Premier Investments shares dive on FY profit fall
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More news: Shares in Premier Investments plunged at market open after the retail group posted a drop in full-year profit and delayed its Smiggle demerger.
Premier shares fell 8% to $30.97 by 10:45am AEST but over the last 12 months has surged 22.4%.
E&P’s retail analyst Phillip Kimber said he expects downgrades of around 5% to consensus NPAT estimates in FY25, given Premier's FY24 NPAT result missed forecasts and that the company reported a slow start to FY25.
He noted that Premier's share price has risen by around 10% since the start of August, reflecting improvements in trading conditions for discretionary retailers. However, he expects to see the company's share price come under pressure following the "slightly lower than expected" NPAT result for FY24 and declining sales in early FY25.
Premier Investments FY profit down 4.9% as it delays Smiggle demerger
The news: Retail giant Premier Investments has posted a drop in full-year profit as group sales dropped amid a tough retail trading environment and will delay its Smiggle demerger to focus on its Myer deal.
The numbers: The Solomon Lew-owned retail group said net profit for the 52 weeks to 27 July, 2024, was down 4.85% from a year ago to $257.92 million.
Total revenue was down 2.7% to $1.62 billion. The company will pay a final dividend of 70 cents a share, up from 60 cents a share a year ago.
The context: Chair Solomon Lew said FY24 has been another challenging year for discretionary retail. The group’s brands include Just Jeans, Portmans, Smiggle and Peter Alexander, as well as equity stakes in Myer and appliances group Breville.
Premier said it is continuing discussions with department store chain Myer to take over its apparel business under a proposed all-scrip deal, but will postpone its planned demerger of kids stationery chain Smiggle by the end of January 2025.
The group is still working towards the potential demerger of sleepwear brand Peter Alexander but said the timing will depend on the Myer deal.
What they said: “The board continues to see merit in the potential demerger of Peter Alexander and Smiggle, however, due to the current prioritisation of the proposal received from Myer, the board is no longer working towards the demerger of Smiggle by the end of January 2025,” it told investors.
The sources: ASX announcement, E&P Capital research
