Here’s why the Premier (ASX:PMV) share price just hit an all-time high

Here's why the Premier (ASX:PMV) share price just hit an all-time high

The Premier Investments Limited (ASX: PMV) share price hit an all-time high this morning following a positive trading update.

Aaron Teboneras

Author bio Aaron Teboneras is an ASX investment writer with a background in business, marketing and finance. He has been a contributor to The Motley Fool since 2020, covering market news, company announcements, broker views and financial results. Aaron’s previous notable appointments include National Australia Bank, and Computershare where he discovered his passion for the Australian sharemarket. Aaron has been investing for almost 20 years, using both fundamental and technical analysis to find opportunities. Aaron completed a Technical Analysis course with Mint Analysis in 2022 and is currently studying Training and Assessment. Outside the market, he has travelled to more than 45 countries and enjoys trekking, meeting new people and seeing different parts of the world. Areas of expertise ASX growth shares Founder-led companies Company announcements and financial results Fundamental and technical analysis Education Bachelor of Business from RMIT University Social media LinkedIn Instagram Favorite investment quote “If you don't find a way to make money while you sleep, you will work until you die.” — Warren Buffett

Published January 13, 2021 10:59 am AEDT

The Premier Investments Limited (ASX: PMV) share price is on the run this morning. This comes after the company released a positive trading update for the first half of FY21.

At market open, the retail conglomerate's shares shot up 17% to an all-time high of $26.32. At the time of writing, the Premier share price is trading up 15.9% at $26.06

Hands grabbing for high rung on a ladder pointing to the sky — Image source: Getty Images

What did Premier announce?

With 3 weeks remaining until the end of the term, Premier advised it has continued its sales growth trajectory throughout the first half of FY21.

For the period ending 9 January, Premier revealed it has achieved total global sales of $716.9 million. This represents an increase of 5% on the same time last year, pushed by the rapid acceleration of online sales. The latter accounted for $146.2 million, reflecting a 60% jump over the prior corresponding period.

Total global like for like (LFL) sales also lifted 18%, with its Australia business reporting an increase of 26.2%.

In addition, the company highlighted its strong cost management, negotiating with key landlords on rent reductions due to the COVID-19 environment. Premier went on to discuss that at different times including up until today, several of its locations worldwide have been temporarily closed, affecting staff and loss of potential sales.

However, despite the trading restrictions and provided no significant impacts occur in the final weeks, the company is projecting earnings before interest and tax (EBIT) to swell. Current estimates put EBIT over the entire 27-week period to come in the range of $221 million to $233 million. This is an increase of between 75% and 85% on prior's H1 FY20 performance.

Overall, Premier said gross profit was tracking well ahead of last year's result over the same timeframe. It further reiterated that it maintains a healthy balance sheet and will release its H1 FY21 results in late March.

About the Premier share price

The Premier share price has surged from last year's March lows of $8.13. Reaching an all-time high today, this represents a gain of 223%.

At current, Premier has a market capitalisation of $4.1 billion and a price-to-earnings (P/E) ratio of 30.

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