Accent Group Limited (ASX: AX1) recently held its Annual General Meeting on 23 November 2018. At the AGM, the company provided its trading update of FY 2019 and also released the revised outlook for FY 2019. Following this news, the share price of the company increased by 12.67 Percent as on 23 November 2018.
The company’s CEO Mr. Daniel Agostinelli told the shareholders at the AGM that the company is focusing on its digital growth and they are opening new stores at a faster rate than anticipated. In FY 2019, the company is targeting to open 40 new stores, and it is also investing in new store concepts and renovation, to bring customers a world-class retail experience.
While talking about the digital growth of the company, he told that the total digital sales of the company grew by 131% during FY18 and to date, the digital sales have increased by 88 percent as compared to last year. While talking about the Athlete’s Foot franchisee stores, Mr. Daniel told that as of now the company owns 39 corporate stores, and it is expecting to finish FY19 with approximately 50 corporate stores.
The company’s chairman Mr. David Gordon highlighted the FY 2018 financial performance at the AGM. He told that the Underlying EBITDA of the company increased by 16% to $90.8 million in FY 2018. Further, the underlying Net Profit After Tax increased by 18% to $47.1 million. Through the repayment of $30 million of debt in FY 2018, the company improves its net debt position. In FY 2018, the earnings per share of the company increased by 17.3% to 8.78 cents. The company paid the full year dividends of 6.75 cents per share which was 12.5% higher than the last year. In FY 2019, the company is expecting a dividend payout ratio of 75% to 80% of net profit after tax. Moreover, the company has delivered a total shareholder return of 177 percent in the last five year.
The company also provided its trading update in which the company reported that in the first 20 Weeks of FY 2019, the LFL sales increased by 2.5% on last year. In those 20 weeks, the company experienced stronger than expected digital growth which was 88 percent higher than last year. The gross margin of the company is 300 bps ahead of the prior year YTD, and LFL margin dollar growth is higher than LFL sales growth.
According to Mr. David Gordon, due to the strong results which are achieved in the first half of FY 2019, the EBITDA for the first half is now expected to be between 15-20% higher than last year. He further told that the outlook for the second half of FY 2019 has not changed and the Group is still targeting mid-single-digit EBITDA growth.
In the last six months, the share price of AX1 decreased by 25.84 percent as on 22 November 2018. AX1’s shares traded at $1.245 with a market capitalization of circa $598.07 million as on 23 November 2018 (AEST 4:00 PM).
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