Lighting and ceiling fans retailer Beacon Lighting Group Ltd (ASX: BLX) has delivered another impressive earnings report today, posting a strong lift in revenues and an even greater rise in profits.
So What: Beacon Lighting has been a market favourite since its ASX debut in April last year with the stock more than doubling in price over that time. Indeed, it's not difficult to see why the stock is so popular with the company reporting an impressive 19.3% lift in revenue to $179.4 million for the 52 weeks ended 28 June 2015.
Notably, most of this growth was created organically with the company reporting a 10.4% lift in comparative sales – a measure that excludes the impact of new store openings. The company's store count grew to 91 during the period, up from 85, with more planned for the 2016 financial year as well as a greater push into online activities.
Another positive from today's report was a significant improvement in the group's margins and its overall earnings. Net profit after tax, or NPAT, grew an impressive 43.6% to $16.9 million, giving the company an NPAT margin of 9.4% — a vast improvement on last year's 7.8% margin – with operating expenses as a percentage of sales falling by 3%.
What that means is that for every dollar of revenue earned by Beacon Lighting, the company gets to keep 9.4 cents after accounting for all expenses.
Now What: As has been the case with retailers such as JB Hi-Fi Limited (ASX: JBH), Nick Scali Limited (ASX: NCK) and Harvey Norman Holdings Limited (ASX: HVN), there's no doubt that Beacon Lighting has benefited from Australia's housing boom.
Lights, fans and globes are all a necessity in most homes which will have contributed to Beacon Lighting's strong growth. Given the regulators' concerns about the housing markets in Sydney and Melbourne right now, this could also be a risk moving forward for the retailer which investors will need to be mindful of.
Still, the company expects another successful year in FY16 which could see its share price climb to fresh heights.
