Premier Investments' FY24 Results Highlight Resilience and Growth
PMV (PMV) Share Update September 2024 Tuesday 24th
Premier Investments Reports Strong FY24 Results Amid Challenging Retail Environment
Premier Investments Limited (ASX: PMV) has reported robust financial results for FY24, showcasing resilience and strategic growth in a challenging retail environment.
Instant Summary:
- Statutory FY24 NPAT of $257.9 million; adjusted NPAT of $244.4 million.
- Record final fully franked ordinary dividend of 70 cents per share, up 16.7%.
- Premier Retail FY24 EBIT (post AASB16) of $340.9 million; pre AASB16 EBIT of $325.9 million.
- Global sales of $1.6 billion, down 2.9% from FY23 but up 25.5% from pre-COVID FY19.
- Record Peter Alexander sales of $508.6 million, with UK expansion planned.
- Clean inventory position to start FY25, down $13.3 million from July 2023.
- Strategic review continues, with potential demerger of Peter Alexander and/or Smiggle under consideration.
Financial Performance
Premier Investments Limited reported a statutory net profit after tax (NPAT) of $257.9 million for FY24, with an adjusted NPAT of $244.4 million. The company declared a record final fully franked ordinary dividend of 70 cents per share, marking a 16.7% increase from FY23. This brings the total fully franked ordinary dividend for FY24 to 133 cents per share.
Premier Retail, a key segment of the Group, delivered an EBIT of $340.9 million post-AASB16 and $325.9 million pre-AASB16. Despite a 2.9% decline in global sales to $1.6 billion compared to FY23, sales were up 25.5% from pre-COVID FY19 levels. The gross margin improved by 35 basis points (bps) from FY23 and by 67 bps from FY19.
Brand Performance
Peter Alexander achieved record sales of $508.6 million, surpassing half a billion dollars for the first time. The brand plans to expand into the UK with three stores and a dedicated website by November 2024. Smiggle reported global sales of $296.0 million, facing challenges from increased cost of living pressures but maintaining efficiency with 43 fewer stores than in FY19.
The Group's five Apparel Brands—Just Jeans, Jay Jays, Portmans, Dotti, and Jacqui-E—reported sales of $790.7 million, a 6.4% decrease from FY23. However, improvements in product ranges and inventory management led to better gross margins in the second half of FY24.
Strategic Initiatives
Premier Investments continues to explore strategic opportunities, including a potential combination of its Apparel Brands with Myer Holdings Limited. The Board is also considering the demerger of Peter Alexander and Smiggle, although this is currently on hold pending the outcome of discussions with Myer.
The company maintains a strong balance sheet with investments in Breville Group Limited and Myer Holdings Limited, valued at $981.5 million and $215.3 million respectively. Premier also holds $409.5 million in cash and has property-related debt of $69.0 million.
The strong financial performance and strategic initiatives are likely to positively impact Premier Investments' stock. The increase in dividends and robust EBIT results demonstrate the company's resilience and effective management. The potential combination with Myer and the expansion of Peter Alexander into the UK could further enhance shareholder value.
Investor Reaction:
Analysts are expected to react positively to Premier Investments' strong FY24 results and strategic initiatives. The increase in dividends and the potential for future growth through strategic combinations and brand expansions are likely to bolster investor confidence.
Conclusion:
Investors should keep an eye on Premier Investments' ongoing strategic review and potential demerger plans. The company's strong financial performance and strategic growth initiatives position it well for future success. Consider subscribing to our newsletter for regular updates and in-depth market analysis.