As someone who went for a ride previously with DSK (Bought at $2, went to $4 and didn't get out until 85c), the numbers are tempting my inner value investor. NTA @ around 60c as a safety net, EV/NPAT of under 5, assuming they lose $5 million in H2 as is usual for them.

Took a brief look at the presentation, bit worried about management talking about international expansion when the NZ venture hasn't gone well. At least there are strong comments about being disciplined if they do. @rh8178 any thoughts on this?

I believe Dusk is more reliant on management execution than most. It’s not a set and forget product. It’s as non discretionary as it gets and most of all subject to fads. I think they need successful execution of frequent gimmicky marketing strategies to stand still let alone expand. Given he’s from a clothing background the current CEO has appeared surprisingly effective in executing some of the most bizarre marketing initiatives I’ve seen Who would have thought there would be market demand for Bubble O Bill candles?

I think Dusk deserves to trade cheaply mainly because of the need to innovate to stand still. However - A positive that I’ve not seen discussed though with Dusk and other Covid beneficiaries is the fact that they showed during Covid they can scale up if needed (if for example they find marketing success in these seemingly crazy promotions)

Something that really erks me however particularly about Dusk is the focus on membership sales in reporting which I suspect misrepresents what’s going on. The price of joining is close to or lower than the saving on the first purchase making everyone join. They present it like people are choosing to become ongoing customers which I don’t believe is happening. It’s mainly a gift store for one off gifts.

@rh8178 , The numbers all look ok, but I think everyone looks at it and goes 'candles, can that be a good long term business really?'. I've never liked retail, but I am trying to broaden my horizons and minimise my bias there. As @PhilO mentions, it is totally reliant on discretionary spending, and I'm not keen on the expansion talk that @Dominator has mentioned. That said, candles and assorted paraphernalia are remarkably resilient (just look at your local market), and popular as gifts (my wife and her girlfriends all regularly use them as go to gifts, and also seem very happy to receive them). I feel as though it is the sort of product that would still attract discretionary spending in an economic downturn. The product is small, doesn't spoil, and I assume the popular scents don't go out of fashion. Odds are most Dusk product is made in China, which doesn't seem to be the massive turnoff for most consumers as it is for me, and surely makes for low costs and high margins. I just had a quick look at their online offering and the site seems fine, $100 for free shipping seems excessive, but that might just get people into the store instead. You've successfully put it on my watchlist @rh8178.

I note that the price today is 95cents (52 week low was 75.5 cents) with a 4 cent fully franked dividend due to got ex-Div and be paid in March.

Please don't buy it. I'm actually about to sell I think - I've been close to pushing the button for a while, but the valuation keeps me in.

It is cheap, but as @Dominator says, the 2nd half they give some of the first half profit back - so it might be cheap for a reason - classic value trap. I have a similar story, my average buy in is way up there too. But it's still a single digit PE, cashed up (although they'll use cash in the 2nd half), no debt company. I should point out on reading back my last comment you can't extrapolate the first half as it loses money in the 2nd half. As I've said before my wife absolutely hates it, it is a place that sells candles after all - if I wasn't already in it, I wouldn't be buying it (which I think means I should sell...). To partially answer your question @Dominator, they actually moved production to Asia pre-IPO so may have some overseas experience - overseas investments aren't always bad (Lovisa seems to be going ok, and Brett Blundy has a small involvement here too).

It’s hard to get data around it but I’m wondering if Dusk’s woes have been at least in large part caused by diffusers being a bit of a fad. They were promoted even more than candles during covid lockdowns and I sensed a bit of a belief amongst management that they had a razor and blade model going where they needed to be topped up with oils on an ongoing basis, which led to a focus on promoting Dusk membership. I think the businesses may have sneakily changed the focus without breaking sales out. And it does seem to have become more about candles which don’t have the same economics. I don’t see Dusk as a candle store long term however. I think it’s a gift store that sells whatever it can in its broader category based on trends. Hence the need for exceptional product management just to stay still. It’s cheap enough though in my opinion. I’m holding.