After the announcement of an increase of 86-91% in expected earnings, Myer (ASX.MYR), shares soared to 12-month highs. The group posted a range between $174-179 million and $174-91 million in FY21 earnings.
Although the EBITDA forecast has not been audited and does not include any significant items or implementation expenses, it is still a significant improvement over FY19’s $160.1 million pre-COVID earnings.
Premier Investments (ASX PMV), a minority investor, has been urging appears that Myer has not only increased sales by 5.5 percent to $2.67 trillion, but also its profit margins.
Myer, a long-standing legacy brand, has managed to increase its online sales by 27.7 percent to $539.5million, more than a fifth in revenue.
Net profit after taxes (NPAT), could range anywhere from $47 million to $50 million. Myer managed to increase its net cash position, which was $8 million at June’s end last year, to $112 millions a year later.
This NPAT is less impressive when you consider that Myer received $51million in JobKeeper payments between August and September. The company is not repaying these payments, unlike many of its rivals. Myer spokesperson added that the net wage subsidy received after tax was $32million.
Myer had $18 million in rent- and outgoings waivers during the December half.
It is evident that Myer’s profits without JobKeeper or waivers would have been very low. However, a spokesperson for Myer stresses that Myer would have taken other measures to cut costs in light COVID-19.
This is still a better result than FY20, when Myer’s losses were $11.3 million despite $93million in JobKeeper payments.
Myer’s losses statutory were worse than before COVID-19 was established, with results of $33.2 million in the black in FY19.
Myer claims it expects to return at the second half of NPAT profitability for first time since FY17. It is estimated that Myer will spend between $4-7 million. This was not possible without JobKeeper or rent waivers. However, there was a significant improvement in performance despite the lockdowns.
CEO John King stated today that “our Customer First Strategy continues its momentum, delivering an significantly improved full-year profit result despite the ongoing COVID effects in FY21.”
“We will provide additional commentary at our September audited results announcement.”
MYR shares were at $0.515 per share at the time of writing, an increase of 9.57 percent from $0.29 at 2021 and just below their $0.475 levels at 2020.