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FY21 result: BWX (ASX:BWX) share price halted for acquisition

The BWX Ltd (ASX: BWX) share price is currently halted after reporting its FY21 result and announcing an acquisition.

BWX is a large natural beauty business with a number of different brands such as Sukin.

FY21 result

The natural beauty business announced that reported revenue increased by 3.4% to $194.1 million.

Adjusted for constant currency and equity-linked strategic partnership with Chemist Warehouse, revenue increased by 8.6% to $203.9 million.

Sukin was the standout performer, with year on year revenue growth of 16% to $95 million. However, both Andalou Naturals and Mineral Fusion saw sales decline.

The gross profit margin went up 134 basis points (1.34%) to 59.3%. This helped EBITDA (EBITDA explained) increase by 11.5% to $34.5 million, which was ahead of guidance.

Statutory net profit after tax (NPAT) surged 60.9% to $23.7 million. Earnings per share (EPS) increased by 44.9% to 17.1 cents.

BWX has continued its investment in scaling its direct-to-consumer model, which represented 29% of FY21 revenue.

Its new operations and manufacturing facility is “within budget and on track” to open at the end of the 2021 calendar year.


The board declared a fully franked final dividend of 3.1 cents per share. That brings the full year dividend to 4.1 cents per share – an increase of 5%.

BWX’s investment in Go-To Skincare

The natural beauty business has entered into a deal to buy 50.1% of Go-To Skincare for approximately $89 million. This deal represents a FY21 enterprise value to EBITDA multiple 14.9 times before synergies and 11.9 times after synergies.

This business is an Australian skincare provider with a range of products for the ‘masstige’ market. In FY21 it generated $36.8 million of revenue and $11.6 million of EBITDA.

Go-To found Zoe Foster Blake will remain as a strategic shareholder, chief creative officer and board director. Other co-founders will also remain in the partnership.

The business will remain as an independently operated, standalone, founder-led brand, leveraging BWX expertise and capability in certain areas.

BWX said it’s a compelling opportunity to collaborate with one of Australia’s leading skincare entrepreneurs and support its ongoing growth.

After $3 million of potential synergies, this is expected to add to EPS in the double digits.

It’s going to be funded by a $100 million capital raising from investors.

Outlook for BWX and the share price

COVID-19 continues to cause volatility for the business.

It’s expecting to benefit from a number of areas such as a full year contribution from Woolworths Group Ltd (ASX: WOW) which started in the second half of FY21, a full year contribution from Flora and Fauna, continued performance from direct to consumer operations, full year benefits from the Chemist Warehouse partnership and recent distribution gains achieved in retail channels.

BWX seems like a good business to benefit from a growing trend towards natural products. It seems to making a number of acquisitions, hopefully they can all be integrated successfully. More brands may distract management.

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