Accent Group Limited

Accent Group Delivers Record H1 FY19 Profit: Accent Group Limited (ASX: AX1) recently stated that Ms. Donna Player has, in an on-market trade, indirectly acquired fully paid ordinary shares numbering 50,000. These were acquired in 2 tranches i.e., 13,000 @ $1.528 per share and 37,000 @ $1.537 per share. Thus, she now holds a total of 50,000 shares in the company.
 

1H FY 2019 Financial Highlights (Source: Company Reports)
 
For the half year ended 30 December 2018, the company reported revenue from ordinary activities of $399.948 Mn reflecting the rise of 10.5% on the pcp.  The company owned retail sales witnessed the robust growth to $331.1 million i.e. an increase of 12.2% on the prior period. The business has been benefitting from global momentum and robust local sales with respect to its vertically distributed brands which includes Skechers, Vans and Dr Martens driving both sales growth in the standalone stores and margin growth in Hype and Platypus.
 
What To Expect From AX1:  Going forth, the company expects to deliver at least 10% EBITDA growth in H2 FY19. This is expected mainly because of more new stores being added in H1 than originally expected as well as robust new store performance, continued strong digital growth as well as continued improvement in the margins through vertical brands penetration and new exclusive brands.
 
Also, the company’s dividend yield stands at 5.73% which can be considered at the decent levels.  If we look at the stock’s YTD performance, the stock has risen by 21.01%.
 
Therefore, considering the returns on the YTD basis, decent annual dividend yield coupled with the expectations of EBITDA expansion moving forward, we maintain our “Hold” recommendation on the stock at the current market price of A$1.460 per share (up 1.389% on April 8, 2019).
 
 

Super Retail Group Limited

Decent Outlook: Super Retail Group Limited (ASX: SUL) has recently stated that one of the directors of the company, Mr. Anthony Michael Heraghty, who held 40,274 ordinary shares & 169,997 unvested performance rights over ordinary shares, acquired 417 ordinary shares under Dividend Reinvestment Plan for a cash consideration of $3,156.69 as on 28 March 2019. Hence, after this development, Mr. Anthony Michael Heraghty holds 40,691 ordinary shares & 169,997 unvested performance rights over ordinary shares.
 
For 26 week period ended 29 December, the sales were $1,403.2 million as compared to $1,323.7 million in the prior corresponding period which reflects an increase of 6.0 per cent, with core businesses delivering solid sales including strong contribution from Macpac and investment in Omni-retail capabilities.

Metrics for26 week period ended 29 December(Source: Company Reports)

What to Expect From SUL: The company’s net external debt amounted to $294.0 millionat the end of December 2018 while, at the end of June 2018, it was $422.9 million. The net debt improvement since June was because of period cash flows. The company has been managing net working capital effectively which might support the company moving forward. In sports retailing, with respect to Rebel, there are plans for 3 relocations and 3 refurbishments in the second half. 
If we look at the past six months’ performance, the stock has receded by 5.73% and is trading at reasonable P/E multiple of 12.720x.

Thus, by considering decent outlook coupled with the effective management of net working capital, we maintain our “Buy” recommendation on the stock at the current market price of $8.250 per share (up 0.243% on 8 April 2019).
 

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