Australian Investment Blog

ASX:JBH 13/08/2018

JB Hi-Fi (JBH) – Good result but slow growth ahead

Stock

JB Hi-Fi $23.88 as 13/08/2018

Event

This morning JBH reported their full year results and they were slightly ahead of market expectations and the stock has rallied 1.79% to $23.83 at time of writing. Revenue was close to expectations however they’ve done a better job in terms of cost control in a tough retail environment which dropped down to a +1.15% beat at the profit line. Relative to FY17, the FY18 result showed reasonable growth in the business with earnings per share up by ~7%, and profit up by ~11% on the year.

They were happy with the performance of the business across the board although they did note a tough second half period for the Good Guys. FY19 Guidance was thin on the ground however in terms of top line sales (revenue) they expect the group will do $7.1b, up 3.6% on the year which was close to the $7.126B the market was already expecting pre-result. In terms of current market expectation, EBITDA is expected to be $425.5m up 3.36% on the year while profit is expected to be 3.03% higher at $240.3m in FY19. JB Hi-Fi (JBH) Chart

Market Matters Take/Outlook

A decent result for JB during a tough period for retailers in Australia. The stock has re-rated down to just 11.4x earnings which is a 29% discount to its 5 year average PE. While we doubt that JB will have a stellar year, it’s now priced for no growth (yet delivering 3%). On 11.4x its cheap but the environment will likely remain a tough one.

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