All That Investors Need To Know About 1HFY19 Results Reported By BWX Limited

All That Investors Need To Know Aabout 1HFY19 Results Reported By BWX Limited

On 22nd February 2019, BWX Limited (ASX: BWX) which is in the business of making branded products of the body, hair and skin care industry with some popular brands like Derma Sukin, Sukin, Uspa and many more, announced its 1H19 results.

The company posted mixed numbers. The revenue of the company increased by 1.4% from $67.2 million in 1H18 to $68.1 million in 1H19. A significant part of the revenue is being contributed by Sukin brand which generated $23.2 million out of the total of $68.1 million. But the highest increase in revenue in percentage terms was through Andalou Naturals brand which increased by a massive 182% from $8.2 million in 1H18 to $23.1 million in 1H19.

There is a dip in the gross profit which decreased by 12.3% from $40.4 million in 1H18 to $35.1 in 1H19. Consequently, there is also a decrease seen in the gross profit margin which decreased from 59.6% in 1H18 to 51.5% in 1H19. Sukin, the company’s highest margin brand took a significant hit.

Reported net profit after tax (NPAT) fell sharply by 51.8% from $5.4 million in 1H18 to $2.6 million in 1H19. The company stated the fall in the NPAT was due to some challenges that they faced during the first half of the year. These challenges included several difficulties in re-set of business, Soft export trading sales to China, Warehouse relocation during which they lost sales and incurred higher cost during transition etc.

Reported EBITDA was down by 40.5% from $12.1 million in 1H18 to $7.2 million in 1H19. Whereas underlying EBITDA also took a hit and fell by 59.5% from $17.5 million in 1H18 to $7.1 million in 1H19 which was in-line with the 2018 December trading update.

Due to a decline in the above numbers, the reported and underlying earnings per share (EPS) also declined by 3.1 cents per share and 7.2 cents per share respectively. However, there was a decent rise in the operating performance including early stages of realisation from the benefits from ERP platform implementation.

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However, the commentary and the future outlook from the management was full of confidence going ahead. After facing several issues in the 1H19, the company believed that the worst is behind and now they are gaining momentum in the transformation. The company did not declare any dividend for 1H19 but stated that the outlook for dividend is to be reviewed at full year result.

After declaring the mixed results, the company was still able to gain investors’ confidence. On 22nd February 2019, the stock of BEX surged by a massive 30% to A$2.1 from the previous closing of A$1.61. This massive interest in the buying of stock after the result announcement evidently shows the investors are still confident in the business and the management and are not disappointed by 1HFY19 faded performance. Although, today the stock is down by 2.38%, trading at A$2.05 (as at 2:40 PM AEST, 25 February 2019).


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