reports
Studio Retail Group (STU): Revenue aspiration with a wow factor
Edison Investment Research Limited Studio Retail Group (STU): Revenue aspiration with a wow factor 21-Dec-2021 / 07:00 GMT/BST London, UK, 21 December 2021 Studio Retail Group (STU): Revenue aspiration with a wow factor Studio Retail Group (SRG) is a focused play on the growth of online value non-food retail. Management's aspiration to accelerate medium-term revenue growth, to a CAGR of 10-15% over four to six years, is expected from gains in active credit customer numbers and spend per customer. SRG's valuation is at a significant discount to its own historical multiples (d...
- Kate Heseltine
Studio Retail Group - Revenue aspiration with a wow factor
Studio Retail Group (SRG) is a focused play on the growth of online value non-food retail. Management’s aspiration to accelerate medium-term revenue growth, to a CAGR of 10–15% over four to six years, is expected from gains in active credit customer numbers and spend per customer. SRG’s valuation is at a significant discount to its own historical multiples (despite an improved medium-term growth aspiration), its peers and our DCF-based valuation of c 420p per share if it can achieve its aspirati...
- Kate Heseltine
Studio Retail Group - Revenue aspiration with a wow factor
Studio Retail Group (SRG) is a focused play on the growth of online value non-food retail. Management’s aspiration to accelerate medium-term revenue growth, to a CAGR of 10–15% over four to six years, is expected from gains in active credit customer numbers and spend per customer. SRG’s valuation is at a significant discount to its own historical multiples (despite an improved medium-term growth aspiration), its peers and our DCF-based valuation of c 420p per share if it can achieve its aspirati...
- Kate Heseltine
Studio Retail Group - A transformational year
Studio Retail Group’s (SRG) exceptional results in FY21 are due to strong customer growth and spend per customer and reflect its product appeal and convenience, helped by positive effects from the COVID-19 pandemic. After the sale of its Education business, SRG represents a pure play on the growth of online value retail. At the capital markets day, management reiterated its ambition to grow revenue to £1bn within four to six years, a minimum CAGR of 9.5%. The key drivers are expected to be growt...
- Kate Heseltine
Studio Retail Group - Strong trading and more focused
Studio Retail Group’s (SRG’s) Q421 trading update highlights continued strong trading for the core online retail business through the end of FY21, buoyed in part by the forced closure of competitors on the high street. The (completed) disposal of the more challenged Education business completes the multi-year refocusing of the portfolio and leads to SRG now being a pure-play online retailer with an improved growth outlook than previously. The pro forma net cash position leaves the management tea...
- Kate Heseltine
Studio Retail Group - Impressive trading continues
Studio’s continued impressive sales performance in H120, despite the resumption of competitor trading on the high street, leads management to expect PBT from continuing operations (excluding Education) for FY21 will be ahead of its own internal expectations (there is no external management guidance). The company has a strong comparator for the upcoming key trading period to December, therefore the growth rate is likely to moderate. Its long-term targets of three million customers (versus current...
Edison Investment Research Limited: Edison issues flash on Studio Reta...
Edison Investment Research Limited Edison Investment Research Limited: Edison issues flash on Studio Retail Group (STU) 24-Jun-2020 / 12:19 GMT/BST Â London, UK, 24 June 2020 Edison issues flash on Studio Retail Group (STU) Studio's online and value-based offer produced strong trading during lockdown, with 55% y-o-y product sales growth in the first 11 weeks, which compares very favourably with its online peers. It looks well placed, with tight stock management, as the high street re-commences trading, which is likely to be very competitive. Due to the ongoing uncertainty from C...
- Kate Heseltine
Studio Retail Group - Leading the charge
Studio’s online and value-based offer produced strong trading during lockdown, with 55% y-o-y product sales growth in the first 11 weeks, which compares very favourably with its online peers. It looks well placed, with tight stock management, as the high street re-commences trading, which is likely to be very competitive. Due to the ongoing uncertainty from COVID-19 and the timing of the Education sale, management is unable to provide guidance for FY21e.
- Kate Heseltine
Studio Retail Group - Confirming expectations for FY20; FY21 unclear
The FY20 trading statement confirms underlying PBT estimates before potential further bad debts due to the COVID-19 pandemic. Trading in the core retail business is reassuring. Near term, Studio looks relatively well placed given it is trading when others are not, mark-down risk on clothing is relatively low versus competitors, its value-based offer may become more attractive as consumer incomes fall and its key trading period is towards the end of the year. We withdraw our forecasts for FY21 gi...
- Kate Heseltine
Studio Retail Group - A fine development
Studio’s interim results and current trading statement indicate improving momentum and profitability across the majority of the businesses, highlighting that the shift to digital is improving the growth outlook. The planned disposal of the Education business should lead to higher growth rates for revenue and higher profitability for the remaining business. We upgrade our FY20 PBT estimate by 2% to take account of the improved gross margin performance, which leads to our DCF-based valuation inc...
- Kate Heseltine
Findel - Steady progress
Studio, Findel’s main customer-facing business, has delivered steady sales growth of c 3% in the 16 weeks to 19 July, against a tough prior year comparative and in line with company expectations. Education also continues to make good progress, albeit in the early part of the key ‘back to school’ season, with customers increasingly ordering online. We leave our assumptions and forecast two-year EPS CAGR of 7.3% unchanged, ahead of Studio’s peak trading period. We value the shares at 423p,...
Edison Investment Research Limited: Edison issues outlook on Findel (F...
Edison Investment Research Limited Edison Investment Research Limited: Edison issues outlook on Findel (FDL) 19-Jun-2019 / 13:38 GMT/BST London, UK, 19 June 2019 Edison issues outlook on Findel (FDL) Studio, the main customer-facing business for Findel (FDL), is delivering impressive results and improvements across all key performance metrics through its unique digital-first value proposition with integrated consumer credit, which sets it apart from the peers. Despite a recent rebound in the share price the stock remains significantly undervalued for a predominantly online retailer with a...
- Kate Heseltine
Findel - Outstanding value
Studio, the main customer-facing business for Findel (FDL), is delivering impressive results and improvements across all key performance metrics through its unique digital-first value proposition with integrated consumer credit, which sets it apart from the peers. Despite a recent rebound in the share price the stock remains significantly undervalued for a predominantly online retailer with a strong balance sheet and significant growth opportunities. We forecast a two-year EPS CAGR of 7.3%.
- Kate Heseltine
Findel - Strategy delivering impressive results
Findel’s (FDL’s) digital-first and value-led strategy has helped it to deliver a robust FY19 trading performance and 17.7% increase in underlying PBT to £28.8m, slightly ahead of our recently upgraded forecast. Its core customer-facing business, Studio, continues to thrive in a mixed retail landscape and management is rightly focused on a range of initiatives to raise the brand profile (including changing the company name from Findel to Studio Retail Group), further improve profitability an...
- Kate Heseltine
Findel - A strong finish to the year
Findel’s (FDL’s) attractive online-led value retail proposition is continuing to deliver impressive results. With the mandatory offer by Sports Direct having lapsed, FDL has issued a post-close update confirming a strong trading performance in Q4 in both Studio and Education and expectations for FY19 PBT to slightly exceed market consensus of £27–28m. We upgrade our PBT forecasts by 6% for FY19 and 1% for FY20. Given recent share price weakness, our unchanged valuation of 348p is twice th...
Findel - Christmas trading - incremental strength
Increased trading strength in the late Christmas period marks Findel out as one of the winners in a very mixed retail landscape. The combination of a serious and wide-ranging value offer, with responsible consumer credit support, appeals to the substantial consumer cohort that is managing household finances. The company is clear of terrestrial retail issues, while online ordering has hit a new high of 78% this Christmas. We upgrade our underlying IFRS9 adjusted earnings forecasts, and our update...
Findel - Extraordinary growth continues in peak period
Product revenue growth of 12% in the last 10 comparable weeks is extraordinary in today’s retail climate and it underpins our reiterated 7% earnings growth forecast. With Education responding to turnaround measures, unencumbered by leases, and with the balance sheet strengthening further, Findel should logically be rated as one of the stronger retailers in the sector.
Findel - Peak period starts strongly
Findel’s pre-Christmas peak period has started strongly over recent weeks. Management retains its guidance for the full-year results and we retain our forecast of c 6% earnings growth. Past negatives, which have complicated the investment case, continue to be resolved: turnaround is on course at the smaller Education division, financial services redress is in the final stages and the balance sheet has strengthened further. We see no reason to change our valuation of 428p, which is c 60% above ...
Findel - Strong Q1 gives firm base ahead of peak trading
Findel has made a strong start to FY19, with both businesses trading in line with expectations for the 16 weeks to 20 July 2018. Revenue growth at the key Express Gifts division has accelerated over that of FY18, while the turnaround at Education continues with the customer base now in growth. We retain our forecast and 428p valuation.
Findel - Outstanding success with online-led strategy
Findel (FDL) is seeing outstanding success with its online-led value retail strategy. FY18’s 21% PBT growth includes a strong Black Friday and Christmas campaign. However, underlying independent market share growth puts FDL on the right side of a difficult sector. Also, considering that customer redress has been bottomed out, Education has been stabilised and that core net bank debt (excluding receivables-related debt) is close to net positive, most of the negatives in the investment case have...
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