Supply Network Limited

SNL Details
 
Decent First half 2018 performance: Provider of after-market parts to the commercial vehicle industry in Australia and New Zealand under the Multispares brand, Supply Network Limited (ASX: SNL) has witnessed a stock price fall of 5.97% in three months post a one year rise of 42.5%, as on April 05, 2018, at the back of market volatility. Mr Peter Gill is also retiring in early October 2018 after 23 years of his service as the Senior Finance Executive and Company Secretary.
 
The company has otherwise delivered 13.3% rise in the group sales revenue to $54.1m for the first half of 2018. This includes 15.1% growth in sales revenue in the Australian operations and 10.5% growth in the New Zealand operations in NZ$ terms. The earnings before interest and tax for the half-year 2018 was $5.6m, which is an increase of 27.1% on the same period last year. The company has reported 27.4% growth in the profit after income tax for the half-year to $3.8m. Moreover, during the first half 2018, SNL continued to develop the product range and explore opportunities to expand the company’s operations. For this, SNL had acquired a parcel of land in Christchurch NZ to be developed over the next 18 months as a new site for the Christchurch branch and SNL leased new premises in Port Hedland, Western Australia where the company expects to commence trading in March 2018. During the second half of the financial year, SNL has planned to set up a new branch and New Zealand distribution centre in Hamilton. These long-term investments are expected to support growth plans but will also change cost scenario.
 
SNL now expects FY 18 sales revenue to be around $110m and EBIT of around $10.8m. In addition, the company had declared the dividend of 5.5 cents per share, which was payable on 05 April 2018. In view of the trading scenario and cost impact in the coming months, we believe that investors can now book profits in the stock as we give a “Sell” recommendation at the current price of $ 3.150.
 

SNL Daily Chart (Source: Thomson Reuters)

 
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