Premier Investments (PMV) shares jumped more than 12% at one stage yesterday, hitting an all time high of $12.72 after the company revealed it would reward shareholders with a special dividend, on top of the normal interim payout.
Premier, chaired by Solomon Lew and with CEO former David Jones boss Mark McInnes, yesterday reported a modest 9% rise profit to $56.8 million for the six months to January 24.
That was on a modest 4.2% rise in revenue for the owner of brands Peter Alexander, Dotti and Portmans to $497 million for the six months. Like for like sales edged up an equally modest 1.1%.
Premier declared a 21¢ interim dividend (up one cent a share from a year earlier) and 9¢ special dividend, fully franked.
The news of the one off payment sparked a surge in the shares and they charged higher in the morning, peaking at the all time high, before easing to end the day at $12.55, up 11.1%.
PMV 1Y – Premier first-half profit up 9%
The company had $286 million cash at the end of January 24, and a stake in listed appliance maker Breville worth more than $250 million.
Earnings profit rose 14%, thanks to “strong sales growth, margin expansion and a well-managed cost base in addition to the contribution of new growth platforms identified for online Peter Alexander and Smiggle.
Mr Lew said the result was an "excellent" one in a "challenging market in which consumer confidence remains volatile. Management achieved top line sales growth, disciplined cost management and continued margin expansion.”
Premier’s various chains opened 28 stores in the first half, and there are plans to open 21 this half year.
The company said it would launch a UK online store for its stationary business Smiggle later this month, and would open 14 Smiggle stores in the UK this calendar year, in addition to its 19 existing stores.
It does not break out revenue figures for online but said Premier Retail’s online sales growth was up 29.5% over the past 12 months.
It said it would open five Peter Alexander stores this half, and up to 15 stores in Australia and New Zealand next financial year, as well as potentially expanding its stores in Chadstone and Bondi.
Smiggle was again the star for Premier, reporting sales growth of 18.9% for the half, while Peter Alexander saw total sales growth of 14.6% in the period.
So it’s no wonder the two chains are absorbing a lot of the company’s money in new store expansion.
Premier said in an ASX announcement it would “continue to consider capital management initiatives in the future”.
“Premier continues to use its strong balance sheet to fund the expansion of its growth brands, while still retaining the flexibility to pursue other opportunities that may arise in the future,” the company said.
