Myer bumps up dividend after posting its best second-half profit in almost 10 years
The commentary from Myer is far from recessionary, posting strong online and in-store sales for FY22
Source: iStock
Mentioned
KEY POINTS
- Myer posted its best full year results since 2018
- The Board declared a 2.5 cent final dividend, which will be paid on Nov 7
- Management said the first six weeks of FY23 have been the "best sales start to a financial year since 2006"
Myer (ASX: MYR) posted its best second-half profit in nearly 10 years, an upbeat result that matches the company's recent share price performance, up more than 100% since June lows.
"The combination of our online performances and our store network returning to growth has allowed us to navigate the early challenges in the year and importantly capitalise on the new opportunities arising," commented CEO John King.
Results at a glance:
Full year | 2022 | 2021 | % Change |
|---|---|---|---|
Total sales ($m) | 2,989.8 | 2,658.3 | 12.5 |
Cost of doing business ($m) | 745.2 | 665.7 | 11.9 |
EBITDA ($m) | 400.0 | 390.0 | 2.6 |
Profit after tax ($m) | 60.2 | 51.7 | 16.5 |
Statutory profit after tax ($m) | 49.0 | 46.4 | 5.7 |
Dividend (cps) | 2.5 | 2 | 25 |
Source: Myer | Table: Market Index
Year in review
Total sales rose 12.5% despite Myer losing 11.4% of its in-store trading days due to mandatory lockdowns.
"Importantly, the second half sales growth of 16.8% has translated into our highest 2H NPAT in almost ten years," said King.
Online sales continued to outperform, up 34% to $722.8m or 24.2% of Group sales. Myer considers its online business growth rate to be "out-pacing many of our peers at a total and category level."
Myer finished FY22 with a cash position of more than $243.9m, a substantial figure relative to the company's market cap of just under $500m.
Missed targets
Still, Myer missed several "challenging performance targets" set by the Board in the previous financial year.
Notably:
Objectives | Assessment | Commentary |
|---|---|---|
Net profit | Exceeded | NPAT threshold target achieved despite lockdowns in FY22 |
Online EBIT | Missed | Online sales growth, while strong, was below stretch transformation objective |
Cost per customer order | Missed | Did not achieve targeted improvement year-on-year |
Department store EBITDA per square metre | Missed | Did not meet the stretch transformation objective due to 1H22 lockdowns and covid impacts |
Stock turn | Missed | More inventory on average was held due to 1H22 covid impacts and to mitigate supply disruptions |
FY23 update
Department store sales growth in the first six weeks of FY23 was up 74.8% compared to FY22 and 21.8% higher than pre-covid levels. Although, Myer flagged that its CBD stores are showing subdued growth relative to the rest of its network.
“The momentum of the Customer First Plan is demonstrated in our best sales start to a financial year since 2006," said CEO John King.
Myer shares is experiencing some selling pressure in early trade, down -3.95%, perhaps understandable given the 100% rally off June lows.
Myer price chart
