Lynch Group (LGL) H2 2024 earnings summary

Executive summary

• FY 2024 results met updated guidance, with group revenue at AUD 397.7 million, up 1% year-over-year (2% underlying), driven by resilient Australian demand and offset by declines in China due to weak consumer confidence and lower pricing.

• Group EBITDA was AUD 39.6 million, down 7% year-over-year, in line with guidance; Australia EBITDA rose 50% to AUD 31 million, while China EBITDA fell 61% to AUD 8.6 million.

• NPATA was AUD 9.2 million, with Australia profitable and China loss-making.

• Non-cash impairment of AUD 30.1 million was recorded against China goodwill in 1H FY24, with no further impairment at year-end.

Financial highlights

• Group revenue reached AUD 397.7 million, up 2% on a like-for-like 52-week basis compared to the prior year.

• Group EBITDA was AUD 39.6 million, down 7% year-over-year.

• NPATA was AUD 9.2 million, down 41% year-over-year.

• Cash conversion remained strong at 99%, with Australia exceeding 100% due to inventory reductions.

• Final fully franked dividend of AUD 0.08 per share declared, bringing total FY 2024 dividends to AUD 0.12, up from AUD 0.07 in FY 2023.

Outlook and guidance

• Australian revenue growth expected to remain positive, supported by supermarket channel strength and new branding initiatives; first seven weeks of FY25 up 5% on prior year.

• China revenue anticipated to remain under pressure due to weak consumer sentiment and pricing; recovery depends on improved confidence and spending.

• Australian EBITDA margin expected to track at improved FY 2024 levels; China margin improvement tied to pricing recovery.

• ERP system upgrade in Australia to incur AUD 1.5 million in underlying adjustments to FY25 EBITDA.

• Further trading update to be provided at the AGM in November 2024.