Premier Investments (ASX:PMV) doubles profit in FY21, shares trade strong

Highlights

  • Premier Investments announced FY21 group results today on ASX.
  • Despite pandemic led store closures, PMV has managed to post strong results.
  • Group remains optimistic about its newly surging online business.

Owner of retail brands, Premier Investments Limited (ASX:PMV), announced its results for FY21 on ASX today. The Company has recorded an impressive NPAT of AU$271.8 million, up 97.3% from FY-20.

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Despite COVID-19 led disruptions and store closures, the company claims to have delivered strong results. PMV also remains positive about its future and in FY22.

Result Highlights

  • The total group sales for FY-21 were up 18.7% at a record level of AU$1.4 billion, with like for like (LFL) sales growth of 15.9%.
  • PMV’s five apparel brands have delivered a sales growth of 25.3% from FY20 with three-year sales growth of 25.5% from FY18 to FY21.
  • Premier Retail delivered record online sales, growing 36.4% over FY20, contributing 20.8% of total group sales for the year.
  • As a result of strong sales, the gross margin increased 331 bps to 64.3%, i.e., a 25.1% increase in gross profit.
  • Due to operational excellence and strong cost control, the Group could deliver record earnings before interest and tax (EBIT) of AU$351.9 million, moving up 88% from FY-20.
  • Further, PMV’s statutory consolidated net profit after tax (NPAT) grew 97.3% from the previous year and stood at AU$271.8 million for 53 weeks ended 31 July 2021.
  • In addition, Premier’s 2013 strategic decision to invest in its 100% owned Australian Distribution Centre allowed the Group to remain agile for rising online demand fulfilment.
  • As a result, PMV reported cash on hand of AU$523.3 million at the end of FY21.
  • Further, the PMV board has approved a fully franked, final dividend of 46 cents per share (cps), up 27.8% from FY20.
  • The approved final dividend will be payable on 27 January 2022, making full-year dividends per share as 80 cps.

COVID-19 impact and business rebound

  • PMV’s retail store network is still getting impacted by government-mandated store closures from COVID-19. The Group has temporarily closed 661 stores across Australia and New Zealand, representing 56% of its global retail store network. However, the fallout of the sale has been partially mitigated by strong global online sales and rebounding sales from ‘Smiggle’ in Europe.
  • The Group’s online business is experiencing ongoing acceleration with an EBIT margin significantly higher than its store network. Premier’s management group, therefore, remains optimistic about its second quarter. It is positive due to the fast-paced COVID-19 vaccination rollout across Australia and New Zealand.
  • PMV is also looking forward to starting a new chapter with the appointment of new Premier Retail CEO Richard Murray, who has joined the Group on 6 September 2021.

On ASX, PMV shares were spotted trading 4.326% higher than at AU$27.970 per share, with a market cap of AU$4.25 billion at 10:40 AM AEST.

Bottom line

PMV’s business has a strong balance sheet with seven brands and a fast-growing online business. The business is looking for new opportunities to maximize shareholder returns. With its online business surge, PMV claims to remain well placed for maximization of channel profitability amidst the accelerating retail industry restructure.

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