Here is the long awaited “Financial Statements” for Padini Part 2. Time for homework guys and gals! 📚 Towards the end we will also be calculating the PEG ratio and give our “Honest Opinion” about this stock.
Income Statement (Profitability) 💳
Revenue is still YoY for their 2018 and also the trailing 4Q which has hit as high as 1.74bil for the T4Q but a lower profit before tax compared to the 2018 result, however if we compare the 2018 and 2017 both are still YoY growth for revenue and PBT with a 10 years CAGR of 14.99% for Revenue and 15.09% for PBT📈. Another thing I like about this is their Net profit which is one of the key indicators as to whether a company is really growing their cash or not. Their Net profit for the past 10 years CAGR is 15.28% and has recorded a good value of 178mil Net profit in the year of 2018. EPS growth is also growing at a good pace for the past 5 years, 0.27 cents a share to be exact for the year of 2018. A solid Income statement if you ask me. Their Earnings per share has also increased YoY in 2017 23.92 cents per share to now 2018 is 27.08 cents per share, an increase of 13.21%!
2017 ➡️ 2018
Revenue 🔺 6.88%
Gross Profit 🔺 11.14%
Net Profit 🔺 13.20%
EPS 🔺 13.21%
Balance Sheet (Assets, Liabilities and Equity) ⚖️
Padini’s assets has also been growing YoY, from 881.2mil to 924mil which isn’t a large growth but its quite a decent one judging by how much they are paying out in dividend, they are using their cash also to grow their assets. On the other hand in terms of their liabilities it is decreasing and when you see their assets growing but their liabilities is getting lesser you know that the management is moving the company in the right direction. ✅ Their liabilities has dropped quite substantially from 329.1mil to 261.4mil which the main contributor for this huge decrease is their repayment on their borrowings from 75.9mil to only 33.4mil for the year 2018 which is really outstanding.
2017 ➡️ 2018
Total Assets 🔺 4.84%
Total Liabilities 🔻 -17.72
Cashflow Statement (Cash Management) 💵
Now lets move on to the cashflow statement which is equally as important as all the other financial statements, this is where we will see how did they use their money to grow the company. Their cash generated from operations sadly was decreased but why? Lets further breakdown their cash from operating activities. We can see that the profit before tax is still higher in 2018 compared to 2017 by 12.43% which is a good sign but what really hit them is the Reversal of inventories written off and written down which is about 23.2mil in 2018 but they didn’t have this in the year of 2017. Another disturbing thing which is the increase of inventory and decrease in trade and other receivables, although they are making YoY sales but they have higher inventories? Probably their management thought that 2018 will be a good year? Or it could be that they are buying more of the “winter” by that I mean stock market crash 💥, as they predict that middle class people would buy cheaper clothes when they don’t have money? All these has led to their take home cash to be lesser but nonetheless they are still making good money as their cash and cash equivalents at the end of FY2018 increased by 34.4mil+ compared with FY2017.
2017 ➡️ 2018
Cash from operating activities 🔻 -25.79
Cash and cash equivalents at end of FY2018 🔺 8.27%
Current Price / Earnings = 14.28
Growth (5 years CAGR of Net Income) = 18.26% (stated in Part 1)
PEG = 14.28 / 18.26 = 0.78
All in all the company is still doing decently good and they are consistently growing their revenue and profits YoY and their management team is doing a good job at managing the company’s direction moving forward. Their stock price drop quite substantially but their business is still doing great so is it a good time to invest in it now? It is up to you guys to decide 😊 I have provided you guys with all the information especially the PEG ratio so do you guys think its cheap?
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