No news, I've owed it personally for some time - my best answer, it just fluctuates a lot as it's a thinly traded small cap.

Thanks @rh8178. It could be a buy then?

Quick - can a charts guy check on the candles and give us an update?

2.275 million shares came out of escrow on 2nd September from IPO. Pure speculation but maybe some of those are being sold off. The IPO was always a known exit/sell down event for the original owners.

@Dominator sounds like a case of always known, quickly forgotten...

Very droll - to your question @Rick - I like it and own it as I said. Like most investments, nothing's perfect, there's always something not to like. Pluses for me are low PE, high ROE, topline growth, good margin, low debt - has a runway of growth internationally and some runway in Australia. They sorted out a bunch of product/manfacturing problems pre-IPO which is also a plus. Also anything involving Brett Blundy is always worth a look - Lovisa is a good example (and an amazing business) -

MInuses/question marks for me are it being a candle/diffuser shop and how much of a market there is for that - but I'm also probably not their typical customer. The online business numbers are a bit of a worry too.

Thanks @rh8178, @tbra97 and @Dominator. Yes, online sales were down considerably for FY22, but the first few months of in store trading have been pretty good. My wife tells me candles, fragrances, and diffusers are a thing…at least they are in our home!

Fragrances are also something which are hard to appreciate online, and Dusk is always coming out with new lines. I was chatting to the store manager in Toowoomba this week and she said they had a new release of candles that sold out in a flash. She said they have more of these ordered for Christmas.

Anyway, I think Dusk has good potential and I’ve been doing my bit to put a floor in the share price today!

Cheers,

Rick

Looks like the PE fund "Catalyst Buyout Fund" has offloaded 8% (5 million shares exactly) of their holding on 12th September for an average of $2.044 per share. Using an off-market trade according to the latest notice issued at close of trade today. Their holding is now only 7.7%.

Anyone know how the off-markets normally work? Would they have been shopping around for who wants the shares so the brokerages knew about this and hence the price drop before 12th September?

Yes @Dominator I think that’s right they would have been shopping it around - most likely to another major S/H - not sure that explains the price drop tho…PE Houses have an imperative to realise their investments in 3-5 years usually - this would be some of the reason I would guess.

PS I should have said BTW this doesn’t bother me that much - I think Dusk is a good business at a good price and so it’s a buy for me. These short term issues are impossible to pick and don’t matter in the long run if you buy good businesses at reasonable prices.

They would have needed the discount to the previous market price to allow them to move the number of shares they did, hence why I think this is the reason for the share price drop. The current 90-day volume average is just 103.5k shares a day (or in other terms 0.166% of shares on issue), so to move 5 million shares (8% of the issued shares) is always going to cause a share price fall. Unless we see some new substantial holders, the shares must have distributed among a few different institutional holders.

@rh8178 Agreed, good business, run steadily and well by management. All Dusk needs to do is the same, even if it went slightly backwards it could be considered cheap at this price, however, outlook longer-term looks better than just the same in my very biased opinion. The selling by the PE firm was always a risk for me, the more they sell down the better, then we know when they are out for good!

It’s the voting machine vs weighing machine thing - my personal view is you’ve got an advantage if you can look longer term than the PE fund is looking…

Just to back up Rick's comments about consumer spending. Looks like Aussies are playing on through the storm clouds so far. This data from Mastercard was in the AFR.....look at jewellery, maybe we should be on Lovisa instead!

While consumer spending is strong for now, the concern is that we haven’t seen the full impact of the interest rate hikes hit household budgets,” Mr Zahra said.

“While the retail sector is performing well overall from a sales perspective, the results remain uneven, with small businesses more acutely challenged by inflationary impacts and rising costs associated with fuel, energy, supply chains and rent.”

‘More