Kathmandu share price one to watch tomorrow as institutional interest wanes

Kathmandu Holdings Ltd (ASX: KMD) institutional investors declined to take up 100% of their entitlements in the company's latest entitlement offer.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Kathmandu Holdings Ltd (ASX: KMD) share price will be on watch when its current trading halt lifts tomorrow, after the retailer failed to max-out its NZ$145 million institutional entitlement offer.

What did Kathmandu announce today?

Kathmandu announced the successful completion of its 1-for-4 fully underwritten pro-rata accelerated entitlement offer of fully-paid ordinary shares.

The company's institutional entitlement offer closed on Wednesday with the Aussie retailer announcing that eligible investors elected to take up 88% of their entitlements under the offer and 92% of eligible institutional shareholders took up their entitlements in full.

According to the update, a bookbuild for the unfulfilled entitlements will close today, and the retail entitlement offer will open this Friday.

Kathmandu shareholders will be able to subscribe to the 1-for-4 entitlement offer at A$2.37 per share up until Monday 21 October.

What else has Kathmandu announced recently?

The Kathmandu share price has rocketed 16% higher in a matter of weeks after the Aussie retailer posted a bumper full-year earnings result.

On 18 September, Kathmandu posted a net profit after tax of NZ$50.5 million (A$47.2 million) for the year ended 31 July 2019, up 32.9% on the prior corresponding period.

Company sales jumped 11.7% year-on-year to NZ$497.4 million (A$464.5 million) while operating cash flow climbed higher to NZ$75.6 million (A$70.6 million).

The record result came in-line with guidance but still boosted shareholders' hopes higher in September with the Kathmandu share price currently trading just shy of its 52-week high of $3.06 per share.

Should you buy Kathmandu shares?

The company's full-year results demonstrate that Aussie retail is far from over, with the outdoor company continuing to boost sales higher.

However, the Kathmandu share price remains down on the $3.49 per share high it hit back in May 2014, meaning it's not all smooth sailing for Kathmandu investors.

With a 5.15% per share dividend yield, Kathmandu may be a good option for income but I wouldn't be banking on the company's share price for further capital gains in the next 12–18 months.

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Retail Shares

A man eases back onto his sofa, happy with the relaxed vibe from his furniture.
Retail Shares

Why I just sold half my shares in this ASX 300 stock even though I still love it!

I’m still a big fan of this business.

Read more »

Two fashionable asx investors dancing among confetti.
Retail Shares

2 'very high-quality' ASX retail shares with significant inside ownership

A fund manager has named two appealing stocks to own.

Read more »

A man sits on a bench atop a mountain with a laptop, making investments with a green ESG mind.
Earnings Results

ASX All Ords stock KMD tumbles as interim dividend cancelled

Investors are hitting the sell button on ASX All Ords stock KMD today.

Read more »

Close-up Of Empty Shopping Cart Near Person's Hand Using Calculator Over White Desk
Retail Shares

Better buy: Coles or Woolworths stock?

Which stock should go in the shopping basket?

Read more »

Person handing out $100 notes, symbolising ex-dividend date.
Retail Shares

Why did Super Retail shares drop after going ex-dividend?

This is the story behind the decline.

Read more »

Happy couple doing online shopping.
Opinions

Is it too late to buy after the Kogan share price rocketed 90% in a year?

Is this online retailer still an investment opportunity?

Read more »

Two people comparing and analysing material.
Retail Shares

Better buy in March 2024: Wesfarmers stock vs JB Hi-Fi stock

Which of these two retail heavyweights would be a better buy?

Read more »

A man eases back onto his sofa, happy with the relaxed vibe from his furniture.
Share Gainers

If you'd put $30,000 in this ASX retail stock 11 months ago, you'd have $116,000 now

When battered stocks make a comeback, it happens very quickly. Here's a prime example.

Read more »