Max Stock revenue up 15% in Q3, stock jumps 10% by Investing.com

© Miro Maman, Max Stock PR

| Polly Tal, Investing.com |

The Max Stock chain (TASE:) published on Monday its financial results for the third quarter of 2022, which show double-digit growth, an increase in profits and an increase in the flow from current operations.

The share of Max Stock jumps on the Tel Aviv Stock Exchange at a rate of about 10% after the publication of the reports, after it fell 52% since the beginning of the year and its market value dropped to about NIS 763 million.

The company’s revenues in the third quarter grew by about 15% to about NIS 294 million, compared to about NIS 256 million in the corresponding quarter last year. The double-digit growth in revenue was mainly due to the opening of new stores during the period and an increase of about 4% in revenue from same stores due to the timing of the holidays this year and strong sales of products in preparation for the return to school and the start of the school year.

Revenues in the first nine months of the year grew by about 9% to about NIS 797 million, compared to about NIS 731 million in the corresponding period last year. The growth in revenues was mainly due to the opening of new stores during the period, which was partially offset by a moderate decrease of about 1% in revenues from same stores.

The quarterly gross profit increased by approximately 19% to approximately NIS 118 million, compared to approximately NIS 99 million in the corresponding quarter last year. The increase in gross profit was due to the aforementioned increase in the scope of the company’s activity, alongside an improvement in gross profitability in the quarter due to a decrease in logistics costs as a result of the reduction in inventory volumes.

The gross profit rate in the quarter rose to approximately 40.1% of revenues, compared to approximately 39.3% of revenues in the previous quarter and compared to approximately 38.6% of revenues in the corresponding quarter last year.

The net profit attributable to the shareholders in the third quarter increased by about 15% to about NIS 19.6 million, compared to a net profit to the shareholders in the amount of about NIS 17.1 million in the corresponding quarter last year, and its share of sales remained about 6.7%. The increase in net profit reflected, as mentioned, the increase in the scope of the company’s activities.

Adjusted net profit for shareholders (excluding share-based payment) in the third quarter increased by approximately 9% to approximately NIS 23 million, compared to approximately NIS 21 million in the corresponding quarter last year.

The net profit attributed to the shareholders in the first nine months amounted to approximately NIS 45 million, compared to a net profit to the shareholders of approximately NIS 54 million in the corresponding period.

Adjusted net profit for shareholders (excluding share-based payment) in the nine months amounted to approximately NIS 56 million, compared to approximately NIS 66 million in the corresponding period.

Adjusted EBITDA increased in the quarter by approximately 15% to approximately NIS 42 million, compared to approximately NIS 36 million in the corresponding quarter last year. Also, there was an increase in the adjusted EBITDA of about 43% compared to about NIS 29 million in the second quarter of this year.

The net cash flow resulting from current operations in the quarter jumped more than 4 times to about NIS 87 million, compared to a flow in the amount of about NIS 21 million in the corresponding quarter.

The increase was mainly due to changes in working capital – an initiated and planned decrease in the volume of inventory, while in the corresponding quarter of last year the company stocked large volumes of inventory due to fear of delays in the global supply chain, along with an increase in supplier credit.

The company has cash and cash equivalents of approximately NIS 83 million. On the other hand, she has a financial debt of about NIS 49 million. Accordingly, the company has net cash of approximately NIS 34 million.

The Max Stock chain currently operates 55 branches nationwide. In recent quarters, the chain has added approximately 9,300 square meters of commercial space through the opening of 2 new stores in the cities of Nahariya and Nof HaGalil and 3 new branches (which replaced existing branches) in Dimona, Rasheltz and Kfar Saba.

The company also signed contracts to open additional stores in Barot Yitzhak, Mishor Adumim and Gush Etzion, which are expected to open during the first half of 2023. In addition, two deals were signed with two franchisees in the Jerusalem area.

In August 2022, the company’s board of directors approved the company’s entering into a binding agreement with Fortera Properties LDA, the local partner in Portugal, to establish a chain of Max Stock stores in Portugal. The company is working with its business partners to establish the activity and estimates that the first store will open by the end of the first half of 2023.

Uri Max, founder and CEO of Max Stock:

“We conclude the third quarter of 2022 with double-digit growth in revenues to a record close to NIS 300 million, this under the influence of approximately 4% growth in revenues from same stores and the continued opening of new stores. Alongside this, we present a continued improvement in gross profitability as a result From the decrease in logistics costs and the proactive reduction of inventory volumes in light of the easing of disruptions in the supply chain. We believe that the company’s leading positioning, along with its operational strengths, will contribute to the company’s continued growth trend.”

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