A lot has been written about the significant cash sitting in consumer’s bank accounts as a result of unprecedented stimulus and lockdowns which has kept people from spending. As we hurtle towards the festive season and freedom, retailers are likely to see a surge in spending into year end. Shaver Shop is our preferred pick amongst mid-cap retailers to take advantage of this theme. Revenues were up 10% in FY21 with NPAT up 68% with cash of over $7m on their balance sheet. There was no guidance provided at the result, though LFL sales were up +0.5% for the first few weeks of FY22. On a single digit PE and a high single digit yield, it’s cheap, it just needs a catalyst which reopening could provide. While cash levels are low in the portfolio right now, we may look to switch out of an ecommerce exposed company to fund the purchase of Shaver Shop which is more of an omni channel retailer.
MM is bullish SSG
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