Saturday, 2 November 2024

PMV - Premier Investments

 PMV
---------
Premier Investments (ASX:PMV) has experienced a highly volatile but resilient financial stretch over the past 5 years. This includes an earnings per share (EPS) drop, a major retail portfolio restructuring, solid margins, a strong net cash balance sheet, and a 5-year average Return on Equity (ROE) hovering around 16% to 32%. [1, 2, 3, 4, 5, 6]
Profitability and Margins
  • Net Profit: PMV reported a statutory Net Profit After Tax (NPAT) of AU$338.2 million for the full fiscal year. First-half 2026 results saw NPAT of AU$101.7 million. [1, 2]



  • Margins: The company has maintained an excellent gross margin, recently stabilizing at around 65-66%. Their operating margin has historically tracked very healthily between 17-25%. [1, 2]
Debt and Financial Health
  • Debt Levels: PMV carries low levels of long-term debt, and its balance sheet is generally considered low-risk. It exhibits a healthy Total Debt to Enterprise Value of roughly 0.08. [1, 2, 3, 4]
  • Cash Position: The company has remained in a cash-rich position, holding hundreds of millions in cash reserves while also maintaining massive equity stakes in companies like Breville Group and Myer. [1, 2]
Return on Equity (ROE)
  • Returns: The 5-year ROE has remained attractive, typically ranging between 16% and 32%, heavily driven by their capital-efficient brand ownership model rather than purely physical store expansion. [1, 2, 3]


Strategic Updates & Shareholder Value
  • Over the last 5 years, PMV has seen significant shifts in strategic direction, including the sale of its Apparel Brands division to Myer. [1]
  • PMV consistently pays strong fully franked dividends and continues to execute strategic capital management initiatives (such as \(A\$100\text{ million}\) share buybacks)
------------
Over the last 10 years, Premier Investments Limited (ASX:PMV) has traded at a median trailing price-to-earnings (P/E) ratio of 15.19x, within a historical range between a minimum of 5.34x and a maximum of 28.32x. As of July 2026, the current TTM P/E ratio sits at approximately 15.8x to 16.0x. [1, 2, 3]
Historical P/E Ratio Breakdown
The annual P/E valuation metrics tracking the company's fiscal years (ending late July) show major shifts reflecting retail conditions and abnormal earnings cycles: [1, 2]
  • 2026 (Current): ~15.8x – 16.0x (Stabilizing around its long-term historical median).
  • 2025: ~20.5x (Valuations climbed despite retail sector pressures).
  • 2024: 26.0x (Peaked due to a sharp run-up in share price and pending corporate restructures).
  • 2023: 12.4x (Hit a multi-year cyclical low as retail margins compressed post-COVID-19).
  • 2022: 12.6x (Compressed significantly as consumer sentiment dropped).
  • 2021: 17.1x (Reflected elevated pandemic retail booms and government stimulus tailwinds).
  • 2016 – 2020: Traded in a consistent band between 14.5x and 18.2x, tracking broader retail averages on the ASX. [1, 2, 3, 4, 5]
Contextualizing the Valuation Trajectory
  • Earnings Volatility Impact: Spikes in the P/E ratio (such as in 2024/2025) have historically been driven by corporate restructuring announcements—specifically around its Smiggle and Peter Alexander brands—rather than standard organic growth shifts. [1, 3]
  • Peer Valuation: At its current level of ~15.8x, Premier Investments is trading at a slight discount to its close industry peers like Lovisa (28.5x) but in line with broader ASX specialty retail averages (~17.3x).
...........
ROIC vs WACC 2026
Premier Investments Limited (ASX:PMV) has historically posted a mixed economic spread, with recent trailing metrics showing a Return on Invested Capital (ROIC) of approximately 6.11% to 14.91% against a Weighted Average Cost of Capital (WACC) hovering near 7.95% to 10.18%. Over the past decade, PMV's ROIC has experienced compression periods where it traded close to or below its persistent WACC median (approx. 9.32%), reflecting shifting retail sector margins and capital allocation adjustments. [1, 2, 3]
Capital Returns and Cost of Capital Overview
  • Return on Invested Capital (ROIC): Trailing 12-month estimates place PMV's ROIC between 6.11% and 14.91%, down from historical peaks in earlier years of the decade when core retail and investment holdings performed at higher efficiency tiers. [1, 2]
  • Weighted Average Cost of Capital (WACC): Current calculations estimate PMV's WACC around 7.95% to 10.18%, closely tracking a 10-year median baseline of roughly 9.32% driven by a conservative capital structure with low debt weight (approx. 6.9%). [1, 2]
Value Creation Dynamics
  • Historical Spread: For portions of the 10-year window, robust operating margins allowed ROIC to comfortably clear the WACC hurdle rate, generating positive economic value added.
  • Recent Compression: In recent reporting periods, cyclical pressures and margin normalization have compressed the ROIC-WACC spread, with baseline calculations indicating periods where returns closely match or lag the blended cost of capital. [1, 2, 3]

.............


Posted by at No comments:
Labels:

Friday, 1 November 2024

DDR - Dicker Data

 DDR - Dicker Data
14-07-26



Official Reports: Access full historical earnings files on the Dicker Data Annual Reports page

Buy around $8 

...................
They are one of two distributors of NVIDA chips in Australia. (Multimedia technology is the other one)

ASX:DDR (Dicker Data Limited) has demonstrated strong and consistent profitability, though its debt has increased significantly over the last 5 years as it funded strategic acquisitions. It maintains a stellar Return on Equity (ROE) above \(33\%\) and is renowned for its generous—albeit high-payout—dividend policies. [1, 2, 3, 4]
Key Financial Metrics (5-Year Overview)
1. Profitability & Revenue
  • Net Income: Grew from \(\$57.2M\) five years ago to \(\$85.6M\) for the full year 2025.
  • Revenue: Expanded to \(\$2.57B\) in 2025, driven by enterprise deals, AI infrastructure, and cloud software solutions.
  • Margins: Dicker Data consistently operates with thin but stable profit margins; Net profit margin has hovered between \(3.3\%\) and \(3.7\%\) recently. [1, 2, 3, 4, 5]
2. Debt & Financial Health
  • Debt Load: The company's total debt has increased notably as it funded strategic expansions (such as the Exeed Group and Hills IT acquisitions). Debt-to-equity ratios have risen over the period, with net debt sitting at roughly $359M to $369M.    The debt is actually working capital. They give credit to small businesses .[1, 2, 3]
These are the D/E ratios:
2026 - 1.46
2025 - 1.46
2024 - 1.48
2023 - 1.25
2022 - 1.35

  • Coverage: Despite the heavy debt load, the balance sheet remains sound. Operations and EBIT well-cover both the cash outflows and interest payments. [1, 2]
3. Return on Equity (ROE)
  • Efficiency: The company is highly efficient with shareholder funds. It boasts a trailing twelve-month (TTM) ROE of approximately \(33.78\%\). Management heavily leverages debt to secure these impressive returns. [1, 2]
4. Dividends
  • Payout Ratio: Dicker Data operates with a high dividend payout ratio (routinely between \(90\%\) and \(100\%\)), and a trailing dividend yield consistently hovering around \(3.5\%\) to \(5\%\). [1, 2, 3, 4, 5]
Analyst & Tracker References
Detailed financial reports, balance sheets, and executive summaries tracking their 5-year trajectory can be evaluated via: [1]
.................
ROIC Vs WACC
Dicker Data Limited (ASX:DDR) consistently maintains a Return on Invested Capital (ROIC) well above its Weighted Average Cost of Capital (WACC), historically indicating strong, sustained economic value creation. Current estimates place its ROIC around 18.09% against a WACC of roughly 6.84% to 8.95%. [1, 2, 3]
Capital Efficiency Trends
  • ROIC Range: Typically tracks between 15% and 25% annually, driven by efficient execution in the IT hardware and software master distribution space. [1, 2]
  • WACC Range: Generally hovers between 7% and 9%, reflecting a conservative capital structure with a low weighting of debt. [1, 2]
  • Value Spread: The positive spread (ROIC > WACC) has persisted across the past decade, underscoring a durable economic moat rooted in scale and deep vendor relationships. [1]
............................
Posted by at No comments:
Labels:

LSF - L1 Capital Global Long Short Strategy (GLSF)

 ASX: LSF - L1 Capital Global Long Short Strategy (GLSF)



............................

Compare with + PGA1

-----------------
Posted by at No comments:
Labels:
Subscribe to: Posts (Atom)