Shares of Premier Investments Limited (AU:PMV) plunged over 9% after the company stated that it is delaying the demerger of Smiggle stationary stores while announcing the FY24 results. The company stated that it is focusing on a separate proposal involving other parts of its business from the department store chain Myer Holdings (AU:MYR).
Premier Investments owns and manages a range of retail and wholesale enterprises across Australia, New Zealand, Singapore, and the UK.
Premier Releases Annual Results for FY24
In FY24, Premier reported a net profit of AU$257.9 million, down from AU$271.1 million in the previous fiscal year. Meanwhile, the company’s global sales declined 2.9% to AU$1.6 billion, reflecting a difficult year for discretionary retail.
Among the company’s brands, Smiggle reported global sales of AU$296 million for FY24, down 7.4% from the record level in the previous year. On the other hand, Peter Alexander (Premier’s sleepwear business) was the company’s strongest performer over the past year, achieving growth of 6.2%.
Despite the challenges, the board increased Premier’s final dividend by 16.7% year-over-year to AU$0.70 in FY24.
PMV Delays Smiggle Demerger
Premier Investments announced in March, along with its half-year results, that it will demerge Smiggle by January 2025. It also announced plans to demerge its Peter Alexander business by the end of 2025. The demerger was part of the company’s strategic review, designed to create better long-term growth opportunities for its brands.
However, the company now sees significant future growth opportunities for Smiggle and is no longer looking to demerge. Moving ahead, the company will assess any strategic review to maximize shareholder value, while safeguarding the potential and integrity of each business unit.
Meanwhile, Premier Investments is still considering a potential merger of its apparel brands with Myer.
Is PMV a Good Investment?
On TipRanks, PMV stock has received a Hold rating based on three Buys, five Holds, and one Sell recommendation. The Premier Investments share price target is AU$33.53, which is 10.5% above the current trading price.
