ASX:ADH

Stock Analysis Report

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Executive Summary

Adairs Limited operates as a specialty retailer of home decoration and home furnishings in Australia and New Zealand. More Details


Snowflake Analysis

Outstanding track record and good value.


Similar Companies

Share Price & News

How has Adairs's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ADH's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

10.7%

ADH

5.1%

AU Specialty Retail

0.5%

AU Market


1 Year Return

130.0%

ADH

19.5%

AU Specialty Retail

-5.6%

AU Market

Return vs Industry: ADH exceeded the Australian Specialty Retail industry which returned 19.5% over the past year.

Return vs Market: ADH exceeded the Australian Market which returned -5.6% over the past year.


Shareholder returns

ADHIndustryMarket
7 Day10.7%5.1%0.5%
30 Day31.4%16.5%5.0%
90 Day74.0%36.7%2.9%
1 Year138.0%130.0%24.0%19.5%-2.3%-5.6%
3 Year232.3%176.9%93.7%69.1%12.4%-1.2%
5 Year111.7%58.6%105.3%63.0%41.5%12.9%

Price Volatility Vs. Market

How volatile is Adairs's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Adairs undervalued compared to its fair value and its price relative to the market?

41.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ADH (A$4.14) is trading below our estimate of fair value (A$7.13)

Significantly Below Fair Value: ADH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ADH is good value based on its PE Ratio (19.7x) compared to the AU Specialty Retail industry average (20.9x).

PE vs Market: ADH is good value based on its PE Ratio (19.7x) compared to the Australian market (21.4x).


Price to Earnings Growth Ratio

PEG Ratio: ADH is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: ADH is overvalued based on its PB Ratio (5x) compared to the AU Specialty Retail industry average (2.7x).


Next Steps

Future Growth

How is Adairs forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ADH's forecast earnings growth (10.3% per year) is above the savings rate (2.3%).

Earnings vs Market: ADH's earnings (10.3% per year) are forecast to grow slower than the Australian market (17.5% per year).

High Growth Earnings: ADH's earnings are forecast to grow, but not significantly.

Revenue vs Market: ADH's revenue (8.5% per year) is forecast to grow faster than the Australian market (4.6% per year).

High Growth Revenue: ADH's revenue (8.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ADH's Return on Equity is forecast to be high in 3 years time (28%)


Next Steps

Past Performance

How has Adairs performed over the past 5 years?

18.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ADH has high quality earnings.

Growing Profit Margin: ADH's current net profit margins (9.1%) are higher than last year (8.6%).


Past Earnings Growth Analysis

Earnings Trend: ADH's earnings have grown by 18.6% per year over the past 5 years.

Accelerating Growth: ADH's earnings growth over the past year (19%) exceeds its 5-year average (18.6% per year).

Earnings vs Industry: ADH earnings growth over the past year (19%) exceeded the Specialty Retail industry -3.9%.


Return on Equity

High ROE: ADH's Return on Equity (25.1%) is considered high.


Next Steps

Financial Health

How is Adairs's financial position?


Financial Position Analysis

Short Term Liabilities: ADH's short term assets (A$77.6M) do not cover its short term liabilities (A$94.3M).

Long Term Liabilities: ADH's short term assets (A$77.6M) do not cover its long term liabilities (A$154.3M).


Debt to Equity History and Analysis

Debt Level: ADH's debt to equity ratio (17.7%) is considered satisfactory.

Reducing Debt: ADH's debt to equity ratio has reduced from 53.3% to 17.7% over the past 5 years.

Debt Coverage: ADH's debt is well covered by operating cash flow (390.4%).

Interest Coverage: ADH's interest payments on its debt are well covered by EBIT (10.6x coverage).


Balance Sheet


Next Steps

Dividend

What is Adairs's current dividend yield, its reliability and sustainability?

5.31%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ADH's dividend (5.31%) is higher than the bottom 25% of dividend payers in the Australian market (2.13%).

High Dividend: ADH's dividend (5.31%) is low compared to the top 25% of dividend payers in the Australian market (5.51%).


Stability and Growth of Payments

Stable Dividend: ADH has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: ADH's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (52.3%), ADH's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ADH's dividends in 3 years are forecast to be covered by earnings (72.5% payout ratio).


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Mark Ronan

3.92yrs

Tenure

AU$1,058,744

Compensation

Mr. Mark Ronan has been the Chief Executive Officer and Managing Director of Adairs Limited since November 18, 2016 and serves as its Executive Director. Mr. Ronan served as Chief Operating Officer of Adai ...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD750.24K) is about average for companies of similar size in the Australian market ($USD711.53K).

Compensation vs Earnings: Mark's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Mark Ronan
MD, CEO & Executive Director3.92yrsAU$1.06m0.40%
A$ 2.8m
Ashley Gardner
Chief Financial Officer1.17yrsAU$1.30m0.34%
A$ 2.4m
Michael Cherubino
Executive Director Property & Business Development and Executive Director10.75yrsAU$666.69k1.22%
A$ 8.5m
Jamie Adamson
Head of Investor Relationsno datano datano data
Alexandra Christopher
Chief Marketing & Digital Officer2.75yrsno datano data
Fay Hatzis
Financial Controller & Company Secretary1.33yrsno datano data

2.0yrs

Average Tenure

Experienced Management: ADH's management team is considered experienced (2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Mark Ronan
MD, CEO & Executive Director3.92yrsAU$1.06m0.40%
A$ 2.8m
Michael Cherubino
Executive Director Property & Business Development and Executive Director10.75yrsAU$666.69k1.22%
A$ 8.5m
Trent Peterson
Independent Non-Executive Directorno dataAU$73.33k0.83%
A$ 5.8m
Kathryn Spargo
Independent Non-Executive Director5.42yrsAU$82.50k0.025%
A$ 172.5k
Michael Butler
Independent Non-Executive Chairman5.5yrsAU$132.92k0.35%
A$ 2.5m
David MacLean
Non-Executive Director10.75yrsAU$73.33k1.77%
A$ 12.4m
Kiera Grant
Independent Non-Executive Director1.75yrsAU$73.33k0.10%
A$ 705.6k
Simon West
Independent Non-Executive Director1.75yrsAU$73.33kno data

5.4yrs

Average Tenure

56yo

Average Age

Experienced Board: ADH's board of directors are considered experienced (5.4 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: ADH 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.


Top Shareholders

Company Information

Adairs Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Adairs Limited
  • Ticker: ADH
  • Exchange: ASX
  • Founded: 1918
  • Industry: Homefurnishing Retail
  • Sector: Retail
  • Market Cap: AU$699.979m
  • Shares outstanding: 169.08m
  • Website: https://www.adairs.com.au

Number of Employees


Location

  • Adairs Limited
  • 2 International Court
  • Scoresby
  • Victoria
  • 3179
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ADHCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 2015
ADHASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJun 2015
1FQDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2015

Biography

Adairs Limited operates as a specialty retailer of home decoration and home furnishings in Australia and New Zealand. Its stores offer towels, bath mats, bathroom accessories, bathrobes and slippers, laund ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/20 10:32
End of Day Share Price2020/10/20 00:00
Earnings2020/06/28
Annual Earnings2020/06/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.