The Premier Investments Ltd (ASX: PMV) share price is under the microscope today after reporting its FY25 half-year result.
After making a recent sale of some of its businesses to Myer Holdings Ltd (ASX: MYR), Premier Investments now owns Peter Alexander, Smiggle, a chunk of Breville Group Ltd (ASX: BRG) shares, and property.
FY25 half-year result
The sold retailers have been classified as discontinued operations, while the remaining parts of the business are called continuing operations. Let’s look at the main numbers:
- Continuing operations sales down 1.8% to $455 million
- Continuing operations EBIT down 16% to $129.4 million
- Total sales (including discontinued) down 2.5% to $857.8 million
- Total EBIT (including discontinued) down 20.9% to $162 million
- Continuing operations underlying profit before tax down 12.7% to $148.4 million
- Statutory net profit after tax (NPAT) down 34% to $117.1 million
- No dividend
Premier Investments said that its continuing operations sales fell slightly because of a challenging discretionary retail environment (for Smiggle particularly). Peter Alexander sales, excluding the UK, rose by 6.6% to $297.7 million and Smiggle sales declined 14.5% to $157.3 million.
During the period, four Peter Alexander stores were opened (and trading ahead of expectations), while four existing stores were relocated and/or expanded. Its Chadstone store was relocated and expanded by 50%.
Its Breville investment provided $6.2 million of dividends and its 25.4% holding of the business is now worth $1.33 billion.
The business said it would return to paying dividends in September 2025
Outlook for the Premier Investments share price
Store growth remains a key focus for the business in the coming years.
The business has identified an opportunity for up to 10 new Peter Alexander stores in the UK as part of its initial launch plans over the next few years, to add to the existing three it has already opened.
In the second half of FY25, it has already opened two new stores and relocated/expanded four other stores in Australia and New Zealand. The company has identified more than 15 further opportunities for new/larger format stores.
Premier Investments is developing a loyalty program for Peter Alexander customers to launch in 2025, to help enhance the customer experience and engagement.
Smiggle has identified new stores in the near-term in existing markets. It’s also exploring future offshore markets both as future ‘owned’ stores and the evolving wholesale channel (both store-in-store and standalone stores).
Overall, I think the company has a promising future thanks to Peter Alexander and Breville. But, the short-term seems challenging, particularly for Smiggle. The UK market is an exciting opportunity, it my opinion.
