Stocks’ Details

Super Retail Group Limited

SUL’s sales grew Y-o-Y: Super Retail Group Limited (ASX: SUL) ended FY 2018 with total sales of $2.5 billion which implies the Y-o-Y growth of 4.2%. The top line figure consists of $31.4 million thanks to the Macpac revenues. However, after adjusting the Macpac’s contribution in the revenues, the Y-o-Y growth comes out to be 3% on the back of sales from the new stores as well as the robust performance from the company’s divisions. The company’s online channel was the primary contributor to the company’s top line growth because the customers were more inclined towards the experience of the omni channel which helped them to make an online purchase.


Performance (Source:  Company Reports)

What Lies Ahead for Super Retail Group: Moving forward, Super Retail Limited plans to increase its market share so that the company is able to maintain the leading position in Australia. Among the company’s businesses, BCF, Rebel as well as Supercheap Auto are already enjoying the strong position while the strategy of the company is to make Macpac a leader in its category. According to the management of the company, for the BCF and Rebel businesses, the opportunities to witness significant growth still persist in regard to the sales, as well as margins and hence, the focus, would be on these parameters.

Even though the company has always focused on reducing its costs, it would focus on the primary business processes so that the costs are optimized. Over the past three months, the stock price of Super Retail Limited has witnessed the rise of 5.14% and it ended at A$8.840 marking an intraday increase of 0.455%. As per the technical analysis, the outlook for the company seems favorable. On a monthly chart, MACD (moving average convergence divergence) indicator has been applied. According to the momentum indicator, the MACD line has crossed the signal line and is moving upwards which is a positive sign. Therefore, we maintain our “hold” on the stock.

Myer Holdings Limited

Bleak Performance in FY 2018: Myer Holdings Limited (ASX: MYR) ended FY 2018 with the revenues of $3.1 billion which reflects the decline of 3.2% on the YoY basis. The company ended the year with online sales amounting to $239.4 million. Its operating gross profit stood at $1.18 billion reflecting the YoY decline of 2.9% while its operating gross profit margin stood at 38.2% which implies the YoY growth of 8 bps (basis points).

According to the management of the company, the performance for FY 2018 was not up to the mark. According to them, after realizing that the strategy execution would be help the company in garnering the expected financial performance, the company’s leadership positions were changed. As a result, the company’s management has plans to move forward by looking from the clients’ perspective.


Performance (Source: Company reports)

How can the Company Improve Performance: The management of Myer Holdings believes that focusing and improving of the user experience would help it to achieve a decent performance. The company plans to come up with the new website which would streamline the process of search capabilities and would prompt customers to stick to the website. In addition, to this the company has decided to adopt cost reduction initiatives which could help in boosting the bottom-line numbers.
The company’s “Customer First” plan would primarily be focusing on improving the experience of the customers as well as enhancement of the company’s website. The company’s management is having a positive outlook in regard to the new plan and expects that this could enhance the performance as well as improve the shareholder value.

Over the span of three months, the company’s stock price has witnessed a turnaround performance as it has advanced 37.97%. On September 26, 2018, the stock closed at A$0.530 which implies an intraday decrease of 2.752%. As per the MACD indicator, the MACD line has managed to cross the signal line and is rising upwards. The default values have been taken into consideration for this. As a result, we maintain our “hold” position on the stock.
 

Specialty Fashion Group Limited

Key Personnel Changes: Specialty Fashion Group Limited (ASX: SFH) has recently announced that Mr. Daniel Bracken has resigned from his position as Chief Executive Officer and Managing Director. In turn, Mr. Phil Ryan has been appointed as new Chief Executive Officer (CEO) of the company, effective from 1st October 2018. In addition to this, the Chairperson Ms. Anne McDonald will retire as a non-executive director and will be replaced by Mr. Michael Kay who will join the Board as a non-executive director and Chairman-elect, effective from 1 October 2018. In the meantime, Mr. Kay will stand for election at the company Annual General Meeting (AGM), to be held on 9 November 2018. On the financial front, revenue from ordinary activities decreased 6.5% to $752.25 Mn in FY18 on a Y-o-Y basis. The loss for the year attributable to the owners of Specialty Fashion Group Limited was down by 22.4% and amounting to $6.97 Mn in FY18 over the prior year. It was mainly impacted by the fair value and transaction-related adjustments associated with the divestment of its five brands out of six during the period. The group has taken significant steps to simplify its complicated business and disposed its Millers, Katies, Autograph, Crossroads, and Rivers to Noni B for $31 Mn. Hence, we assume that the business is in a more sustainable position to generate positive returns for its shareholders over the long run at the back of concentrating on the further development of its City Chic brand. Additionally, for FY 19, SFH expects to restart to pay a dividend to its shareholder at the minimum pay-out ratio of 50% of NPAT.

Meanwhile, the stock has generated a YTD return of 765.52% and traded at a level close to 52-week higher level. In the last six months, the stock has risen by about 239% and was up 1.195% on September 26, 2018. Based on the foregoing and trading level, we believe that this is a stock to watch for, while it trades at the current price of $ 1.270.
 

Noni B Limited

Robust Performance in FY18: Noni B Limited (ASX: NBL) recorded strong performance in FY 2018 in regard to the top line number. It recorded a YoY growth of 17.6% and ended the year at $372.4 million. The company saw a substantial increase in the earnings before interest, tax, depreciation and amortization or EBITDA of 62.7% and ended the year at $37.2 million. The company’s sales witnessed the robust momentum on the YoY basis in FY 2018 on the back of the winter categories.

 Performance (Source: Company Reports)

What lies ahead for the company: Noni B Limited is expected to continue the strong momentum in the business in FY 2019. According to the management of the company, FY 2019 would be a transformational year. The company had acquired Specialty Assets in May 2018 and the top management of both the companies are focusing on integration as well as implementation plan. The company has witnessed strong online growth in FY 2018 on the YoY basis.

Over the past six months, the stock has been achieving strong upward momentum as the stock rose 43.72%. On September 26, 2018, NBL ended at A$3.520 implying a decline of 0.845%. According to the MACD indicator applied on the monthly chart, the MACD line is above the signal line from the past few months. Hence, we have a “wait and watch” view on the stock at the current price, which is on a higher side.


 
Stock Price Comparative 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.