BLX – Beacon Lighting Group

Not sure I like it yet but might attract if it falls to around a dollar? I will be watching it on a chart anyway. It’s lost the solar lighting business that Tony Featherstone thought held growth promise – he also mentioned BLX’s street lighting enterprise in the same context
The afr article quoted below says to expect broker downgrades over the next month. Foreshadowed result doesn’t look too bad with revenue and reporting profit actually making a small increase but underlying H1 profit expected to fall 22% on past year.

Beacon Lighting profit hit by weaker $A, bushfires

The housing recovery can’t come fast enough for lighting retailer Beacon (BLX) which has warned that underlying first-half profits will fall about 22 per cent as sales and margins come under pressure.

Beacon, which owns about 113 stores around Australia, said underlying net profit was expected to fall 21.7 per cent to $9 million in the six months ending December due to the weaker Australian dollar, subdued consumer confidence, disruption from bushfires and a poor performance from its emerging businesses.

However, chief executive Glen Robinson said the retailer was well placed to benefit from improved conditions in the housing market in the June-half.

The guidance fell well short of consensus forecasts around $10.8 million and is likely to lead to a spate of broker downgrades before Beacon releases audited results next month.

Group sales rose 2.4 per cent to $123.1 million in the December-half, compared with sales growth of 4.8 per cent in the year-ago period.

But gross margins fell to 64.7 per cent from 66.7 per cent as Beacon struggled to raise prices to offset the impact of the weaker Australian dollar, which has fallen from around US71¢ to around US68¢.

Beacon expects December-half bottom line net profit to rise about 9.5 per cent to $12.7 million, boosted by a $5.4 million one-off net gain on the sale and leaseback of its Parkinson distribution centre and a $500,000 gain from changes to lease accounting rules.

These gains will be partially offset by a $2.3 million loss incurred in closing Beacon’s solar energy business.

Beacon (BLX) is the fourth* listed retailer to issue a profit warning this year as bushfires, smoke haze and drought crimp already-weak consumer spending.

(*Others mentioned: SUL, MOZ, KGN)

All Data Weekly