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Kathmandu (ASX:KMD) share price on watch as dividends resume

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Kathmandu Holdings Ltd (ASX: KMD) shares are on watch today after the company released its half-year results and reported its dividend has resumed. The Kathmandu share price closed Monday’s session 1.3% lower at $1.14.

Let’s look closer at Kathmandu’s announcements today.

Kathmandu’s half-year results

The Kathmandu share price will be in focus this morning after the company announced it will pay shareholders a dividend for the first time since October 2019. Although, the NZ 2 cent (AUD 1.9 cent) per share fully franked dividend is the company’s smallest yet.

Kathmandu boasted that its half-year sales were up by 12.9% to around $410 million. Its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was also up by 19%, standing at around $48 million. 

The company’s half-year results show that its 2019 acquisition of Rip Curl may have been a stroke of genius, as the brand held the company’s EBITDA strong through the first half of the 2021 financial year. Particularly as international border closures reduced consumer demand for Kathmandu’s insulation and rainwear.

Kathmandu stated Rip Curl’s wholesale forward orders are now above pre-COVID levels.

The half-year results also mentioned Kathmandu-owned brand Oboz is seeing sales growth and has a strong forward order book.

Commentary from management

Kathmandu group’s CEO Xavier Simonet said Rip Curl’s outstanding first-half result has validated Kathmandu’s diversification strategy.

Benefiting from increased participation in surfing in Australia, Europe and the USA, Rip Curl achieved strong sales and profits despite COVID-19 trading restrictions, reflecting the brand’s technical product focus and strong consumer engagement.

Over the first half, we implemented a rapid response to changes in consumer preference resulting from COVID-19. To respond to increased participation in local travel and adventure, our brands adjusted their focus to product categories in high demand, such as wetsuits and surfboards for Rip Curl, and camping and footwear for Kathmandu. Omni-channel capability allowed our brands to capture record demand for the online channel, with online penetration now making up almost 13% of the Group’s direct to consumer sales.

Kathmandu share price snapshot

The Kathmandu share price has spent the last 12 months recovering from a steep drop in March 2020 due to COVID-19. It is currently 141.49% higher than it was this time last year. Although, it is still 49.1% lower than it was on the first trading day of 2020. Year to date, Kathmandu shares are down by 3.81%.

The company has a market capitalisation of around $804 million, with 709 million shares outstanding.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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