• Q3 sales of $27.7M up 50% on PCP.
• EBIT margin up -17.6% for Q3. 
• Gross margins up 4% for Q3. 
• Guidance for FY 2021 upgraded to $147-151 M revenue, and $38-40 M normalised EBIT.   

Will this strong growth hold in a post-COVID world? 

DISC - HELD.  

Management performance hurdles of interest are:

50% of LTI is vested according to Total Shareholder Return to end of FY2023: 

1. If 4% achieved, 20% of LTI is awarded
2. If 4-15% is achieved, a percentage, in linear relationship of 20-100% to TSR range of 4-15%.  
3. If >15% TSR, 100% of LTI awarded. 

Simply put, management are incetivised to achieve TSR of 15% pa to FY2023.  Basecase if IPO price of $2.00 per share. 

50% of LTI is vested according to EPS growth to end of FY2023: 

1. If 4% achieved, 20% of LTI is awarded
2. If 4-15% is achieved, a percentage, in linear relationship of 20-100% to TSR range of 4-15%.  
3. If >15% TSR, 100% of LTI awarded. 

Simply put, management are incetivised to achieve EPS growth of 15% pa to FY2023. Base case is EPS of 14 cents in FY2020.   

The EPS hurdle for management is 22 cents per share.  

Key takeaways:

1) revenue up 55% on pcp.

2) Pro forma EBIT up 194% to $28.3 M (excl. Jobkeeper benefit) 

3) Dusk rewards membership grew 53% to 634k members. They account for 59% of total sales. 

4) Net cash at $34.9 M , and 15 cents interim dividen announced. 

5) Store life-for-like sales growth of 44% !

6) Average transaction value up 15% from FY2020 @ $54.  

7) First 6 weeks of 2H 2021 have continued strongly, with total sales up 55.5% on pcp. 

8) Online / omni-channel sales up 120%.  

9) Store network at 118, with mdeium term plans to increae htis to 150 stores.  36 legacy stores to be converted to Glow 2.0 format (with corresponding spike in LFL sales expected).  

10) gross margin @ 67.7% - SAAS like. AUD appreciation is forecast to increased GMs in H2. 

H1, 2021 EPS is 27 cents.   I would estimate 2021 EPS to be around 40 cents per share.  Look cheap......

Fragrance specialty retailer, Dusk announced a significant upgrade in results.  Key takeaways:

1) Like-for-like sales growth of 49% on pcp. 

2) Sales of $90 M for the HY,  an increase of 53% on pcp. 

3) EBIT of $25-27 million forecast, an increase of 168% on pcp.   

4) Cash on hand of $33.5 million, or 54 cents per share. 

Based solely on the number, Dusk looks cheap IMO. 

DISC - I HOLD.