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Harry's always seems to bring out the best in the buddies doesn't it!!!???!!
Seriously...... what has always attracted to me to this counter is its strong revenue generation. If I read the FY 2011 numbers correctly, Harry's revenue was S$ 47 Million last year - practically S$ 4 Million per month.
But what always dismays me and always puts me off is that Harry's only manages to eek out margins that I would charachterise as "pharmaceutical". Last year for example..... that S$ 47 Million revenue stream was "converted" into ~ S$ 220,000 net profit. Personally speaking, I believe these sorts of profit margins do not make for a sustainable successful business.
I also believe that two of the key drivers for the fullsome erosion of Harry's revenue stream are ...........
a) their managements' apparent inability to bring costs to heel - inspection of the front page of the financials shows costs up across the board..... some in the double digit %'s, and
b) a continuation of an absurd and value destructive diversification of its buisiness. Harry's market cap is still under S$ 10 Mln yet its diversification would concern a company with 100 times such market cap. This evening's later announcement of the formation of a Canadian Subsidiary served to ram home the point again.
I know I am a worn record on this. But at least - I humbly contend - I'm consistent.
Harry's share price has spent a good few months in the single cents range until the last few days. I'm betting it won't be long before its back there. Margins need to be increased, costs need to be brought to heel and the management's focus needs to be on a trimmed portfolio of bars ......... in my humble opinion.
I will be reading Harry's coming Annual Report with some interest, particularly the piece on Executive Remuneration. I'll wager that the CEO's package is by quite some margin in excess of the Company's net profit. Lets see.
Not vested. I'll go back into my box now.
Seriously...... what has always attracted to me to this counter is its strong revenue generation. If I read the FY 2011 numbers correctly, Harry's revenue was S$ 47 Million last year - practically S$ 4 Million per month.
But what always dismays me and always puts me off is that Harry's only manages to eek out margins that I would charachterise as "pharmaceutical". Last year for example..... that S$ 47 Million revenue stream was "converted" into ~ S$ 220,000 net profit. Personally speaking, I believe these sorts of profit margins do not make for a sustainable successful business.
I also believe that two of the key drivers for the fullsome erosion of Harry's revenue stream are ...........
a) their managements' apparent inability to bring costs to heel - inspection of the front page of the financials shows costs up across the board..... some in the double digit %'s, and
b) a continuation of an absurd and value destructive diversification of its buisiness. Harry's market cap is still under S$ 10 Mln yet its diversification would concern a company with 100 times such market cap. This evening's later announcement of the formation of a Canadian Subsidiary served to ram home the point again.
I know I am a worn record on this. But at least - I humbly contend - I'm consistent.
Harry's share price has spent a good few months in the single cents range until the last few days. I'm betting it won't be long before its back there. Margins need to be increased, costs need to be brought to heel and the management's focus needs to be on a trimmed portfolio of bars ......... in my humble opinion.
I will be reading Harry's coming Annual Report with some interest, particularly the piece on Executive Remuneration. I'll wager that the CEO's package is by quite some margin in excess of the Company's net profit. Lets see.
Not vested. I'll go back into my box now.
(28-02-2012, 07:53 PM)Musicwhiz Wrote: FY 2011 results out. Not very inspiring - was surprised to see that net margin was just 0.5%, though when compared to last year's low base the increase is 190%.
A dividend of 0.22 cents/share has been declared.
Harry's last traded price was 10.5 cents/share.
(Not Vested)
RBM, Retired Botanic MatSalleh