Donville Kent Roe reporter - they are of the opinion that these bonus payments (
~ $20m) are a one time event that will significantly boost profit margins in fiscal 2024. Keep in mind that the market cap is only $ 143.85m or only about 7 times last years bonus payments.
- the company was able to generate ~ $150 in cash flow against a backdrop of rising USD, and inflationary cost pressures. Wage pressure is moderating and cotton prices are down.
- the company makes the majority of their profits (over 100%) in Q2 + Q3 (not Q3 + Q4 as mentioned in the report)
- based on normalized earnings and after our discussion with management, the company is trading at a price to earnings of 2.2!
- we continue to acquire shares in Reitman while partially offsetting retail recession risk by shorting more expensive and levered retail competitors.
https://donvillekent.com/wp-content/uploads/2023/05/DKAM-ROE-Reporter-April-2023-Final.pdf