ASX:SNL

Stock Analysis Report

Executive Summary

Supply Network Limited engages in the provision of aftermarket parts to the commercial vehicle industry in Australia and New Zealand.

Rewards

Trading at 23.3% below its fair value

Earnings are forecast to grow 8.91% per year

Earnings grew by 6.3% over the past year

Risk Analysis

High level of non-cash earnings

Unstable dividend track record



Snowflake Analysis

Excellent balance sheet average dividend payer.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: SNL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.4%

SNL

-3.0%

AU Retail Distributors

-2.6%

AU Market


1 Year Return

22.8%

SNL

7.8%

AU Retail Distributors

16.9%

AU Market

Return vs Industry: SNL exceeded the Australian Retail Distributors industry which returned 7.8% over the past year.

Return vs Market: SNL exceeded the Australian Market which returned 16.9% over the past year.


Shareholder returns

SNLIndustryMarket
7 Day4.4%-3.0%-2.6%
30 Day6.4%-8.5%-0.6%
90 Day9.8%-2.9%0.09%
1 Year27.4%22.8%13.9%7.8%22.7%16.9%
3 Year168.4%140.3%42.5%27.0%35.6%17.1%
5 Year175.1%102.3%192.1%121.1%60.0%23.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

23.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SNL (A$4.47) is trading below our estimate of fair value (A$5.83)

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


Price To Earnings Ratio

PE vs Industry: SNL is poor value based on its PE Ratio (21x) compared to the Retail Distributors industry average (15.3x).

PE vs Market: SNL is poor value based on its PE Ratio (21x) compared to the Australian market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: SNL is poor value based on its PEG Ratio (2.4x)


Price to Book Ratio

PB vs Industry: SNL is overvalued based on its PB Ratio (4.8x) compared to the AU Retail Distributors industry average (1.6x).


Next Steps

Future Growth

How is Supply Network forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

8.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SNL's forecast earnings growth (8.9% per year) is above the savings rate (1.1%).

Earnings vs Market: SNL's earnings (8.9% per year) are forecast to grow slower than the Australian market (9.4% per year).

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

Revenue vs Market: SNL's revenue (7.3% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: SNL's revenue (7.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SNL's Return on Equity is forecast to be high in 3 years time (20.7%)


Next Steps

Past Performance

How has Supply Network performed over the past 5 years?

10.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SNL has a high level of non-cash earnings.

Growing Profit Margin: SNL's current net profit margins (7%) are lower than last year (7.3%).


Past Earnings Growth Analysis

Earnings Trend: SNL's earnings have grown by 10.7% per year over the past 5 years.

Accelerating Growth: SNL's earnings growth over the past year (6.3%) is below its 5-year average (10.7% per year).

Earnings vs Industry: SNL earnings growth over the past year (6.3%) exceeded the Retail Distributors industry -2.6%.


Return on Equity

High ROE: SNL's Return on Equity (22.7%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Supply Network's financial position?


Financial Position Analysis

Short Term Liabilities: SNL's short term assets (A$58.4M) exceed its short term liabilities (A$22.3M).

Long Term Liabilities: SNL's short term assets (A$58.4M) exceed its long term liabilities (A$9.1M).


Debt to Equity History and Analysis

Debt Level: SNL's debt to equity ratio (24.6%) is considered satisfactory.

Reducing Debt: SNL's debt to equity ratio has increased from 18.8% to 24.6% over the past 5 years.

Debt Coverage: SNL's debt is well covered by operating cash flow (25.5%).

Interest Coverage: SNL's interest payments on its debt are well covered by EBIT (38.7x coverage).


Balance Sheet

Inventory Level: SNL has a high level of physical assets or inventory.

Debt Coverage by Assets: SNL's debt is covered by short term assets (assets are 6.2x debt).


Next Steps

Dividend

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

3.24%

Current Dividend Yield


Dividend Yield vs Market

company3.2%marketbottom25%2.4%markettop25%5.6%industryaverage2.9%forecastin3Years3.7%

Current dividend yield vs market & industry

Notable Dividend: SNL's dividend (3.24%) is higher than the bottom 25% of dividend payers in the Australian market (2.43%).

High Dividend: SNL's dividend (3.24%) is low compared to the top 25% of dividend payers in the Australian market (5.63%).


Stability and Growth of Payments

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

Growing Dividend: SNL's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (68%), SNL's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SNL's dividends in 3 years are forecast to be covered by earnings (64.8% payout ratio).


Next Steps

Management

What is the CEO of Supply Network's salary, the management and board of directors tenure and is there insider trading?

13.4yrs

Average board tenure


CEO

Geoffrey David Stewart 0

20.1yrs

Tenure

AU$647,215

Compensation

Mr. Geoffrey David Huston Stewart has been the Managing Director of Supply Network Ltd. since November 2000 and also serves as its Executive Director. Mr. Stewart served as the Chief Executive Officer of S ...


CEO Compensation Analysis

Compensation vs Market: Geoffrey David's total compensation ($USD443.54K) is above average for companies of similar size in the Australian market ($USD255.57K).

Compensation vs Earnings: Geoffrey David's compensation has been consistent with company performance over the past year.


Board Age and Tenure

13.4yrs

Average Tenure

Experienced Board: SNL's board of directors are seasoned and experienced ( 13.4 years average tenure).


Insider Trading

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


Ownership Breakdown

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


Management Team

  • Peter Gill

    Company Secretary & Non-Executive Director

    • Tenure: 13.4yrs
    • Compensation: AU$168.24k
  • Geoffrey David Stewart

    MD & Executive Director

    • Tenure: 20.1yrs
    • Compensation: AU$647.22k
  • Robert Coleman

    Group Financial Controller

    • Tenure: 0yrs

Board Members

  • Peter Gill

    Company Secretary & Non-Executive Director

    • Tenure: 13.4yrs
    • Compensation: AU$168.24k
  • Geoffrey David Stewart

    MD & Executive Director

    • Tenure: 20.1yrs
    • Compensation: AU$647.22k
  • Peter McKenzie

    Non-Executive Director

    • Tenure: 13.4yrs
    • Compensation: AU$73.23k
  • Greg Forsyth

    Non-Executive Chairman

    • Tenure: 9.8yrs
    • Compensation: AU$114.43k

Company Information

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


Key Information

  • Name: Supply Network Limited
  • Ticker: SNL
  • Exchange: ASX
  • Founded:
  • Industry: Distributors
  • Sector: Retail
  • Market Cap: AU$182.204m
  • Shares outstanding: 40.76m
  • Website: https://www.supplynetwork.com.au

Location

  • Supply Network Limited
  • 1 Turnbull Close
  • Pemulwuy
  • New South Wales
  • 2145
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SNLASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
SNLCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992

Biography

Supply Network Limited engages in the provision of aftermarket parts to the commercial vehicle industry in Australia and New Zealand. It sells truck and bus parts under the Multispares brand name, as well  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/06 10:30
End of Day Share Price2019/12/04 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


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.