, it is working on its store expansion and online strategies.

Stock Recommendation: NBL’s share generated negative YTD return of 4.06%. Its gross margin for H1FY19 stood at 56.7%, better than the industry median of 22.3%. Its ROE for H1FY19 stood at 8.4%, better than the industry median of 8.1%, which implies the company generated a better return for its shareholders than its peer group. Moreover, its EV/Sales and EV/EBITDA multiple for TTM stand at 0.2x and 4.7x, lower than the industry median of 0.7x and 6.8x, indicating an undervalued position at the current juncture. Currently, the stock is trading close to its 52 weeks low level of $2.310 with PE multiple of 15.76x and an annual dividend yield of 5%. Hence, considering the aforesaid facts and current trading levels, we recommend a Speculative Buy” rating on the stock at the current market price of $2.590 (down 0.385% on August 27, 2019).


NBL Daily Technical Chart (Source: Thomson Reuters)
 

Coles Group Limited

COL Detail

FY19 sales revenue (excluding Fuel sales and Hotels) increased by 3.1% to $35.0 billion:Coles Group Limited (ASX: COL) is a retailer of products such as fresh food, groceries, household goods, etc. The company recently published its FY19 result report where it highlighted that its sales revenue (excluding Fuel sales and Hotels) increased by 3.1% to $35.0 billion, with major growth in Supermarkets, Liquor and Express segments. The Supermarkets EBIT growth was reported at 2.2%, whereas Group’s EBIT decreased by 8.1% due to lower Express fuel volumes and corporate costs. Around 30% of online sales growth generated $1.1 billion in sales revenue in FY19.

The Board of Directors declared a fully franked total dividend of 35.5 cents per share, comprising a final dividend and a special dividend which covers the period from November 28, 2018 (being the effective date of the demerger from Wesfarmers) to June 30, 2019.The final dividend reflects a typical retail calendar second half period of 25 weeks and represents an 80.1% payout of earnings pre-significant items for that period.


FY19 Key Financial Metrics (Source: Company Reports)

What to expect: As per Q1FY20 trading update, Little Shop 2 has again resonated with the customers and is driving strong engagement. As envisaged, cycling the comparable sales growth from last year’s highly successful Little Shop campaign will be challenging given competitor activity in the market.

In Express, growth in fuel volumes has been encouraging following more competitive fuel pricing and the introduction of the Little Shop 2 campaign.However, it will take time to build volumes to target levels, and as a result, Coles expects earnings growth under the New Alliance Agreement to remain subdued in FY20. The Smarter Selling initiatives by the company in FY20 are anticipated to deliver annualised benefits in excess of $150 million.

Stock Recommendation: COL’s share generated a positive YTD return of 16.65%. As per technical analysis, on daily framework chart COL stock retraced from the 38.2% of the Fibonacci Retracement level, which increases the probability of buyers’ strength. Its EBITDA margin and net margin for FY19 stand at 5.2% and 2.8%, better than the industry median of 5.0% and 1.5%, respectively, suggesting better fundamentals for the company. ROE for FY19 stood at 32.6%, well above the industry median of 11.3%, which implies that the company generated a better return for its shareholders than its peer group. Moreover, EV/Sales multiple (on TTM basis) stands at 0.5x, lower than the industry median of 0.6x. Hence, considering the aforesaid facts and current trading levels, we recommend a “Buy” rating on the stock at the current market price of $13.560, down 0.732% on August 27, 2019.


COL Daily Technical 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.