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BST - Best & Less Group Holdings

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Best & Less Group Holdings Ltd (BST) is a value apparel specialty retailer with a 245-physical store network in Australia and New Zealand and an online platform across its two brands Best & Less (in Australia) and Postie (in New Zealand).

Best & Less Group seeks to provide its target customers with everyday low prices, convenient shopping experience, which supported by accessible stores and high levels of availability of wanted everyday basics and on-trend products which are designed and marketed in line with the positioning statement of twice the quality at half the price.

Best & Less Group sells apparel across babywear, kidswear, womenswear, menswear, footwear, accessories and hosiery. In an environment where consumers may seek better value or lower price offerings, while maintaining a desire for high quality, BST is well-positioned to increase its share of the $23.8 billion Australian and New Zealand apparel market. Management believes that the trend towards the value segment of the apparel market will accelerate in a post-COVID-19 environment. BST's value-driven model is characterised by a relatively high number of customer touchpoints to generate its sales, including:
  • 22.6 million transactions in CY20;
  • 38.3 million website sessions in CY20; and
  • 91.6 million units sold in CY20.
It is anticipated that BST will list on the ASX during July 2021.

Best&Less™

www.bestandless.com.au www.bestandless.com.au
 
Best & Less Group holdings Ltd - 26 July 2021 11:00AM AEST ##

Listing date26 July 2021 11:00AM AEST ##
Contact detailshttps://www.bestandless.com.au/
Ph: 1300 135 766
Principal ActivitiesHolding company for an Australia and New Zealand based value apparel retail business operating the "Best & Less" brand in Australia and the "Postie" brand in New Zealand.
GICS industry groupTBA
Issue Price$2.16
Issue TypeOrdinary Fully Paid Shares
Security codeBST
Capital to be Raised$60,000,000
Expected offer close date16 July 2021
UnderwriterFully underwritten. Macquarie Capital (Australia) Limited and Bell Potter Securities Limited (Joint underwritters and Lead Managers)
 
BST up and trading .... opened at $2.20 and now $2.35

The strong first day has been helped by releasing FY 2021 numbers that are up on the prospectus forecasts on several metrics.

For the 52 weeks to 27 June, the company delivered total unaudited revenue of $663.2 million, exceeding the prospectus forecast for the period of $657.7 million.

Total revenue growth versus the prior corresponding period was 6.1 per cent higher, with like for like revenue growth for FY21 of 10.8 per cent, exceeding the prospectus forecast of 8.9 per cent.

The company said it expects FY21 pro forma EBITDA to exceed the prior corresponding period by over 100 per cent and to outperform the prospectus forecast of $60.7 million by approximately 15 per cent.

"Best & Less Group delivered a very strong trading performance in FY21, despite ongoing COVID-19 related disruption in Australia and New Zealand," said chief executive Rodney Orrock.
Click to expand...
"This result is a pleasing validation of our strategy and demonstrates the power of our value proposition, our focus on the baby and kids apparel segments, our broad omnichannel sales network, and our integrated vertical retail model."
Click to expand...
 
Solid buying for BST; now $2.50 ..... with little retracement.

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(their $8 Tshirts, often discounted to $6 or even $5, are a good buy)
 
Not surprisingly not looking great for best & less with EPS steadily dropping since the IPO but the SP is only marginally lower at $1.97

FY21 EPS: 82.15c
FY22 EPS: 29.20c
H123 EPS: 9.0c

Lease liabilities and finance costs are trending towards $60 million a year up from $50 million in FY21 and operating cashflow is trending down, this past half the operating cashflow just covered finance and leases. Certainly didn't cover a dividend (8cps) or any capital expenditure ($7m). They can claim that there was a build in inventory (like all retailers are doing) because of international shipping/China covid disruptions, but I worry that the economy is heading in a bad direction so more than likely there is a reasonable chance of inventory writedowns.

The only good thing is the debt levels are very low, let's hope they keep it that way and retain a little more of their profits on the books to take advantage of other soon-to-be-struggling retailers rather than get seduced by paying everything out as dividends.
 
On July 20th, 2023, Best & Less Group Holdings Ltd (BST) was removed from the ASX's Official List in accordance with Listing Rule 17.14, following compulsory acquisition of its remaining securities by BBRC Admin 1 Pty Ltd.
 
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