Cellestis - Some quick observations.
I guess everybody has seen the full year figures by now and have made their own assessment. Of course we would all have preferred bigger numbers but the numbers are what they are. Once again, the foreign exchange rates have taken the gloss off our 38% increase in sales, year on year.
If we are a little forward looking we might be greatly encouraged.
Let's make a couple of assumptions.
- That next year we "only" achieve a further 38% sales Growth. (conservative)
- That the A$ gets no "worse". (not unreasonable)
So, that 38% Sales increase would bring our Sales to $56m and Gross Profit to $39m. Let's be generous and allow $20m for expenses. Net profit before tax is therefore $19m and Net profit after tax is $13.3m - a 60% increase year on year.
The Company seems to also be demonstrating that they are not shy about paying a decent dividend. On the above figures it would not be at all unreasonable to expect a full year dividend next year being doubled to 10c.
Of course if our sales increase is more than a "mere" 38% then ....
Thanks again for the encouraging analysis Forrest. I was certainly disappointed in the NPAT (same as 2009), but at least the dividend is increasing, and as you say, should at least double next year.
ReplyDeleteI guess it is another year of waiting and watching the share price come under pressure again.
BTW, is this a typo?
ReplyDelete"means that 7.5% of our Sales dollars flow straight through to the bottom line with no additional expenditure."
Shouldn't it be 75%?
Badger,
ReplyDeleteThanks for your comment.
The subsequent release of the presentation notes has revealed that the apparent increase in GPM is due to an accounting change. Consequently, I have removed the reference to that from the article.
Just between you and me, though, I suspect that the accounting change does disguise a slight increase in GPM. It's just not really possible to prove mathematically. Intuitively, though, the relatively small increase in S,M&B, even with the additional selling expenses added in, tends to support a small increase in GPM. This is to be expected over time.