Shekel Brainweigh Limited (ASX:SBW) has reported H1 FY22 sales growth of 23.5% to US$13.1m, which included ~165% growth in Retail Innovation sales to $US1.0m. We estimate an adjusted EBITDA loss (before amortisation, one-off costs and share-based payments) of US$1.6m, slightly above the US$1.5m in the pcp on the back of gross margin pressures (down ~240bps) due to supply chain/freight costs. Relative to our selected peers this is a solid effort with the likes of (ASX:RVS) down 770bps, (ASX:AMS) down 770bps and (ASX:PVS) a whopping 3,960bps. Some key orders including the first Smart Cart order (US$1.6m) and a second order from Belgium retailer Colruyt were also delayed for these reasons and are now due in H2 CY22. SBW has also managed inventory well relative to peers and now has a superior WC/sales ratio. From a valuation perspective we continue to highlight a negative A$11.6m value for the Retail Innovation division if we assume 8x adjusted CY21a EBIT of US$2.9m (A$4.2m) for the Scales division. This is despite a number of new products at or near commercialisation, evidenced by three consecutive halves of growth. Our DCF valuation is A$0.37/share.
07 Sep 2022
Holding underlying earnigns despite COGS pressures/R&D
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Holding underlying earnigns despite COGS pressures/R&D
Shekel Brainweigh Ltd. (SBW:ASX) | 0 0 0.0%
- Published:
07 Sep 2022 -
Author:
Finola Burke | John Burgess -
Pages:
14
Shekel Brainweigh Limited (ASX:SBW) has reported H1 FY22 sales growth of 23.5% to US$13.1m, which included ~165% growth in Retail Innovation sales to $US1.0m. We estimate an adjusted EBITDA loss (before amortisation, one-off costs and share-based payments) of US$1.6m, slightly above the US$1.5m in the pcp on the back of gross margin pressures (down ~240bps) due to supply chain/freight costs. Relative to our selected peers this is a solid effort with the likes of (ASX:RVS) down 770bps, (ASX:AMS) down 770bps and (ASX:PVS) a whopping 3,960bps. Some key orders including the first Smart Cart order (US$1.6m) and a second order from Belgium retailer Colruyt were also delayed for these reasons and are now due in H2 CY22. SBW has also managed inventory well relative to peers and now has a superior WC/sales ratio. From a valuation perspective we continue to highlight a negative A$11.6m value for the Retail Innovation division if we assume 8x adjusted CY21a EBIT of US$2.9m (A$4.2m) for the Scales division. This is despite a number of new products at or near commercialisation, evidenced by three consecutive halves of growth. Our DCF valuation is A$0.37/share.