mark100
26-10-2006, 08:35 PM
GLE listed on the ASX in Jan this year and appears to be trading on attractive fundamentals.
It is a global supplier of knitwear to major retailers, predominantly in the US.
2006FY EPS were 16.7c putting GLE on a historical PE of 6.5 ($1.10 share price). It’s also paying a 7.5% unfranked dividend. There are 74.1m shares on issue.
Some historical financials are:
NPBT
2003CY A$9.0m
2004CY A$11.5m
2005FY A10.2m (affected by Tsunami)
2006FY A$12.4m
EBIT margin
2003CY 4.38%
2004CY 5.01%
2005FY 4.81% (affected by Tsunami)
2006FY 5.65%
Debt / Equity Ratio is 38% and ROE is 47%
According to the AGM presentation first quarter 2007 sales were up 5.6% on the previous corresponding period and 2nd quarter sales and sales bookings are up 20% on the previous corresponding period, indicating the potential for solid earnings growth again this year.
For more detail I suggest reading their prospectus and annual report.
Also, they received a write up in the Criterion column of yesterday’s Australian, which I’ve copied below.
GLG Corp (GLE) 96c
A RISK for the likes of Pacific Brands is the tendency for retailers to deal directly with Asian suppliers, which leads us on to this little-known and undervalued play. Few listed industrials trade on a PE multiple of less than six times and pay a 10 per cent yield, but this esoteric rag trader does.
While better known in Asia, GLG's profile is confined to the back-room world of importing knitwear for large retailer clients, typically those in the US.
GLG is a supply chain manager, sitting between the manufacturer in Asia and its clients including Wal Mart, Macy's, Bloomingdale, Calvin Klein and Levi Strauss.
GLG is 74 per cent owned by its founder, Singaporean entrepreneur Estina Ang, who built the business over two decades in what was literally a rags-to-riches story.
GLG actually conducts little business in Australia and its revenues are $US denominated. The company listed here more or less by accident, having been turned away from its home market because it didn't satisfy the requirements of the Singapore bourse.
As with here, US retailers are shedding procurement functions in favour of the things they do better such as site location and getting people to buy once they are in the store.
In the year to June 30, GLG shipped 60 million garments and recorded
revenues of close to $US200 million. GLG achieved its forecast net profit of $US9.3 million and paid a US6.2c per share dividend.
At its annual meeting last week, GLG reported a 5.7 per cent rise in first (September) quarter sales to $US59.5 million. Total December half sales are expected to be 13 per cent higher at $US121.6 million.
Three small-cap managers - including MMC Asset Management and Paradice Cooper - have joined the register since the stock listed last December at $1.
MMC chief investment officer Peter Constable expects 10 per cent earnings growth, putting the stock on a 10 per cent (unfranked) yield.
Constable collared the stock for these reasons: high return on capital, good cash flow and consistent margins. He believes the stock should be valued at around $1.60 a share. "It's just super cheap and there's good growth as well," he said. "They are in a sweet spot to leverage the opportunities as the US retail model continues to move to outsourcing."
The sector is dominated by the Hong Kong listed Li & Fung, but otherwise it's highly fragmented. As a result, GLG is likely to be involved in consolidation, either as a buyer or a seller.
According to GLG deputy chairman Sam Weiss, expansionary measures include expanding from knitwear to woven apparel and cracking the difficult European market.
Another driver is the further winding back of the textile quota system, which limited Chinese volumes to the US.
But Weiss notes the industry is highly competitive. GLG works on a gross margin of 10 per cent, but it's not always possible to achieve that.
"In some cases we are a price taker," Weiss says. "If Wal Mart want to order 2 million shirts, there's very l
It is a global supplier of knitwear to major retailers, predominantly in the US.
2006FY EPS were 16.7c putting GLE on a historical PE of 6.5 ($1.10 share price). It’s also paying a 7.5% unfranked dividend. There are 74.1m shares on issue.
Some historical financials are:
NPBT
2003CY A$9.0m
2004CY A$11.5m
2005FY A10.2m (affected by Tsunami)
2006FY A$12.4m
EBIT margin
2003CY 4.38%
2004CY 5.01%
2005FY 4.81% (affected by Tsunami)
2006FY 5.65%
Debt / Equity Ratio is 38% and ROE is 47%
According to the AGM presentation first quarter 2007 sales were up 5.6% on the previous corresponding period and 2nd quarter sales and sales bookings are up 20% on the previous corresponding period, indicating the potential for solid earnings growth again this year.
For more detail I suggest reading their prospectus and annual report.
Also, they received a write up in the Criterion column of yesterday’s Australian, which I’ve copied below.
GLG Corp (GLE) 96c
A RISK for the likes of Pacific Brands is the tendency for retailers to deal directly with Asian suppliers, which leads us on to this little-known and undervalued play. Few listed industrials trade on a PE multiple of less than six times and pay a 10 per cent yield, but this esoteric rag trader does.
While better known in Asia, GLG's profile is confined to the back-room world of importing knitwear for large retailer clients, typically those in the US.
GLG is a supply chain manager, sitting between the manufacturer in Asia and its clients including Wal Mart, Macy's, Bloomingdale, Calvin Klein and Levi Strauss.
GLG is 74 per cent owned by its founder, Singaporean entrepreneur Estina Ang, who built the business over two decades in what was literally a rags-to-riches story.
GLG actually conducts little business in Australia and its revenues are $US denominated. The company listed here more or less by accident, having been turned away from its home market because it didn't satisfy the requirements of the Singapore bourse.
As with here, US retailers are shedding procurement functions in favour of the things they do better such as site location and getting people to buy once they are in the store.
In the year to June 30, GLG shipped 60 million garments and recorded
revenues of close to $US200 million. GLG achieved its forecast net profit of $US9.3 million and paid a US6.2c per share dividend.
At its annual meeting last week, GLG reported a 5.7 per cent rise in first (September) quarter sales to $US59.5 million. Total December half sales are expected to be 13 per cent higher at $US121.6 million.
Three small-cap managers - including MMC Asset Management and Paradice Cooper - have joined the register since the stock listed last December at $1.
MMC chief investment officer Peter Constable expects 10 per cent earnings growth, putting the stock on a 10 per cent (unfranked) yield.
Constable collared the stock for these reasons: high return on capital, good cash flow and consistent margins. He believes the stock should be valued at around $1.60 a share. "It's just super cheap and there's good growth as well," he said. "They are in a sweet spot to leverage the opportunities as the US retail model continues to move to outsourcing."
The sector is dominated by the Hong Kong listed Li & Fung, but otherwise it's highly fragmented. As a result, GLG is likely to be involved in consolidation, either as a buyer or a seller.
According to GLG deputy chairman Sam Weiss, expansionary measures include expanding from knitwear to woven apparel and cracking the difficult European market.
Another driver is the further winding back of the textile quota system, which limited Chinese volumes to the US.
But Weiss notes the industry is highly competitive. GLG works on a gross margin of 10 per cent, but it's not always possible to achieve that.
"In some cases we are a price taker," Weiss says. "If Wal Mart want to order 2 million shirts, there's very l