The Premier Investments Limited (ASX: PMV) share price is in the spotlight after the company revealed its FY24 first-half result.
This business owns a number of brands including Smiggle, Peter Alexander, Jay Jays, Dotti and Just Jeans. It’s also a substantial shareholder of Myer Holdings Ltd (ASX: MYR) and Breville Group Ltd (ASX: BRG).
Premier Investments HY24 result
Here are some of the highlights from the first six months of its 2024 financial year:
- Premier Retail global sales fell 2.8% to $879.5 million
- Online sales increased 0.2% to $171.2 million
- Premier Retail EBIT (EBIT explained) dropped 4.8% to $209.8 million
- Underlying net profit after tax (NPAT) of $155.6 million
- Statutory NPAT rose 1.6% to $177.2 million
- Interim dividend of $0.63 per share, up 16.7%
Breakdown
Premier said Peter Alexander sales rose 6.7%, Smiggle sales dropped 3.6% and the apparel brands saw sales decline 8.1%.
Pleasingly, Peter Alexander opened six new stores during the FY24 first-half, with all trading ahead of expectations.
The company said the Smiggle consumer suffered from increased cost of living pressures. The apparel brand customers also suffered from cost of living pressures, but there was improving momentum in the second quarter.
Growth plans
The Premier Investments’ share price will likely be influenced by how successful its growth initiatives are.
The company revealed that an agreement has been reached with a key wholesale partner to open freestanding Smiggle stores in Indonesia, in addition to their current store-in-store arrangements.
Smiggle has the opportunity to grow the store count by at least 30 stores, which would be an increase of at least 10% in the near-term.
Peter Alexander has announced it intends to open in the UK during the first half of FY25. In the short-term, it has identified opportunities for up to 10 new stores to start in the UK.
Demerger plans
Last year the company announced it was carrying out a strategic review.
The board has agreed to work towards demerging Smiggle into a separate listed entity by the end of January 2025.
It’s also exploring a demerger of Peter Alexander into a separate listed entity in the calendar year of 2025.
The leadership think that a demerger of these two businesses “is likely to maximise and accelerate the growth opportunities for these two brands over time”.
Final thoughts on the Premier Investments share price
Some of the numbers were a bit mixed, but overall things are looking positive for future growth for Peter Alexander and Smiggle.
If both Peter Alexander and Smiggle are demerged, I’m not sure how attractive the growth prospects of the remaining business will be. The announced dividend is a good payment though.
After a strong run up of the Premier Investments share price – more than 20% in the last six months – I’m not sure it’s good value today. I’d be willing to wait for a pullback before buying shares.
