On 18 January 2019, Gazal Corporation Limited (ASX: GZL), a retailer and the supplier of branded apparels in Australia announced its recent trading results and EBITDA guidance for the full year ending 2 February 2019. In November and December, which is the critical months of sales in Australia, the report says that the sales in the PVH brands were above the expectations. Based on the report, GZL expects that their EBITDA by the end of 2 February 2019 will be in the range of $29 million to $31 million. The calculation of the EBITDA lying in the range mentioned above is done by summation of 50% of the JV’s EBITDA and the total EBITDA of Gazal’s Corporate & Property Services. Last year, the EBITDA by 3 February 2018 was $19.8 million.
The increase in the EBITDA was due to a rise in demand of brands Calvin Klein and Tommy Hilfiger which in turn increased the business of these brands.
The official listing of GZL on ASX is 29 April 1965 where the company performance is consistently positive. Since its inception, GZL’s performance was 262.43%. In 10 years, the performance of the company was 248.49%. GZL’S last one-year performance was 84.62%.
As per the consolidated financial report for the half year ended 4 August 2018, GZL made a net profit of $4.322 million. The balance sheet of the company appears to be healthy with a net asset base of $96.541 million and a debt-equity ratio of 0.53. It indicates that GZL is financially sound to meet its long-term obligations. The debt-equity ratio of 0.53 suggests that the company used its resources and assets majorly for any financial requirement during the period. However, GZL has a total current asset of $4.222 million and a total current liabilities of $7.657 million which indicates that the company at present is not in a position to meet its working capital requirements and clear its short-term debt. Total shareholders’ equity is worth $96.541 million.
By the end of the FY2018, which ended on 4 August 2018, there was a decrease in the net cash and cash equivalent by $3.110 million as result of increased cash outflows through the financing activities as the company made payment for the share buy-back and also made the dividend payment. The company had a negative cash balance by the end of the period.
Based on its past performance and the recent trading update by the end of the trading on 18 January 2019, the share price of GZL zoomed up by 19.167%. The closing price of the share was A$4.290 which is 0.690 points above its previous trading day’s closing price with the market capitalization of $44.65 million and PE ratio of 21.35x.
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