Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Adairs (ASX:ADH) share price jumps 11% on HY24 result, dividend resumed

The Adairs Ltd (ASX: ADH) share price has soared more than 11% after reporting a promising FY24 first-half result.

This business operates three brands – Adairs, Mocka and Focus on Furniture.

FY24 first half result

Here are some of the highlights from the first six months of FY24:

  • Total sales dropped 6.7% to $302.4 million
  • Gross profit down 2.7% to $142.6 million
  • Cost of doing business (CODB) improved by 0.6% to $107.4 million
  • EBIT (EBIT explained) fell by 13% to $30.9 million
  • Statutory earnings per share down 19.7% to $0.102
  • Interim dividend per share down 37.5% to $0.05

Adairs said it was successful with a number of its key objectives.

It grew its gross profit margin for all three brands, reduced the CODB in the Adairs business and took operational control of the Adairs national distribution centre with no business disruption whilst improving service levels at a lower cost.

Despite the difficult trading environment, Mocka’s EBIT managed to improve by $3.2 million to $3.5 million.

Balance sheet and dividend

Adairs improved its group net debt by $15.4 million over the six months to $58.6 million. It’s good to see that the business is improving its balance sheet.

The company decided to declare an interim dividend of $0.05 per share, fully franked.

Outlook for the Adairs share price

Adairs reported it’s still seeing customer traffic “significantly lower” than the same period last year.

Sales in the first eight weeks of the second half of FY24 “remain challenging”, with consumers remaining “value orientated”. Due to the decline in sales that happened in May 2023, the company is expecting that the comparative sales performance “will improve” in the second half of FY24.

Adairs’ focus remains on managing the gross profit margin, maximising customer sales conversion and managing the CODB.

By the end of FY25, Adairs is expecting to open three new Focus on Furniture stores. With Adairs stores, it’s opening larger stores and “actively managing” smaller stores with several re-locations, up-sizes, consolidations and closures, to maintain a “highly profitable portfolio”.

I think Adairs has a promising next 12 months if it’s able to start demonstrating sales growth, year on year. It’s not the strongest retailer around, but I still think it’s somewhat undervalued on a long-term basis if earnings can rebound once household spending recovers.

It also offers the potential of a good dividend yield in the years ahead, the dividend payments resumed.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

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

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.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content