Skip to main content
Equities

Cettire Limited (CTT): Delivering triple digit revenue growth

Strong 3Q trading ahead of BPe

Cettire (CTT) provided a trading update for the first 4 months of 2H23 (Jan-Apr) and sales revenue of $141.3m (+122% on pcp) and Adjusted EBITDA of $7m were beats to BPe. The 4Q has commenced well with April sales revenue +160% and guidance for similar growth rate in May/June. Key metrics including orders, customer adds, average order value, repeat rates and App performance are tracking well. The cash position of $39m reflected the settlement of trade payables from the seasonally larger December quarter, therefore we expect the 4Q seasonality (second largest contribution to annual revenue) to assist the improvement in the cash balance to end the year in a healthy cash position (BPe cash balance ~$51m as of end of FY23e).

Earnings changes

We upgrade our revenue forecasts to incorporate 3Q/4Q23 revenue beats (3Q23 ~25% higher than previous BPe, while 4Q at company guided growth ~30% ahead of previous BPe). This drives upgrades to our FY23 Adjusted EBITDA estimates, while we expect some incremental margin benefits in FY24/25 on marketing investment and fixed operating costs. We now forecast ~160% net revenue growth in the seasonally strong 4Q23 assisted by supportive comps (lower marketing spend/revenue growth in the pcp) which would see 4Q dominating as the highest contributor to the FY23 annual revenue. Our Adjusted EBITDA margins remain at ~5% for 4Q23, as we estimate delivered margins of ~23% and marketing investment at ~10% of net revenue. The net result sees our NPAT forecasts +2%/+15%/+5% for FY23/24/25e.

Investment View: PT up 4% A$2.50, Maintain BUY

Our Price Target increases 4% to A$2.50/share (prev. A$2.40/share) driven by our earnings upgrades and changes to cash flow assumptions to reflect movements in working capital. We think CTT will continue to outperform its peer group consisting of global luxury retailers and local e-commerce players given its <1% market share in a large and growing market which could remain more resilient than other discretionary categories in a likely recessionary environment. We retain our BUY recommendation.

To read the full report click the button below.

View Detailed Report
Authored by Chami Ratnapala – Analyst – at Bell Potter Securities, 16 May 2023
Important Disclaimer—This may affect your legal rights: Because this document has been prepared without consideration of any specific client’s financial situation, particular needs and investment objectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement with Bell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell Potter Securities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document. This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. In the USA and the UK this research is only for institutional investors. It is not for release, publication or distribution in whole or in part to any persons in the two specified countries. This is general investment advice only and does not constitute advice to any person.
Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. Bell Potter Securities and its associates may hold shares in the companies recommended.