Lovisa Holdings Ltd

Ongoing international store roll out: Lovisa Holdings Ltd.’s (ASX: LOV) store network rose to 326 stores as of FY18 with a net rise of 38 stores from June 2017, with 52 new stores opened and 14 stores closed as part of the ongoing store network optimization process. Major driver of future growth for Lovisa is the ongoing international store roll out. The group invested into the structures to support their global expansion and at the same time continued to deliver strong results from the current markets. Revenue rose 21.4% in FY18 against FY17 with growth delivered across all markets and same store sales growth at 6.8%. Klines store acquisition in May 2017 drove South Africa performance while UK store rollout drove European growth with a rise of 13 stores for the year, as well as 5 stores in Spain at year end and 2 in France. Gross Margin surged 120bps to 80.0%, driven by ongoing performance and tight inventory management, the stronger Australian Dollar and the strength of the Christmas and Boxing Day sales period. But the positive news is already factored in the stock with forecast growth of 20% per annum while cyclical nature of the industry remains a concern with management changes seen lately. LOV stock has risen over 52.4% in this year to date (as of August 24, 2018). Trading at higher levels, we rate the stock to be “Expensive” at the current price of $ 10.600.
 

Regional performance (Source: Company reports)
 

BWX Ltd

Positive strategic update: BWX Ltd (ASX: BWX) recently made a positive update from the Independent Board Committee (IBC) review which was undertaken by them in light of the $6.60 unsolicited preliminary, non-binding, indicative and conditional proposal from John Humble and Aaron Finlay in partnership with Bain Capital Private Equity. The Strategic Review shows solid organic growth opportunities for BWX which comprise ongoing growth of the core Sukin brand both domestically and internationally. The key aspects include rising market share in the current channels and diversifying into new channels, boosting e-commerce presence, and capitalising on Nourished Life’s digital capabilities to drive growth across all brands. BWX stock rose over 5.1% on 27 Augustand we believe the bullish momentum would continue in the coming months and recommend a “Hold” at the current price of $ 4.740.
 

Bapcor Ltd

Pleasing automotive businesses performance: Bapcor Ltd.’s (ASX: BAP) stock surged over 21.3% in the last six months (as of August 24, 2018) given their pleasing FY18 performance with automotive businesses performing ahead of expectations. Statutory revenue and net profit after tax for FY18 rose 22.0% and 47.8% respectively against FY17. Statutory earnings per share for FY18 was 33.90 cents per share, rising 42.7% against FY17 driven by acquisition of Hellaby’s automotive businesses as well as good profit growth across all of Bapcor’s automotive business segments. The group reported a dividend of 15.5 cents per share in FY18 which is a rise of 19.2%. The group also divested its non-core assets of Contract Resources, TBS and Footwear during FY18 to focus on its core Automotive Aftermarket businesses. We rate a “Hold” at the current price of $ 7.010 while it still looks a bit underappreciated.
 

FY18 performance (Source: Company reports)

 
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