Search ASX code:
Generic filters

Search ASX code:
Generic filters

Search ASX code:
Generic filters

Want to invest ethically for a brighter future?
(but still make lots of money)?

Want to invest ethically for a brighter future? (but still make lots of money)?

 Take Rask’s FREE Ethical Investing course today.

  • Online & 100% free
  • ETFs, shares & Super
Want to invest ethically for a brighter future? 
(but still make lots of money)?

 Take Rask’s FREE online Ethical Investing course.

Is the Globe (ASX:GLB) share price a buy after strong growth in HY21?

The Globe International Limited (ASX: GLB) share price finished the day flat despite releasing impressive revenue and profit growth for the half-year ended 31 December 2020.

I was slightly surprised by the lack of share price movement, but it’s important to note that the stock has rallied quite hard recently and is up over 85% since the start of the year.

Additionally, today’s earnings results were pretty much in line with the company’s previous trading update which was released in January.

GLB share price chart

Source: Rask Media 1-year GLB share price chart

Globe’s key highlights

Across the board, Globe reported sales of $124.8 million, up 60% on the prior corresponding period (pcp).

Its key brands of Impala, Globe, FXD and Salty Crew were said to be performing strongly even before the onset of COVID-19. Nonetheless, these results confirm the upwards trajectory of the retailer’s core brands, with its standout geographic region being North America, experiencing almost double the number of sales on the prior period.

EBIT came in at $21 million, up from $4.2 million in the pcp, and net profit after tax (NPAT) jumped to $15.3 million, an increase of 300% on the prior period.

Globe declared a fully franked interim dividend of 12 cents per share, an increase of 140% compared to the 2020 interim dividend, which was 5 cents and unfranked.

Profit drivers

Globe management indicated that its increase in EBIT was the result of a combined impact of a spike in sales volume, as well as increased gross profit margins, which came in at 43.2%, up 5.6 points over the pcp.

A significant boost in online sales also helped Globe’s bottom line, which was further strengthened by a weaker USD along with a shift towards higher-margin hardgoods products.

Cash flow from operations was reported to be $17.8 million for the period, with only a $3.8 million increase in working capital despite the much larger jump in sales. Management has said that its low inventory and receivables balance is a strong indication of the underlying demand for its products.

My take

I think this was a pleasing result, and I’d happily be a buyer of Globe’s shares today, as I think it’s a well-run company with some evidence that its recent performance hasn’t been a one-off result.

For some more reading on Globe’s shares, click here to read: Is Globe International (ASX: GLB) the best ASX retailer right now?.

1 ASX Stock to Buy RIGHT NOW...

Rask's top analyst has just identified his #1 'MedTech' stock idea for 2021 and beyond. This is a SERIOUS growth stock.

CLICK HERE to get the ASX stock ticker code, 3,500-word analysis and ASX founder interview!

Our expert investment reports are 100% free.

Simply click here or enter your email below. We'll send you the report.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Rask's top analyst has just identified his #1 'MedTech' stock idea for 2021 and beyond. This is a SERIOUS growth stock.

CLICK HERE to get the ASX stock ticker code, 3,500-word analysis and ASX founder interview!

Our expert investment reports are 100% free.

Simply click here or the button below. We'll email you the report.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading: