Noni B group (ASX: NBL) has noticed significant transformation after the acquisition of five well-known fashion brands - Millers, Katies, Crossroads, Autograph and Rivers from Specialty Fashion Group. NBL now holds a very strong market position that is well seen on the financial performance of the group.
Despite a tough market scenario being witnessed by the entire retail segment, NBL group recorded 4.5% growth in its like for like sales, strong increment in its cash flow and a growth of approximately 62.7% from the underlying EBITDA to $37.2m was reported under its performance till July 1, 2018 when NBL had only four brands - Noni B, Rockmans, W. Lane and beme. Group revenue reported 17.6% growth to $372.4m from the previous year, statutory after-tax profit grew by 431.6% to $17.3 million as compared with $3.3 million in FY17. Earnings per share grew to 21.3 cents, up from 4.6 cents paid fully franked dividends of 13 cents per shares when compared to 4 cents per share in the previous year. NBL will maintain its policy of dividend ratio to be in ratio between 60%-70%. Sales through the online channels reported significant growth and was witnessed by all four brands, with group online revenue posting an increase of almost 67.8% as compared to the previous year, representing 5.8% of total sales.
NBL group with its integration with the Pretty Fashion Group and the original Noni B business was successful in achieving the forecasted synergies predicted in the year FY17 and laid strong foundation for the group future performance. Strong financial performance backed by strong operational efficiencies made possible to enhance customer experience across all the brands in FY18.During the year NBL group has increased the seasonal stock and reset the purchase pathways to make it easy for the customers to shop. NBL also introduced new store concepts for the Noni B and beme brands. NBL has increased its focus towards the investment in its online team to tap the full opportunities that online channels offer. NBL has launched its collections across multiple marketplaces such as Amazon and eBay throughout the year.
NBL after its acquisition of the Specialty brands has successfully achieved annualized merger benefit of $30 million which is well ahead of its expectations. NBL is of the view that Specialty brands will generate a positive EBITDA for the FY2019. NBL group is of the view that full year benefit of the synergies will be seen under FY2020 results, along with the improvement in gross margin and EBITDA to show significant increase to $75m, approximately double the Group’s earning in the FY2018.
NBL continuing with its strong performance and guided estimates, is on its upside rally making more than 21% up move from its previous close and currently trading at the levels of $3.00 as at November 22, 2018.
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