Gale Pacific (ASX:GAP) - Share price, News & Analysis

Q: What is the Fair Price of GAP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

GAP (A$0.29) is trading below our estimate of [[fair value]] (A$0.34)

GAP fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	0/6
Past Performance	2/6
Financial Health	5/6
Dividends	2/6

GAP Stock Overview

Rewards

Trading at 15.8% below our estimate of its fair value

Risk Analysis

Dividend of 6.9% is not well covered by earnings or forecast to be in the next 3 years

Profit margins (3.1%) are lower than last year (6.2%)

Does not have a meaningful market cap (A$80M)

Gale Pacific Competitors

Atomos

ASX:AMS

AU$77.8m

Shriro Holdings

ASX:SHM

AU$77.9m

Tamawood

ASX:TWD

AU$81.7m

AVJennings

ASX:AVJ

AU$193.0m

Price History & Performance

Summary of all time highs, changes and price drops for Gale Pacific
Historical stock prices
Current Share Price	AU$0.29
52 Week High	AU$0.52
52 Week Low	AU$0.27
Beta	1.48
1 Month Change	-3.33%
3 Month Change	-9.38%
1 Year Change	-43.14%
3 Year Change	-9.38%
5 Year Change	-23.68%
Change since IPO	-73.64%

Recent News & Updates

May 02

Gale Pacific (ASX:GAP) Has A Pretty Healthy Balance Sheet

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

Shareholder Returns

	GAP	AU Consumer Durables	AU Market
7D	1.8%	5.1%	1.0%
1Y	-43.1%	-34.0%	-7.9%

Return vs Industry: GAP underperformed the Australian Consumer Durables industry which returned -34% over the past year.

Return vs Market: GAP underperformed the Australian Market which returned -7.9% over the past year.

Price Volatility

Is GAP's price volatile compared to industry and market?
GAP volatility
GAP Average Weekly Movement	5.3%
Consumer Durables Industry Average Movement	7.2%
Market Average Movement	10.6%
10% most volatile stocks in AU Market	17.5%
10% least volatile stocks in AU Market	4.7%

Stable Share Price: GAP is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: GAP's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1951	n/a	John Marcantonio	https://www.galepacific.com

Gale Pacific Limited, together with its subsidiaries, manufactures, markets, and distributes screening, architectural shading, and commercial agricultural / horticultural fabric products for domestic, commercial, and industrial applications. The company offers fabrics for agricultural, architectural, industrial, horticultural, mining, and construction applications under the GALE Pacific brand; face masks under the GALE GUARD brand; and window furnishings, such as a range of venetian and roller blinds, as well as curtain accessories for hanging curtains under the Zone Interiors brand. It also provides a range of outdoor leisure and garden products for home and garden, including gazebos, umbrellas and shade sails, synthetic grass, weed mat, bird nets, and screenings for protection from UV rays, hail and other adverse weather conditions, crop protection, water conservation, and architectural designs and construction applications under the Coolaroo brand.

Gale Pacific Fundamentals Summary

How do Gale Pacific's earnings and revenue compare to its market cap?
GAP fundamental statistics
Market Cap	AU$80.15m
Earnings (TTM)	AU$6.09m
Revenue (TTM)	AU$197.05m

13.2x

P/E Ratio

0.4x

P/S Ratio

Is GAP overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
GAP income statement (TTM)
Revenue	AU$197.05m
Cost of Revenue	AU$105.39m
Gross Profit	AU$91.66m
Other Expenses	AU$85.57m
Earnings	AU$6.09m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 23, 2022

Earnings per share (EPS)	0.022
Gross Margin	46.52%
Net Profit Margin	3.09%
Debt/Equity Ratio	42.8%

How did GAP perform over the long term?

See historical performance and comparison

Dividends

6.9%

Current Dividend Yield

91%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is GAP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for GAP?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for GAP. This is calculated by dividing GAP's market cap by their current preferred multiple.
What is GAP's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$80.15m

GAP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.6x
Enterprise Value/EBITDA	7.5x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does GAP's PE Ratio compare to its peers?

GAP PE Ratio vs Peers

The above table shows the PE ratio for GAP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	15.2x
AMS Atomos	27.8x	47.0%	AU$77.8m
SHM Shriro Holdings	9.4x	n/a	AU$77.9m
TWD Tamawood	14.4x	n/a	AU$81.7m
AVJ AVJennings	9x	n/a	AU$193.0m
GAP Gale Pacific	13.2x	n/a	AU$80.2m

Price-To-Earnings vs Peers: GAP is good value based on its Price-To-Earnings Ratio (13.2x) compared to the peer average (15.2x).

Price to Earnings Ratio vs Industry

How does GAP's PE Ratio compare vs other companies in the Global Consumer Durables Industry?

Price-To-Earnings vs Industry: GAP is expensive based on its Price-To-Earnings Ratio (13.2x) compared to the Global Consumer Durables industry average (12.8x)

Price to Earnings Ratio vs Fair Ratio

What is GAP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

GAP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	13.2x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate GAP's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of GAP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: GAP (A$0.29) is trading below our estimate of fair value (A$0.34)

Significantly Below Fair Value: GAP is trading below fair value, but not by a significant amount.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Gale Pacific forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.8%

Forecasted Consumer Durables industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Gale Pacific has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

Discover growth companies

Examine Gale Pacific's financial health to determine how well-positioned it is against times of financial stress by looking at its level of debt over time and how much cash it has left.
Gale Pacific competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has Gale Pacific performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

30.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: GAP has high quality earnings.

Growing Profit Margin: GAP's current net profit margins (3.1%) are lower than last year (6.2%).

Past Earnings Growth Analysis

Earnings Trend: GAP's earnings have grown significantly by 30.2% per year over the past 5 years.

Accelerating Growth: GAP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: GAP had negative earnings growth (-50.8%) over the past year, making it difficult to compare to the Consumer Durables industry average (-18.9%).

Return on Equity

High ROE: GAP's Return on Equity (6.7%) is considered low.

Discover strong past performing companies

Financial Health

How is Gale Pacific's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: GAP's short term assets (A$128.0M) exceed its short term liabilities (A$64.9M).

Long Term Liabilities: GAP's short term assets (A$128.0M) exceed its long term liabilities (A$37.5M).

Debt to Equity History and Analysis

Debt Level: GAP's net debt to equity ratio (14.1%) is considered satisfactory.

Reducing Debt: GAP's debt to equity ratio has increased from 36.8% to 42.8% over the past 5 years.

Debt Coverage: GAP's debt is well covered by operating cash flow (20.2%).

Interest Coverage: GAP's interest payments on its debt are well covered by EBIT (6.3x coverage).

Balance Sheet

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Dividend

What is Gale Pacific current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

6.90%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: GAP's dividend (6.9%) is higher than the bottom 25% of dividend payers in the Australian market (2.62%).

High Dividend: GAP's dividend (6.9%) is in the top 25% of dividend payers in the Australian market (6.24%)

Stability and Growth of Payments

Stable Dividend: GAP's dividend payments have been volatile in the past 10 years.

Growing Dividend: GAP's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (90.5%), GAP's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (143.4%), GAP's dividend payments are not well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure

CEO

John Marcantonio

2.75yrs

Tenure

AU$1,629,443

Compensation

Mr. John Paul Marcantonio serves as Chief Executive Officer of Gale Pacific Limited since November 29, 2019 and serves as its Managing Director and Executive Director since August 14, 2020. He serves as th...

CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD1.12M) is above average for companies of similar size in the Australian market ($USD279.73K).

Compensation vs Earnings: John's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: GAP's management team is considered experienced (2.2 years average tenure).

Board Members

Experienced Board: GAP's board of directors are considered experienced (4.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/07 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30