The earnings avalanche rolls on, here’s a roundup of the minor reporters, updated throughout the day as the results come in, then collated here for the week:
Dominoes Pizza (DMP)
The fast food retailer has posted an exceptional HY profit result this morning, leading the share price up by over 8%, with net profit after tax up 23% on the previous period.
It must be remembered that DMP has a large European presence (95 million Euro or $116 million AUD vs $276 million in Aust/NZ sales) and was able to foster very robust growth across this market and locally at around 8%. Perhaps when times seem tough, pizza (and beer) is the best thing? (but not for your health)
Even in currency terms, the company did well, and margins improved both locally and in Europe.
Good news for dividend chasers, as the fully franked interim dividend was increased substantially to 13 cents per share (from 10.4 cents), equating to a 3.1% yield.
And good news for value investors, the Return on Equity (ROE) and balance sheet remains high and stable respectively, with increasing free cash-flow and organic growth.
Although I can’t stand to eat the product, as an investment it certainly is tasty, as management have provided strong guidance of 20% growth in net profit although warn of labour costs rising (except in Europe).
Here is DMP’s share price growth over the last 12 months:
DMP is in a primary uptrend with resistance at $8 per share
The Reject Shop Ltd (TRS)
Discount retailer The Reject Shop, which suffered a major setback last year due to the floods in Queensland, has bounced back with a solid profit for the first half of FY12, up 4% on the previous period at $16.6 million.
Although sales were up 6%, on a like for like comparable stores basis, they fell 1.6% although marginally improved in the second quarter, as the company grew by 10 new stores during the period.
Underlying margins improved somewhat (exarcebated by the once off cost of the floods), helped along by the high AUD, but this was offset by an increasing in costs. Nevertheless free cash-flow has improved significantly alongside net debt, continuing the strong capital management of this business.
The outlook for the small retailer at first glance looks good, with the damaged distribution centre at Ipswich coming back online, and with the general cautious consumer mood, a focus on increasing volumes of cheaper goods. Planning is progressing for the Western Australian expansion in FY13 and 13 new stores to be rolled out and preliminary planning for an online strategy (hurry up!)
In a sea of stressed retailers, the once flooded TRS seems to be a good option, although it does rely upon a high AUD (cheap imports), it has a proven ability to capture the lower end of discount retailing space.
The company gave profit guidance of $19 to 20.5 million for the full year (52 weeks), some 17 to 26% above last years profit. An interim dividend of 24 cents per share was declared, and based on the current share price – up nearly 6% today – the yield equates to 4.5% fully franked.
Classic bullish descending triangle breakout on TRS
Primary Health Care (PRY)
Primary Healthcare announced interim results today, more than doubling net profit compared to the last period, from $20.3 million to $46.3 million, in line with consensus, but the market is not happy Jan, possibly on the Federal Government’s move to means test the private healthcare rebate?
Margins were sustained and grew across most segments, medical centres (GP visits) the standout and contributing to incremental earnings growth.
PRY still has a very modest net debt to equity ratio of around 30% with reduced interest costs helping the balance sheet.
The company increased the interim dividend substantially, from 3 cents to 5 cents per share, fully franked, equating to a 3.6% dividend yield on the current share price, which is strangely down 6% in afternoon trade.
Guidance was given for reduced capital expenditure for the remaining half of FY12 and no change in expected FY12 profit at around $120 to 125 million.
Here is the last 3 years share price performance, where the price remains less than half its post-GFC high above $6 per share, maybe bottoming, but also likely to remain under political pressure for the time being:
Carsales.com (CRZ)
Carsales, the provider of internet based automotive listings, announced a significant rise in net profit for the first half of FY12, up 20% to $33 million compared to the same period a year before.
On the financial side, the company had broad increases in revenue, earnings and cash-flow all in the 20% plus range.
Operationally, CRZ said that enquiries on new cars were up 26%, with total automotive enquiries up 10% pointing to a strong, if stable year for new vehicle sales (look at The Unconventional Economist’s coverage of today’s vehicle sales numbers)
The company continues to completely dominate the online space, with 75% of all time spent by consumers look at vehicle ads on a CRZ platform.
An increased interim dividend of 11.3 cents per share was announced, bringing the current dividend yield to approx. 4.3% on the current share price after lunch, down 1% to $5.01
The company gave an upbeat outlook for the rest of FY12, with new products to come online and expect higher revenue and profit, although note the risk of competitors increasing their attention at grabbing the stonking market share from CRZ.
Here is the share price performance of CRZ, a large descending triangle with support at $4.50 (with one out of line movement during the 2011 correction):
Dexus Property Group (DXS) – not yet reported