SILK Laser (ASX:SLA) share price rockets 20% after beating FY21 guidance

SILK Laser shares are rocketing higher after a very successful financial year…

| More on:
Vanadium Resources share price person riding rocket indicating share price increase

Image source: Getty Images

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 SILK Laser Australia Ltd (ASX: SLA) share price has been a very strong performer on Wednesday.

In morning trade, the laser clinic company's shares are up 20% to $4.09 following the release of its full year results.

SILK Laser share price rockets after beating upgraded guidance

  • Network cash sales increased 68% to $85.1 million
  • Reported revenue grew 82% to $58.9 million
  • Pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) up 180% to $17.3 million
  • Pro forma net profit after tax up 839% to $7.5 million
  • 11 new SILK clinics opened bringing network to 116 after acquisitions

What happened in FY 2021 for SILK?

SILK was on form in FY 2021, delivering a 68% increase in network cash sales to $85.1 million and a 180% jump in pro forma EBITDA to $17.3 million. The latter was ahead of its upgraded EBITDA guidance range of $15 million to $16 million, which explains why the SILK Laser share price is performing so strongly today.

This was driven by a 52% increase in like for like sales, new store openings, and strong demand in the injectables and body categories. Underpinning this was a 28% increase in average customer spend to $605.

What did management say?

SILK Laser's Co-Founder and Managing Director, Martin Perelman, said: "The past 12 months have been a busy and highly successful period for SILK, and I am very proud of our first full year results delivered as a publicly listed company."

"Given the dedication and commitment of SILK's employees, franchisees and joint venture partners, and our focus on excellence in customer service, all of SILK's service categories performed in line or above expectations, and the Company is well-positioned to drive long term growth."

What's next for SILK Laser?

Also potentially giving the SILK Laser share price a lift today was a trading update and management's outlook.

It revealed that July 2021 sales and EBITDA exceeded what was achieved in July 2020 despite lockdowns. This is a big positive given that July and September 2020 were the most profitable months of FY 2021.

Mr Perelman said: "The underlying business foundations of SILK are strong as demonstrated by like-for-like clinic performance when adjusted for lost trading days due to lockdowns. We're carefully managing the COVID-19 challenges across SILK, and at present approximately 80% of our SILK clinic network remains open. Our priority is to operate in a way that keeps our customers and team members safe. Our clinics continue to build waiting lists for clients in states where clinics are closed, to capture pent-up demand in readiness for easing of lockdown restrictions. We intend to provide a further update on Q1 FY22 trading in October."

Management also revealed that it plans to open 4 to 8 new clinics in FY 2022, focused on Australia's East Coast and New Zealand.

It sees these geographical catchments as key growth markets, with up to 25 potential new sites identified for FY 2022 and FY 2023 across Australia's East Coast. Whereas in New Zealand it aims to add 4 new clinics in FY 2022, taking the total number to 19.

The SILK Laser share price is up 14% in 2021.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended SILK Laser Australia Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »

Agricultural ASX share price on watch represented by farmer in field looking at tablet computer.
Earnings Results

Graincorp share price lifts off as dividend is maintained and debts plunge

ASX 200 investors are bidding up the Graincorp share price today. But why?

Read more »

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Earnings Results

Why is this ASX 200 stock avoiding the market selloff and pushing higher?

Not all shares are falling with the market on Thursday.

Read more »