GALE Pacific’s Shares Tumble On Downgraded Earnings Guidance

  • Jan 11, 2019 AEDT
  • Team Kalkine
GALE Pacific’s Shares Tumble On Downgraded Earnings Guidance

GALE Pacific’s stock started bleeding on ASX after the company announced lower than previous year’s earnings expectation. At the time of writing, the stock price has declined 7.353% or $0.025 to trade at $0.315 (11 January 2019; 2:33 PM AEST).

In today’s media release, the consumer discretionary company GALE Pacific Limited (ASX: GAP) announced an update on earnings guidance for the six months ended 31 December 2018. The company told it anticipates half-year pre-profit to range between $1.25 - $1.35 million, critically lower than previous corresponding period’s earnings of $1.73 million. 

But in support of its downgraded guidance, GALE Pacific claimed that the actual results had been impacted by lower than projected sales in the Australian retail channel during November and December on the back of colder weather conditions.

Nonetheless, the company continues to hold the optimistic outlook for the entire Fiscal Year performance for FY2019. It stated the second half performance is expected to be substantially more profitable than the first half ended 31 December 2018. Therefore, the company firmly believes that it will deliver earnings per share growth for the 2019 fiscal year.

GALE’s full-year positive outlook is driven by its expectation to experience continued strong growth in the Americas region. As per the company’s information, this growth accounts to Company’s key retail partners that also includes Home Depot and Lowes. Also, the significant broadening in the company’s category store representation forms the second essential factor to contribute to the company’s America's region growth.

The company further informed its continued focus on capital management of the company with its ongoing on-market share buyback program already active. GALE’s update provided on earnings guidance is reportedly based on the company’s unaudited management accounts and is said to be subject to final review.

The final date for the release of GALE’s financial report for the six months ended 31 December 2018 is slated to fall on or around 15 February 2019.

GALE Pacific Limited is a global leading manufacturer and marketer of commercial and branded screening products. The company sells its product to a range of customers including retail and home furnishing, construction, architectural, and agribusiness markets.

For the year ended 30 June 2018, the company posted revenue from continuing operations to $160.5 million, down from $162.0 million in FY17. Its Underlying EBITDA was $19.9 million, delivering a statutory profit after tax of $9.8 million for the year ended 30 June 2018. Further, its underlying basic earnings per share was 3.35 cents/share while dividend per share was 2.00 cents/share.

In today’s trading session, GAP is currently trading at a PE of 10.150 x with a market capitalization of $98.08 million. Over the past 12 months, the stock price declined by 4.23% including a plunge of 2.86% in the past month.


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