Is the Premier Investments Limited
(ASX: PMV) share price a bargain after reporting its half year result?
Premier Investments was listed on the ASX in December 1987 to be an investment vehicle to acquire or attain controlling stakes of ‘premier’ Australian companies with a particular focus on retailing, importing and distributing. It has leading retail brands like Smiggle, Peter Alexander, Just Jeans and Jay Jays. It also owns just over 28% of Breville Group Ltd (ASX: BRG).
Here’s What Premier Investments Reported
Premier Investments has reported its result for the half year ending 26 January 2019.
Total sales grew by 8% to $680.2 million with the company’s Apparel Brands delivering sales growth of 7.5%, Just Jeans led the pack with like for like sales growth of 14.6%. Online sales grew by 35.2% compared to the first half of last year, online sales now represent 12.9% of sales.
Smiggle sales grew by 4.8% to $178.8 million, with Asian sales growing by 34.8%. Peter Alexander sales grew by 14.1% to $130.4 million. Management said that the 2020 Growth Plan for Peter Alexander is tracking well ahead of expectations.
The company announced that Premier Retail EBIT (click here to learn what EBIT means) grew by 11.1% to $113.9 million.
Premier Investments’ underlying net profit before tax grew by 10.2% to $121.8 million and reported net profit after tax (NPAT) increased by 13% to $88.8 million.
The retail conglomerate also reminded investors that its balance sheet has a shareholding of Breville Group Ltd (ASX: BRG) worth $602.6 million when the balance sheet shows an equity accounted value of $238.9 million.
Premier Management Comments
Premier Retail CEO Mark McInnes said the result was: “A testament to the Board and Management’s understanding of today’s dynamic retail environment. Online continues to exceed our high expectations”.
Premier Investments Dividend
The retail company’s Board decided to increase the interim ordinary dividend by 13.8% to 33 cents per share.
Is Premier Investments a buy?
Premier Investments remains one of the best retail businesses on the ASX in my opinion. There are a number of promising developments with Smiggle launching in Continental Europe with Amazon as well as the continued growth in Asia, although the company blamed Brexit for the lacklustre growth in this result.
With a 5-year or longer timeframe investment in mind, I think Premier Investments could be a good choice today. It would be my pick of all of the retail shares on the ASX, particularly with the good dividend yield.
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