Max Stock – Investors reacted negatively to the reports

by time news

The company continues its growth trend – currently operates 53 stores; Since the beginning of the year, the chain has opened 4 stores and intends to open 3 more stores by the end of next year.

Network customers buy more with each purchase – In the first nine months of the year, there was an 11% increase in the expenditure of an average basket per customer in a large store, compared to the corresponding period last year.

Over the last few quarters, the company has significantly increased its inventory volume in order to maintain supply continuity and as part of its assessments to deal with the rise in transportation and commodity prices.

Uri Max, Co-CEO of Max Stock: “We conclude the first nine months of 2021 with a double-digit growth rate in revenue, achieved thanks to the opening of new stores and mainly from a 17% increase in sales from identical stores – a figure that illustrates the strength of the ‘Max Stock’ brand and customers’ desire to enjoy a shopping experience. From the range of products, as well as quality service and attractive prices. Over the past few quarters we have significantly increased the company’s inventory in order to ensure continuity of supply, and as part of our assessments to deal with rising transport prices and commodity prices. This is Max Stoke’s largest branch today, and we are witnessing active activity on the part of the branch’s customers already at this stage. Max Stock currently operates 53 stores nationwide, from Kiryat Shmona to Eilat, and during the coming year we are expected to open 3 new stores, according to the business plan To accelerate the growth rate in the coming years. “

Company Max Stock Reported its financial results for the first nine months of 2021, indicating continued revenue growth due to the opening of new stores and an increase in sales from identical stores as well as an increase in profits. This, excluding revenues from protective equipment sold to institutional customers and security bodies with the eruption of the corona and had a one-time impact on operations in the corresponding period last year. It should be noted that there was no effect of protective equipment sales on third-quarter results last year.

Results of the first nine months of 2021 (compared to the corresponding period last year and in the neutralization of the protection equipment activity):

Revenues in the first nine months of 2021 grew by 20% to NIS 731 million, compared with NIS 610 million in the corresponding period last year – growth attributed to the opening of new branches, an increase of 17% in sales from identical stores, and the fact that in March and April each year The chain stores were closed following the Corona crisis.

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Gross profit in the first nine months of 2021 increased by 19% to NIS 284 million, compared with NIS 239 million in the corresponding period last year. The rate of gross profit in the period was about 38.8% compared to about 39.3% in the corresponding period last year and was mainly affected by an increase in shipping costs and logistics costs.

Operating profit in the first nine months of 2021 increased by 6% to NIS 103 million, compared with NIS 97 million in the corresponding period last year. The operating profit rate in the period was 14.1%, compared to about 15.9% in the corresponding period last year. The decrease in the operating profit rate was mainly due to the increase in salary and property tax expenses due to the opening of new branches that have not yet reached full maturity, an increase in expenses based on share-based payment, and the fact that in the corresponding period last year the company recognized one-time relief. Shares that are one-time and non-cash remuneration, during the period increased by about 18% to about NIS 115 million and its share of the income increased to about 15.7%.

Net profit attributable to shareholders in the first nine months of 2021 increased by 4% to NIS 54.4 million, compared with net profit to shareholders of NIS 52.4 million in the corresponding period last year. Adjusted net profit for shareholders (excluding one-time effects – share-based payment and issue expenses last year) increased by 16% to NIS 66 million, compared with NIS 56.8 million in the corresponding period last year.

Adjusted EBITDA (before the implementation of IFRS16, share-based payment and issue expenses last year) in the first nine months of 2021 increased by 9% to NIS 109 million, compared with NIS 100 million in the corresponding period last year.

Excluding the activity of protective equipment, the company recorded stability in the first nine months of 2021 with revenues totaling NIS 731 million, compared with NIS 734 million in the corresponding period last year, an increase of 12% in gross profit to NIS 284 million compared to NIS 254 million. NIS, as well as a 2% increase in net profit for shareholders to the amount of NIS 54.4 million, compared with NIS 53.2 million in the corresponding period last year.

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Highlights of the third quarter of 2021:

Revenues in the third quarter of 2021 amounted to NIS 256 million, compared with NIS 262 million in the corresponding quarter last year. The decrease in revenues was mainly due to a lack of activity days in September due to the timing of the Tishrei holidays this year, and as a result there was a decrease of about 3% in revenues from identical stores in the quarter.

Gross profit in the third quarter of 2021 amounted to NIS 99 million, compared with NIS 102 million in the corresponding quarter last year. The gross profit margin for the quarter was approximately 38.6% of revenues, compared with approximately 38.3% of revenues in the previous quarter and compared with approximately 39.1% of revenues in the corresponding quarter last year. The decrease in the gross profit margin, compared to the corresponding quarter last year, was due to the increase in shipping costs and logistics costs.

Operating profit in the third quarter of 2021 amounted to NIS 34 million, compared with NIS 41 million in the corresponding quarter last year. The operating profit rate in the quarter was about 13.3%, compared to about 13.5% in the previous quarter and compared to about 15.8% in the corresponding quarter last year. The decrease in the rate of operating profit, compared to the corresponding quarter last year, was mainly due to an increase in salary and property tax expenses due to the opening of new branches that have not yet reached full maturity and an increase in expenses for share-based payment. Operating profit, net of share-based compensation, which is a one-time and non-cash reward, amounted to NIS 38 million in the quarter and its share of revenues was approximately 14.8%.

Net income attributable to shareholders in the third quarter of 2021 amounted to NIS 17.1 million, compared with net income to shareholders of NIS 20.7 million in the corresponding quarter last year. Adjusted net profit to shareholders (excluding one-time effects – share-based payment and issue expenses last year) amounted to NIS 21 million in the quarter, compared with NIS 26.3 million in the corresponding quarter last year.

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Adjusted EBITDA (before the implementation of IFRS16, share-based payment and issue expenses last year) in the third quarter of 2021 amounted to NIS 36.3 million, compared with NIS 45.8 million in the corresponding quarter last year.

Balance sheet data for September 30, 2121 and main highlights:

The company has cash and cash equivalents in the amount of NIS 47 million. On the other hand, the company has a gross financial debt in the amount of NIS 70 million. Accordingly, the company has a net financial debt of approximately NIS 23 million.

The capital attributed to the company’s shareholders amounted to NIS 171 million, following the distribution of a dividend of NIS 70 million paid in June this year.

Inventory – During the first nine months of 2021, the company increased the balance of inventory to NIS 200 million, compared to NIS 127 million at the end of 2020, in order to cope with the increase in transport and goods prices and ensure continuity of supply.

Opening branches – During the first nine months of 2021, the company opened stores owned in the cities of Ramla and Sderot, as well as another branch in Tel Aviv based on a franchise model. The existing branch). The company intends to open 3 new stores owned by it in the cities of Nof Hagalil, Kfar Saba and Nahariya, by the end of next year.

Average customer basket – During the first nine months of 2021, there was an increase of about 11% in the average basket of a customer in a large store of the chain, compared to the corresponding period last year, and there was an increase of about 12% in the average basket of a customer in a small store of the chain (“Max 20”). ), Compared to the same period last year.

At the beginning of the month, Ibn Newman announced his desire to end his term as co-CEO of the company at the end of January 2022. Even will continue to serve as a director in the company and will continue to operate in the field of investor relations.

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