Six months ago almost to the day, I wrote saying that a price of around $3.50 was roughly the lowest point OrotonGroup Limited (ASX: ORL) was likely to reach without any further bad news.
Time has proven me correct, with an excellent full-year showing from this multi-brand clothing retailer making up much of its lost ground.
After slipping more than 10% in the lead up to today's announcement, Oroton shares have jumped 15.8% to $4.23.
Let's take a closer look at why:
Highlights:
- Revenue up 25.5% to $124.8 million
- EBITDA up 9.6% to $18.7 million
- Profit After Tax attributable to members up 15.6% to $8.2 million
- Net Tangible Assets down from $1.12 to $0.88 per share
- 2 new stores in China, 2 in Singapore, 1 franchised store opened in Dubai
- Margins declined from 67.2% to 62.5% largely thanks to launch of higher-volume lower-cost GAP brand stores
- Expenses as a percentage of sales decreased 4.6%
- Further store openings, supply chain improvements and focus on increasing foot traffic and margins with less discounting targeted in FY15
So What?
Readers can see that Oroton's results are quite solid and reflect a substantial milestone in the group's life post-Ralph Lauren.
Further expansions into Asia continue to be the primary drawcard of Oroton for me, although an expanding online sales presence combined with various business refinements are a big drawcard and highly likely to improve earnings in future reporting periods.
Now What?
Well, OrotonGroup has long been a favourite of my fellow Fool contributors for a long time, with a brief search of our website turning up dozens of articles backing the company's long-term future.
A recent special report from The Motley Fool's top analyst has got people excited, and The Motley Fool think this company's upside potential is even greater than Oroton's – and without the teething pain associated with building new businesses.
A proud record of profit growth and increasing dividends stands The Motley Fool's pick in good stead, and conditions in the Australian economy are very favourable to its operations at the moment.
But don't take my word for it – see for yourself.
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