Trading Update issued on 12th January:
"Cellent has also increased its penetration in the traditional electronics retail channels and begun on-line channel sales with positive results. Accordingly the profitability of the company has improved significantly and the board advises that attributable profit after tax for the first half of the 2018 financial year will be in the region of $2.2M (2017 - $1.5M) equivalent to 3.9c per share (2017 - 2.8c per share), which is can increase of 52% on the earnings of the corresponding prior half year"
Last year they experienced a 16% increase in NPAT to $2.04m (underlying NPAT of $3.06m) and underlying EPS of 5.8c per share - with growth of 52% earnings on that for the first half of the year. This added growth has largely been driven by their acquistion of Wentronic, an online German distributor of electonic accessories with this acquistion bring a wide range of synergies, namely in the sourcing of products in HK/China.
Assuming a replication of H1FY18 in H2FY18 (which occured last FY) the company will record a NPAT of $4.4M, or an EPS of 7.8c, that equates to a P/E of 6 with growth for H1FY18 at 50%. The share is however rather illiquid, with Top 20 holding ~93% as of the latest Annual Report. The past few days has seen a large sell order of 100,000 units appear at 42c at open and remain there the whole day so there are shares to be purchased.
Products sold by the company now entail Audio/Video cables, Tablets/Phones, Phone cases, Video Gadets, Power, Network cables, Memory and Activity Trackers. They have a large online prescence with Wentronic and have taken a range of steps to prepare for the continual development of Amazon. On top of hardware products they offer a range of software solutions for the placement and reordering of products in retail stores, include Planogram a Heat-mapping technology.
CLT Price at posting:
42.0¢ Sentiment: Buy Disclosure: Held
