Skip to main content
Equities

City Chic Collective (CCX): Outperforming

Strong FY21 result – ahead BPe, plus resilient trading update

CCX has release unaudited FY21 headline numbers plus a trading update, as follows:

  • FY21 sales of $258m up 32.9% on pcp. Comparable sales up 31.6% vs pcp.
  • FY21 underlying EBITDA (pre-AASB16) is expected to be $42.0-$42.5m, circa 9% ahead BPe $38.8m, and representing 58-60% growth on FY20.
  • Trading in 1H22-to-date has “exceeded budget”, with strong US and UK trading outweighing impact of temporary store closures due to lockdowns in Australia.
  • Net cash balance of A$71.5m as at 27 June 2021 (pre funding of Navabi, below).

Acquisition of Navabi provides foothold in European market

CCX also announced it has acquired JPC United GmbH (“Navabi”), as follows:

  • Established in 2009, Navabi is an online marketplace selling third-party women’s plus-size brands. Navabi has also developed its own brands exclusively sold on the marketplace, which have grown to become the majority of sales.
  • Multiple Navabi websites across Europe incl. Germany (primary), France and UK. Materially strengthens CCX’s foothold in the €40b European plus-size market.
  • Navabi’s websites had 5.8m visits in 2020 generating €10.4m (A$16.6m) in sales. Pre-pandemic, website traffic exceeded 10m visits. Whilst Navabi has traded profitably in 2021, traffic and revenue have not recovered to pre-pandemic levels. This suggests material sales upside opportunity as European markets reopen.
  • Payment of €6.0m (A$9.6m) in cash, implying EV/sales ~0.6x. Inventory position is depleted and will be rebuilt to more commercial levels over the next 6 months.

Earnings changes & Investment View: Retain Buy, PT $6.60

We have updated our forecasts for the FY21 result and acquisition, and rolled forward our model. Net effect is FY21e-FY24e EPS upgrades of 9.4%/2.5%/8.4%/11.9% & our PT increases to $6.60 (previously $4.90). We retain our Buy rating based on CCX’s: significant growth prospects in key offshore markets (with the company’s acquisitive and organic growth strategy proving highly successful); flexible business model; ample funding headroom; favourable industry tailwinds; and strong management team.

City Chic Collective - Earnings Forecast

To read the full report click the button below.

View Detailed Report
Authored by Sam Haddad – Analyst – at Bell Potter Securities, 26 July 2021
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.