# BLX - Beacon Lighting Group



## System (28 March 2014)

Beacon Lighting is Australia's largest and leading specialist retailer of lighting, ceiling fans and light globes with 71  owned stores, 14 franchised stores and four commercial sales offices. Many of the products offered are exclusive to Beacon Lighting and encompass both fashion and design elements pursuing the latest technology for energy efficiency.

http://www.beaconlightinggroup.com.au

It is anticipated that Beacon Lighting Group Limited (BLX) will list on the ASX on April 15th, 2014.


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## Ves (28 March 2014)

*Re: BLX - Beacon Lighting Group IPO*

Looks interesting on numbers alone.

From the prospectus:   EBIT margin fairly flat 2012, 2013 and 2014 forecast,  from 10.5% to 11.5%

Gross margin looks predictable enough,   average 65% for the same years

Return on Invested Capital is around 47% for the 2014 forecast period based on the proforma balance sheet as at 31 December 2013.

Does any know much about this company?    I haven't had much experience with it personally,  but certainly have seen their stores over the years.   They now have a store footprint of about 80.   You would wonder how many they could roll out before they reach saturation & also the impact that the big hardware stores (Bunnings, Masters and Mitre 10) will have on their profitability going forward.

12.5 P/E with no debt does not look super demanding for a business that appears to have a moat and perhaps some opportunity to deploy further capital into it.


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## Faramir (28 March 2014)

*Re: BLX - Beacon Lighting Group IPO*

Thank you Admin for posting BLX. I was about to make request. I posted off my cheque to buy my very small lot of shares 3 days ago. Wished I had more money to buy more. I am waiting for 15 April when it floats.

Not knowing much (if anything) about investing and especially trading, I like these stores. I only brought 2 or 3 desk lamps. Great service. I was impressed with their store layout, range of lighting products and knowledge of staff. I think people doing renovations, etc will want a lighting specialist rather than your run of the mill hardware store. They advertise more than any other lighting specialist. I think they are aiming for a niche market.

I didn't understand Page 56?? of the prospectus. So I rang reception and she put me onto their CFO. He cleared a few things up for me. I was very happy that he was willing to speak to me - just your average uninformed investor.

Wow, my first comment about a stock and I am such a newbie at this. I guess I will know if I made the correct decision after 5 years. I know my first  1,000 shares I brought at $1.95 on Tue 11 Mar are now $1.70 or somewhere around there. That's my track record so far!


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## ROE (28 March 2014)

*Re: BLX - Beacon Lighting Group IPO*



Ves said:


> Does any know much about this company?    I haven't had much experience with it personally,  but certainly have seen their stores over the years.   They now have a store footprint of about 80.   You would wonder how many they could roll out before they reach saturation & also the impact that the big hardware stores (Bunnings, Masters and Mitre 10) will have on their profitability going forward.
> .




Heard of them never bought anything from them, I just get stuff from local hardware.
I think it may appeal to renovator or new building, the rest of the people just get their stuff
from local hardware.


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## Faramir (14 April 2014)

*Re: BLX - Beacon Lighting Group IPO*

I am angry.  I am sad. 



I MISSED OUT!!

I posted off my cheque a few weeks ago and they have refunded me. I am missing out on IPO. It was supposed to be my second set of shares. Rang the 1300 number and he said only those 'invited' were able to get shares. They posted it online for the public to see for legal reasons. This IPO received AFR coverage, see page 39 of weekend edition. How could I miss out????

I am not sure if I will buy any BLX shares tomorrow when it floats. Not willing to pay more than $0.66/share.

The other IPOs did not look good and this was the only one I was hoping off.

Is anyone more fortunate than me? Did anyone apply for this IPO? Will I ever make a decent purchase?

Either I was so stupid that I missed the big bold writing stating: "Only those Invited can Apply" or somehow I made a mistake somewhere.


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## Faramir (14 April 2014)

*Re: BLX - Beacon Lighting Group IPO*

Just read "Shredding Light on IPOs" I have calm down a bit now.

https://www.aussiestockforums.com/forums/showthread.php?t=17514

It was a better float than the others. Not much I can do now.


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## peaceofmind (15 April 2014)

*Re: BLX - Beacon Lighting Group IPO*

can't understand the hype on this one. $1.05 or 60% premium is very generous for a retailer middleman. Its just in specialty light retailing which is a niche type market - only $150m in sales, not huge brand awareness and subject to competition from woolworths and wesfarmers ltd.

this market is in a very dangerous bubble at the moment.


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## McLovin (15 April 2014)

*Re: BLX - Beacon Lighting Group IPO*



Ves said:


> 12.5 P/E with no debt does not look super demanding for a business that appears to have a moat and perhaps some opportunity to deploy further capital into it.




How's it looking now...

Given the sp jump on debut pe is out at 20x earnings.

Six new stores each year over the next five years. Revenue growth over the last decade has been very impressive indeed (~$30m to $150m). They look to be the dominant player in their market already, so hard to see how the mature dominant player in a mature market can keep growing, although I note they are selling their products wholesale in Europe. They'll probably get a kick along if new home starts continue to strengthen (it's a decent effort on their part that they've managed to continue growing sales even with new home starts falling for the last few years) and if negative gearing is wound back on existing homes then this might be in an interesting way to play off the possible shift into new home construction that might bring.

It looked good on the float, but far too rich for me to do anything but watch and see.

Oh and some of their competitors have great punning names: De Lights, Lightingales, Chandelerium.



			
				peaceofmind said:
			
		

> $1.05 or 60% premium is very generous for a retailer middleman.




They actually design and source their own products. That's one of their claimed competitive advantages.


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## Ves (15 April 2014)

*Re: BLX - Beacon Lighting Group IPO*



McLovin said:


> How's it looking now...



Don't you love it when you find IPOs like this that you can't actually do much about until the market gets carried away?

Another one for the long-term watch list if nothing else.


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## peaceofmind (15 April 2014)

*Re: BLX - Beacon Lighting Group IPO*

mature market in a limited area. its not a growth area, its niche and subject to competition from the name brand retailers.
its not a manufacturer.

market has totally gone into another dimension in 2013, and 2014. very high multiples for small cap companies that have no guarantee of existence in the future


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## Faramir (15 April 2014)

Hi all

After yesterday's rant, should I feel disappointed? I applied for shares at $0.66. I missed out and it opened at over $0.97??? It must be over $1.05??? at the moment.
Yes it might be a bubble, yes long term prospects are not as strong I thought it might be. I am not prepared to pay the current price. It might go up even more and I might look even more silly. Still I think today's price is a bit high.

I guess I will hold off and learn my lesson about the one that got away. Next time I will learn much more about the process of IPOs. Excluding Veda, OzForex, it was one of the best IPOs in the past two-three months (in my inexperienced opinion.) I hope I read my next opportunity much better than I read this one. It was my first attempt in getting an IPO.


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## tinhat (4 January 2015)

This just came up in a technical scan. Price has jumped on a very positive trading update.ROA and ROE are very impressive figures. Price jumped up on very little volume so it might be a tightly held stock.


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## piggybank (18 May 2016)

The wife and I purchased a couple of fan/light a few months ago and used one of their recommended electricians to wire them up - Beacon give you an extra year's warranty if you use them and they weren't that expensive compared to quotes we got elsewhere!!

The price got hammered today by 21% to close at $1.26 on a turnover of 8.8 million. An update came out today talking of sales being softer due to some factors

http://www.stocknessmonster.com/news-item?S=BLX&E=ASX&N=443555


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## aus_trader (21 December 2019)

Purchased a parcel of Beacon Lighting Group Ltd (BLX) shares for the Speculative Stock Portfolio. Details of purchase and reasons are in that thread.


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## finicky (28 January 2020)

Not sure I like it yet but might attract if it falls to around a dollar?  I will be watching it on a chart anyway. It's lost the solar lighting business that Tony Featherstone thought held growth promise - he also mentioned BLX's street lighting enterprise in the same context
The afr article quoted below says to expect broker downgrades over the next month. Foreshadowed result doesn't look too bad with revenue and reporting profit actually making a small increase but underlying H1 profit expected to fall 22% on past year.

*Beacon Lighting profit hit by weaker $A, bushfires*

The housing recovery can't come fast enough for lighting retailer Beacon *(BLX)* which has warned that underlying first-half profits will fall about 22 per cent as sales and margins come under pressure.

Beacon, which owns about 113 stores around Australia, said underlying net profit was expected to fall 21.7 per cent to $9 million in the six months ending December due to the weaker Australian dollar, subdued consumer confidence, disruption from bushfires and a poor performance from its emerging businesses.

However, chief executive Glen Robinson said the retailer was well placed to benefit from improved conditions in the housing market in the June-half.

The guidance fell well short of consensus forecasts around $10.8 million and is likely to lead to a spate of broker downgrades before Beacon releases audited results next month.

Group sales rose 2.4 per cent to $123.1 million in the December-half, compared with sales growth of 4.8 per cent in the year-ago period.

But gross margins fell to 64.7 per cent from 66.7 per cent as Beacon struggled to raise prices to offset the impact of the weaker Australian dollar, which has fallen from around US71¢ to around US68¢.

Beacon expects December-half bottom line net profit to rise about 9.5 per cent to $12.7 million, boosted by a $5.4 million one-off net gain on the sale and leaseback of its Parkinson distribution centre and a $500,000 gain from changes to lease accounting rules.

These gains will be partially offset by a $2.3 million loss incurred in closing Beacon's solar energy business.

Beacon (BLX) is the fourth* listed retailer to issue a profit warning this year as bushfires, smoke haze and drought crimp already-weak consumer spending.

(*Others mentioned: SUL, MOZ, KGN)

All Data Weekly


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## finicky (28 January 2020)

Here's what Tony Featherstone was saying about BLX in a broader positive article about Homewares stocks published Jan 20 on Nabtrade:

"*Beacon Lighting Group* also deserves a spot on portfolio watchlists of experienced investors who are comfortable with micro-caps. Beacon announced record sales of $241 million in FY19, up 2.5% on a year earlier, but after-tax net profit fell 17% to $16.2 million.

Interesting in home-lighting seems to build each year as homeowners spend more on trendy lamps and overhead lights. Beacon has a good brand in lighting, 113 stores and 433,000 customers in its database. The company has overseas growth opportunities and its emerging businesses in solar lighting and street lighting are growing quickly.

I suspect the market is overlooking Beacon’s operational progress, as often happens with micro-cap companies that disappoint with profit downgrades. Few broking firms cover Beacon and it seems to have lost market profile in the past few years.

That could be an opportunity for private equity to acquire Beacon, privatise it, restructure the business and bring it back to the market in a few years at a higher valuation. That’s all speculation, of course, but Beacon should shine a little brighter in 2020 as the property market recovers."


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## finicky (18 June 2020)

*FY2020 Underlying Profit Guidance*
Despite the current uncertainties and given the strong sales results in H2 FY2020, *the Beacon Lighting Group Underlying Net Profit After Tax result *(excluding the impact of Parkinson Distribution Centre sale, the Beacon Energy Solutions closure and AASB 16 Leases impact) *in FY2020 will exceed the Underlying Net Profit After Tax result of $16.5 million in FY2019.
*
Not Held

2 Yr Weekly


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## Dona Ferentes (17 December 2020)

_Throughout H1 FY2021, retail trading conditions have continued to be supportive of sales for Beacon Lighting stores. The trading conditions have been reflected in improved store, online and trade traffic which has resulted in a strong sales performance year to date. Beacon International sales also continue to be exciting for the *Beacon Lighting Group. * 

Despite potential uncertainty ahead in consumer spending, the Beacon Lighting Group has now provided the following guidance for the 26 weeks ending 27 December 2020.  _

Group Sales
H1 FY2021 Guidance ... $147.0m to $152.0m
H1 FY2020 Actual ........ $122.5m

Net Profit After Tax
H1 FY2021 Guidance ... $19.5m to $21.5m
H1 FY2020 Actual ......... $9.5m

 *H1 FY2020 underlying result excludes the impact of Beacon Energy Solutions and the sale of the Parkinson Distribution Centre.   

Commenting on the trading update, Beacon Lighting Group CEO Glen Robinson said,







> “_we are very fortunate to be in a retail category which has seen terrific momentum in a period which has been very difficult for so many businesses in Australia and around the world..."_




Also, small beer, but Beacon, _a distributor of the GSM-I products and has invested in the capital raise (total $4mill) of_ *Quantify Technology Holdings Limited (ASX:QFY)*_ ,  which does IoT smart home technology and services the home automation sector. QFY entered into a Binding Terms Sheet for the acquisition of 100% of the share capital of GSM Innovations Pty Ltd, a wholly owned subsidiary of Gerard Private Holdings (Finance) Pty Ltd._


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## tinhat (17 December 2020)

Dona Ferentes said:


> _Throughout H1 FY2021, retail trading conditions have continued to be supportive of sales for Beacon Lighting stores. The trading conditions have been reflected in improved store, online and trade traffic which has resulted in a strong sales performance year to date. Beacon International sales also continue to be exciting for the *Beacon Lighting Group. *
> 
> Despite potential uncertainty ahead in consumer spending, the Beacon Lighting Group has now provided the following guidance for the 26 weeks ending 27 December 2020.  _
> 
> ...




Do you seriously think that wealth is build through selling light fittings. People like you are lazy. The world will run you over.


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## aus_trader (22 December 2020)

I think it's running up on two factors:
1. Covid recovery
2. Retail mania, just look at other retail stock prices/charts

However there may not be as much innovation or multi-decade growth potential in it as would be the case for a tech startup or innovative micro cap.

I think in this lighting space there might be some potential for Aussie small cap Buddy Technologies Ltd (BUD) to become something big if they get their smart lighting products to a worldwide success...


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## darien44 (21 July 2021)

Took a cursory look at this company. The ROE and profit margin seems quite high for a brick and mortar retailer selling light fittings. 

According to my calculations, it has a very impressive free cash flow yield of 20%. The company has little debt, has increased it's dividend 5 times in the last 10 years and yields about 4% with a payout ratio of just 36%.

Is this stock unusually cheap or am I missing something obvious?


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## divs4ever (22 July 2021)

darien44 said:


> Took a cursory look at this company. The ROE and profit margin seems quite high for a brick and mortar retailer selling light fittings.
> 
> According to my calculations, it has a very impressive free cash flow yield of 20%. The company has little debt, has increased it's dividend 5 times in the last 10 years and yields about 4% with a payout ratio of just 36%.
> 
> Is this stock unusually cheap or am I missing something obvious?



 had never particularly thought about this stock until 5 minutes ago 

my uninformed opinion 

 the public would see it as 'bricks and mortar  retailer  .. but i hold WES , BWP , JYC  and SUL , and ask if BLX is performing like a home reno stock  ??

 remember that old quote about a polling machine v. a weighing machine ( in the market )

 so given the lock-downs AND housing bubble  , has this got more to run ,  while home quarantines  allow a house  prettied up for sale  ??

an  after-thought ,  check if any anns about renegotiating  the rents  , that would give you some guide , if they can pay full rents they could be cruising very nicely 

 cheers


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## aus_trader (22 July 2021)

Any company that is riding on the back of the housing / building boom 2.0 is going to benefit and have it's share price increase and BLX is one of them. So if you have enjoyed the share price gains and dividends, well done.   

It's easy to feel left out of the massive real estate boom 2.0 that has yet again doubled up the homes in capital cities in such a flash during the pandemic, if we were not in the right stocks like BLX to piggy back on.

Well, in the Speculative Stock Portfolio we have hitched a ride on the same boom with a building material stock CSR and have recently sold out for a healthy gain and enjoyed the bountiful dividends during the holding period.


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## darien44 (22 July 2021)

aus_trader said:


> Any company that is riding on the back of the housing / building boom 2.0 is going to benefit and have it's share price increase and BLX is one of them. So if you have enjoyed the share price gains and dividends, well done.
> 
> It's easy to feel left out of the massive real estate boom 2.0 that has yet again doubled up the homes in capital cities in such a flash during the pandemic, if we were not in the right stocks like BLX to piggy back on.
> 
> Well, in the Speculative Stock Portfolio we have hitched a ride on the same boom with a building material stock CSR and have recently sold out for a healthy gain and enjoyed






aus_trader said:


> Any company that is riding on the back of the housing / building boom 2.0 is going to benefit and have it's share price increase and BLX is one of them. So if you have enjoyed the share price gains and dividends, well done.
> 
> It's easy to feel left out of the massive real estate boom 2.0 that has yet again doubled up the homes in capital cities in such a flash during the pandemic, if we were not in the right stocks like BLX to piggy back on.
> 
> Well, in the Speculative Stock Portfolio we have hitched a ride on the same boom with a building material stock CSR and have recently sold out for a healthy gain and enjoyed the bountiful dividends during the holding period.



Interesting, thanks. So other than benefiting from a short term covid tailwind, is there anything that would make this company a worthy longer term investment?


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## divs4ever (22 July 2021)

darien44 said:


> Interesting, thanks. So other than benefiting from a short term covid tailwind, is there anything that would make this company a worthy longer term investment?



 now that is the hard question  , can the management use the tailwind sensibly , many other companies chockful of ego and confidence  speed straight into a brick wall , and relax and let their brains go on an extended holiday  ( and those were BIG companies with plenty of experience in the ranks )

 so if trying to outguess the management isn't your thing  , what about their industry  , can it do MORE than just survive  ,  10 years ago i would have a lot more positive  , but now we are seeing extraordinary interventions by  politicians and regulators  ,   for instance i remember one workplace INSISTED a fully licensed electician replaced flourescent light tubes  ..sadly we didn't have one on staff and a former Mount Isa Mines electrical engineer  was deemed unacceptable  ( and would have done it between the other workplace duties  and normal wages )

what i ( personally ) wouldn't do with BLX is put a LARGE amount of  money in them , currently  , an affordable bet , sure , and if the company is solid  the share price should grow ( or if it dips a bit decide if buying some more , cheaper is wise )   , this is more a reflection on the economy in general you will have to make a judgment call on the management ( i have done that elsewhere and suddenly it is takeover target  , by an angry major holder or frustrated co-founder , and similar stuff  , or they just start making dumb decisions )


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## darien44 (22 July 2021)

One other thing I noticed, and this could be entirely on the wrong track, is that they seem to cultivate a good relationship with electricans and will recommend them to clients. I mention this point, as I've heard of other companies with surprisingly high ROE's that work on what could be called a
 " friendly middleman" business model.

Basically, customers are not so price sensitive for what they pay if the recommendation is coming from these 'friendly middleman' like electricans, plumbing contractors etc. This is a big reason lens makers like Essilor have such high margins.


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## divs4ever (22 July 2021)

darien44 said:


> One other thing I noticed, and this could be entirely on the wrong track, is that they seem to cultivate a good relationship with electricans and will recommend them to clients. I mention this point, as I've heard of other companies with surprisingly high ROE's that work on what could be called a
> " friendly middleman" business model.
> 
> Basically, customers are not so price sensitive for what they pay if the recommendation is coming from these 'friendly middleman' like electricans, plumbing contractors etc. This is a big reason lens makers like Essilor have such high margins.



in my experience when i had 'a very small businss ' that strategy worked for me as well ,

 but remember that 'margin' includes extra time taken  to listen , and research products  , etc etc.  it looks great , and in the long term it normally works out that way 

 so while not be as juicy as it seems , but is still good because it inspires repat sales  , returning irritated customers are very bad especially for staff morale


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## aus_trader (22 July 2021)

darien44 said:


> Interesting, thanks. So other than benefiting from a short term covid tailwind, is there anything that would make this company a worthy longer term investment?



@divs4ever  has answered your question very well, so I will only add a short comment.

I am very cautious when people start talking long term and fall in love with stocks. Just my opinion but these stocks that is benefiting heavily from the new home/renovation boom will have trouble growing at double digits each year once the tailwind of that boom no longer exists some day in the future.

As mentioned above, management can play a huge part in navigating the company and setting the future direction. An example is AGL which I have held long term and seen it's share price halve and keep on falling. But that's the problem, you can't let go of the relationship once you fall in love. Another reason these type of holdings I have such as AGL, TLS etc. which are not much talked about or put into active management such as the stocks in the spec portfolio. Why put in a portfolio because there isn't any transactions, as there was a buy.... and err that's about it. Maybe can add hold and collect dividends along the way, Dividends have made a difference in making up for the share price decline, so hope they continue to pay them.


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## divs4ever (22 July 2021)

i TRY to look for companies that will survive  now 2020 has tested many to an extent i never saw coming  , yeah the banks were always doing risky stuff and liable to get busted  ,  but b chaotic lockdowns ,  supply lines that have all sorts of disruptions 

 gee it will be interesting to see which companies survive until 2022 ( and avoid being taken-over as well )

 i went back through the inherited stuff and found documentation on the Rinker take-over  , wow that was a lesson in business  buy a company ( using leverage ) to repay   your existing debt  and pay out the Rinker loan with the Rinker profits


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## Dona Ferentes (21 August 2021)

Shareholders in lighting retailer *Beacon Lighting* will see a record dividend for the full-year after growing its profits by 70% thanks the COVID driven boom in new housing and renovations. Beacon reported a net profit to $37.7 million for the year June after sales grew a more sedate 14.7% to $288 million.

Company store comparative sales increased by 13.3% in the year, online sales were a record $26 million, up 60.3% and Beacon International saw record sales of $12.3 million, up 45.3%.

The company will pay a final dividend of 4.6 cents a share, taking the full-year payout to 8.8 cents, 76% above that paid in 2019-20.

The company, like so many others in building and construction and supplies benefited from the boost from the HomeBuilder assistance package that ended in mid-April, as well as first home buyer packages from various states.

While Western Australia was the company’s “most exciting” state in terms of sales performance, sales remained high in Queensland, South Australia and NSW.

Beacon said it will continue to target tradie customers to get a bigger slice of the building and construction market, with the business now opening stores at 7.30am and developing more trade-specific products.

The surge in sales wasn’t at the cost of margins. In fact, Beacon said its EBIT margin (a key metric in retailing as it measures earnings before interest and tax) jumped to 20.6% from 15.1%. Net margin on after tax profits rose to 13% from 8.8% (a rise of nearly 50% and helps explain the higher growth in profit than in sales. But it said *ongoing lockdowns *continued to impact sales.

That apart, Beacon is upbeat on the next year:


> “_Looking forward into 2021-22, the Beacon Lighting Group is very well placed to take advantage of the working from home trend, increased housing churn, home office upgrades and move to more online shopping,_” chief executive Glen Robinson said.





> “_Despite the ongoing uncertainty associated with the COVID-19 pandemic and lockdowns, the Beacon Lighting Group is excited about the opportunities moving into 2021-22 and beyond._”


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## finicky (4 December 2021)

blah blah blah
Rule 1 rule 2,3,4
Buy after the chart's done a streaker and we're fully invested and wouldn't mind a buying cushion for when we divest

Is there a company which ticks all the boxes?​One of the companies that tick a lot of the boxes for us is *Beacon Lighting*. If you look at the historical financials, they tend to suggest it's a high-quality business. It's got a gross margin in the mid 60s, it's got a return on equity in excess of 20%, an interest cover of x10, a robust history of sales growth and it's in a net cash position. So we really like the historical financials of this business but we're also very attracted to the future fundamentals. It's the clear market leader domestically, it has a store network of close to 120 outlets which is vastly greater than the number two player in the domestic market which only has seven stores. We really like management, we think they've got a really strong ability to expand that store network, but also convert about 30% of those stores into higher-yielding superstores. And then we're also attracted to the international opportunities. We think they've got the ability to expand their international sales, especially within the US market, where that ceiling fan market is underpenetrated and vastly undersold. 








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Not Held

2 year weekly chart


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## Dona Ferentes (25 March 2022)

finicky said:


> Buy after the chart's done a streaker and we're fully invested and wouldn't mind a buying cushion for when we divest



.......... and that was about it for Beacon; a gentle letdown from $3.20 at end of 2021, to touch $2.31 early March. Recovery of sorts since then back to $2.80. _Some of this was driven by market news, an update on 20 Jan wasn't well received nor was the Full Year Results on 20 Feb. We saw Pendal group take a 5.3% stake (one of their funds buying?) soon after the lows ._

In Jan, Chief Executive Officer, Glen Robinson said _total sales have been maintained, while gross profit margins and expenses have continued to be carefully managed_, but that may have just meant the Covid safety play wasn't as strong as hoped for, by investors.


> “_the continued lockdowns and ongoing disruptions throughout H1 FY2022 have been challenging for the Beacon Lighting Group, our teams and our customers.  Despite these challenges, the Group is aligned with the household goods sector and has benefited from the strong interest in the lighting and ceiling fan product categories from our customers."_



The FY2022 numbers were fair. There was nothing really standing out, but growth was modest and probably most of what was positive had already been anticipated by the market. Gearing is a little high, and the aim to grow stores, online, trade + international may be ambitious. Other than that, metrics are undemanding.
..............................................................................

*Ally Selby: *_Hey, how are you doing, and welcome to  *Buy Hold Sell. *I'm Ally Selby, and today we're talking about two of investors' favourite things, __*dividends and small caps*__. While small caps are hardly known for their dividends, these gems are really not as rare as you may think. So to analyse five of them, we are joined by Martin Hickson from 1851 Capital, and Ben Rundle from Hayborough Investment Partners. _

_First up, we have Beacon Lighting, which recently announced a fully franked dividend of 4.3 cents per share, and also has an annual dividend yield of around 3.6%. Martin, I might start on you. Is it a buy, hold, or sell?_

*Martin Hickson (BUY): *_We think Beacon's a buy. We're going through a renovation boom at the moment that's supportive of their earnings. We also think the market is underestimating the growth in their trade and international businesses. So, Beacon's a buy._

*Ally Selby: *_Beacon's share price has cascaded around 16% since the beginning of the year. Ben, over to you. Is it a buy, hold, or sell?_

*Ben Rundle (BUY): *_I agree with Martin. I think it's a buy for all the reasons he mentioned. I think the strong conditions they're seeing at the moment will persist for a while, and management's done a fantastic job with this company. They've grown the earnings three times since they listed, and they haven't required extra capital to do so. So, when they say they've got new initiatives that they've been working on for a while, I'm happy to back them._


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## Dona Ferentes (18 August 2022)

Beacon Lighting results out; up 25c to $2.45

delivered a record net profit after tax of $41.7 million, an increase of 8.15 per cent on FY21,
delivered record sales of $304.3 million, up 5.4 per cent, with a gross profit margin of 69 per cent.
The board will pay an FY22 dividend of 9.3¢ per share to shareholders, up from 8.8¢ in FY21.
Beacon hopes to grow trade sales in Australia by more than 25 per cent in FY2023 and will focus on rolling out new stores domestically.


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