Latest with Consumer Discretionary Stocks – JIN, CKF, LOV, RBD and GEM

Among all the sectors operating in an economy, the consumer discretionary sector is the one that is most prone to the economic movements of a country. This is so because the goods supplied by the consumer discretionary companies are non-essential goods, that the consumer is most likely to give up in case of an economic downturn.

It can also be seen that the consumer discretionary index S&P/ASX 200 Consumer Discretionary Index (XDJ) moves in line with the Australian benchmark index S&P/ASX 200 (XJO). Take a look at the below figure:

XJO and XDJ Performance in 2019, Source: ASX

One can see that both the indices have moved hand-in-hand so far in 2019, with XJO delivering a return of 20.7 per cent, while XDJ generating a return of 24.75 per cent (calculated till 26th September 2019).

Considering this, let us take a look at five consumer discretionary companies listed on the ASX along with their recent updates:

Jumbo Interactive Limited

Australia’s leading digital retailer of charitable and official government lotteries, Jumbo Interactive Limited (ASX: JIN) utilises the state-of-the-art technology to create an entertaining and engaging purchase experience for its customers across a variety of digital platforms. The company was founded in 1995 and introduced e-commerce in Australia after creating and launching one of the globe's first online shopping malls. The company continues to invest in digital marketing technologies, mobile and smartwatch apps for lotteries.

Recent Update

The company released its consolidated Annual report for the year ended 30 June 2019 in August this year. Jumbo notified about an increase of 303 per cent in its share price from $5.00 in FY2018 to $20.15 in FY2019 in the report. The company also mentioned that its Total Transaction Value and Net profit after tax improved by 75 per cent and 125 per cent to $321 million and $26.4 million, respectively, during the period.

The company achieved a massive growth of 64 per cent in its revenue from continuing operations during the period, to $65.2 million.

Stock Performance

As at 12:35 PM AEST on 27th September 2019, JIN is trading higher at $25.180, with a rise of 4.53 per cent and with about 126k shares in rotation. The stock has delivered robust returns of 72.91 per cent and 23.54 per cent during the last six months and three months, respectively. It has also generated a massive return of 230.7 per cent on a YTD basis.

Collins Food Limited

Australian-headquartered Collins Foods Limited (ASX: CKF) is a franchisee of KFC and Taco Bell in Australia, a franchisee of KFC in Germany and the Netherlands, the franchisor for Sizzler in Asia and the owner of Sizzler restaurants in Australia. Collins Foods operates premier brands where people are proud to work and love to eat and aims to become a leading restaurant holding company. The company operates from Queensland and Brisbane.

Recent Update

The company has recently signed a new syndicated facility agreement to refinance its current syndicated debt facilities. Under the agreement, the company’s existing facilities of €60 million and $270 million will be refinanced into revolving facilities, consisting of €80 million and $265 million new facilities.

The company notified that the course of the New Facilities is a blend of three and five years, with €50 million and $180 million maturing by the end of October 2022, and the rest €30 million and $85 million maturing by the end of October 2024.

Stock Performance

CKF is trading higher at $10.21, with a rise of 0.69 per cent (As at 12:35 PM AEST on 27th September 2019). The stock has delivered returns of 42.22 per cent and 21.58 cent in the last six months and three months, respectively.

Lovisa Holdings Limited

Australian-headquartered Lovisa Holdings Limited (ASX: LOV) develops new products with regards to evolving fashion trends. Operating across 390 stores in 15 countries, the company has been engaged in the retail sale of fashion accessories and jewellery. The company usually delivers 150 new styles to its stores each week, giving an exceptional customer service.

Recent Update

The fashion retailer has recently released its consolidated financials for the year ended 30th June 2019. The company notified that its comparable sales reduced by 0.5 per cent; however, it added a net 64 stores during the period, continuing its offshore expansion.

The company reported a strong revenue growth of 15.3 per cent on the prior year, that took its reported revenue to $250.3 million. The company’s revenue has grown substantially from FY2011 to FY2019, witnessing a growth of around 880 per cent. The NPAT and EBITDA of the company rose by 3 per cent and 7.1 per cent on the prior year to $37.0 million and $62.3 million in FY2019.

During the year, the net cash flow from operating activities improved by $8.3 million to $68.9 million. The company recorded a cash balance of $11.2 million at the end of the period.

Stock Performance

LOV is currently trading at $13.230 (As at 12:35 PM AEST on 27th September 2019), with a rise of 0.08 per cent relative to the last closed price. The stock’s market cap was recorded at $1.4 billion, with approximately 105.8 million outstanding shares. The stock has delivered a substantial return of 517.76 per cent since it commenced trading on the ASX.

Restaurant Brands New Zealand Limited

The corporate franchisee, Restaurant Brands New Zealand Limited (ASX: RBD) specialises in the management of multi-site branded food retail chains. As of February 2019, the company had a total of 283 stores, including 61 KFC Australia, 18 Carl's Jr, 94 KFC New Zealand, 30 Pizza Hut New Zealand, 44 Pizza Hut Hawaii and 36 Taco Bell Hawaii stores.

Recent Update

The company has recently released an update on its sales performance for the second quarter of the financial year, i.e. for the 16 weeks ended 9 September 2019. The company reported an increase of 3.5 per cent or $8.8 million in its total sales to $259.7 million during the second quarter. The company notified that each of its operating divisions (Australia, Hawaii and New Zealand) has retained their strong store sales growth with a rise of 5.8 per cent, 9.6 per cent and 5.4 per cent, respectively.

Stock Performance

RBD last traded on 5th August 2019 at $8.80 on the ASX. RBD’s 52-week high value was recorded at $8.80. The stock has delivered returns of12.82 per cent and 12.10 per cent during the last six months and three months, respectively.

G8 Education Limited

The largest child care centre operator in Australia, G8 Education Limited (ASX: GEM) was founded in 2006 and aims to become the leading provider of educational, high quality and developmental child care services in Australia. The company got listed on the Australian Stock Exchange on 5th December 2007.

Recent Update

On 19th September 2019, the company announced an update on its previously announced dividend of 4.75 cents. The company provided the details of the Dividend reinvestment plan that is applicable on its announced dividend. On 26th August 2019, the company declared a fully franked dividend for the period of six months ended 30th June 2019. The dividend is payable on 3rd October 2019. The company has recently declared a DRP price of $2.44720, applicable with a discount rate of 2 per cent.

Take a look at the company’s half?year performance for the period ended 30th June 2019 below:

Stock Performance

GEM is trading higher at $2.570, with a rise of 0.39 per cent relative to the last closed price (As at 12:35 PM AEST on 27th September 2019). The stock’s market cap was recorded at $1.17 billion, with approximately 361k shares in rotation. The stock has generated a substantial return of 2629.7 per cent since it began trading on the ASX. However, its YTD return was recorded at 5.88 per cent.


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