Premier Investments Limited (ASX: PMV) has reported its FY19 result to the market, is the share price a buy?
Premier Investments was listed on the ASX in December 1987 to be an investment vehicle to acquire or attain controlling stakes of ‘premier’ Australian companies with a particular focus on retailing, importing and distributing. It has leading retail brands like Smiggle, Peter Alexander, Just Jeans and Jay Jays. It also owns just over 28% of Breville Group Ltd (ASX: BRG).
Premier’s Soaring FY19 Report
Premier reported that its revenue grew by 7.3% during FY19 to $1.275 billion.
Like for like (LFL) sales growth was 4.2% in constant currency terms. Apparel Brands delivered solid sales growth of 6.9% with LFL growth of 7.8% as the company continues to close unprofitable stores.
Online sales grew by 31.7% to $148.2 million and contributed 13.4% of FY19’s sales in countries and brands with a transactional website.
Peter Alexander grew sales by 13.3% to $247.8 million (one year ahead of its $250 million annual sales target) and Smiggle grew revenue by 4.6% to $306.5 million and is still targeting $450 million in 2021 or 2022.
Premier Retail grew underlying EBIT (click here to learn what EBIT means) by 11.5% to $167.3 million. Interestingly, management said that Online delivers a higher EBIT profit margin than the group average.
Most importantly, the Premier net profit grew by 27.7% to $106.8 million which included a $25.9 million accelerated depreciation & associated costs to break its leases in the UK and maximise its leverage with UK landlords to lower rent due to Brexit.
But underlying net profit before tax grew by 10.8% to $177.6 million when excluding the one-offs this year and last year.
Premier Dividend
Premier’s Board declared a final dividend of 37 cents per share, up 12.1%, bringing the full year dividend to 70 cents per share, an increase of 12.9%.
This means, at the pre-open price it offers a fully franked dividend yield of 4.45%.
Premier Management Comments
Premier Chairman Solomon Lew said: “The Premier team continues to deliver outstanding returns for shareholders. We have clear growth strategies in place for each brand – which the team executes on relentlessly, refines continuously and measures fastidiously. Capital continues to be invested in growth opportunities with great discipline.”
Is The Premier Share Price A Buy?
Premier continues to show it’s one of the best retail shares on the ASX. At the pre-open price it’s valued at 23 times earnings. This is more expensive than the market, but it has good profit growth prospects for the next few years so I’d be willing to think about shares today.
But I’d prefer to buy the great shares in the free report below even more.
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