2 Consumer Discretionary Stocks On The Opposite Side Of The ASX Ledger - TPW, GUD

  • Jan 30, 2019 AEDT
  • Team Kalkine
2 Consumer Discretionary Stocks On The Opposite Side Of The ASX Ledger - TPW, GUD

Temple & Webster Group Ltd (ASX: TPW)

Online furniture and homeware retailer, Temple & Webster Group seized the investors’ attention after announcing the top-line growth of 40% with earnings turning to positive figure during the half year ended 31 December 2018. The news sent the stock price to rebound as high as 11.165%, closing at $1.145 on 30 January 2019.

With the release of half-yearly results, the company declared the revenue of $49.3 million for six months ended 31 December 2018. It represents an improvement of 40% year on year basis which eventually led to the delivery of $0.9 million of H1 FY19 EBITDA in comparison to the negative earnings of $0.5 million in the previous corresponding period.

Despite the retail market challenges underpinned by the housing market downturn, the company managed to achieve significant growth in its active customers and revenue per active customer. The company’s contribution margin improved to 16.5% in H1 FY19 from 16.1% in H1 FY18.

Temple & Webster CEO Mark Coulter stated: “Interestingly, the continued strong performance of the company’s furniture categories during the half year suggests that consumers are still willing to spend money on their homes, and that the company’s positioning around affordable beauty is resonating well with its customers.”

The company is reportedly witnessing a strong trade in January with growth exceeding the H1 FY19 growth rate of 40%.

With respect to its forward plans, the company revealed that it aims to launch a mobile app to capitalize on the continued growth of mobile as a primary device, international expansion through a New Zealand pilot, expanding into new categories such as home improvement, and investing further into its B2B Trade & Commercial division.

TPW has witnessed a massive price increment of 171.05% over the past 12 months with an increase of 3% experienced last month.

G.U.D. Holdings Limited (ASX: GUD)

G.U.D. Holdings’ stock fell straight by 9.016% after the company announced 2% decline in its underlying Earnings Before Interest and Tax (EBIT) for the half year ended 31 December 2018, compared to the same period in 2017.

Distributor of automotive filtration, G.U.D. Holdings Limited reported a decent top-line growth of 13% in its revenue from the continuing operation of $220 million for H1 FY19. The company commented that this improvement in revenue is driven by both organic and acquired growth within the Automotive businesses. Further, its net profit after tax (NPAT) increased by 3% to $29.3 million, reflecting the proceeds from the sale of Oates business.

The decline of 2% in the company’s underlying EBIT of $43.9 million in H1 FY19 explains the gap of earnings from discontinued operations that were carried out last year. This further reflects the improvement of 10% in the company’s Underlying EBIT from ‘continuing operations’ of $43.9 million compared to $40.1 million in H1 FY18.

On the back of decent half-yearly performance, G.U.D. Holdings’ Board declared an interim dividend of 25 cents per share fully franked was announced, an increase of 4% on last year’s level. The dividend is reportedly payable on 1 March 2019.

GUD stock price has fallen by 1.93% over the past 12 months.


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