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BLX - Beacon Lighting Group

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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.
 
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.
 
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!
 
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.
.
Click to expand...

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.
 
Re: BLX - Beacon Lighting Group IPO

I am angry. :mad: I am sad. :(:cry:

:mad:

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.
 
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.
 
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.
Click to expand...

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.
Click to expand...

They actually design and source their own products. That's one of their claimed competitive advantages.
 
Re: BLX - Beacon Lighting Group IPO

McLovin said:
How's it looking now...
Click to expand...
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. :D
 
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
 
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.
 
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.
 
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
 
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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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."
 
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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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..."
Click to expand...

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.
 
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.

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,

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.
Click to expand...

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