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Highlights

  • Doman Building Materials Group is a wholesale distributor of building materials and home renovation products.
  • The net revenue of the company declined from CAD 851.3 million in Q1 2022 to CAD 609.1 million in Q1 2023, with a -28.5% YoY change.
  • Doman registered a growing current ratio and reduced its average inventory days, beating the industry median during the third quarter of the year 2023.

A wholesale distributor of construction materials, Doman Building Materials Group is primarily serving new home construction, industrial markets, and home renovation. It offers building products to dealer/lumberyard and home improvement centers.

In recent times, there have been strong fundamentals in its end markets. Consequently, the company expects that the demand for its products will remain resilient in the long run.

Also, the company believes a major proportion of its sales are led by developments in the repair and remodel market. Notably, during the first quarter of 2023, the moving rate for expenditures on improvements and repairs increased by 13.8% year-over-year in the United States.

The company concluded the third quarter of 2023 with higher current ratio and lower average inventory days, beating the industry median. Also, the company managed to pay a quarterly dividend of CAD 0.14 per share.

The downside of Doman’s financials

The net revenue of the company declined from CAD 851.3 million in Q1 2022 to CAD 609.1 million in Q1 2023, with a -28.5% year-on-year change. The decline in revenue was majorly due to a lower contribution from Building Materials segment, where sales decreased by 28.8%.

Also, the company posted 55.2% lower operating earnings during Q1 2023 due to lower revenue and higher depreciation. This resulted in a decrease in the earnings before income taxes to CAD 17.1 million during the quarter from CAD 53.4 million in the previous corresponding period. The decline in revenue led to a lower net income at CAD 14.9 million, compared to CAD 42 million in pcp.

 

Top 10 shareholders
Around 22.71% of the total shareholding of the company is held by its top ten shareholders. While Doman (Amardeip Singh) has the maximum stake in the company with around ­­­19.22% shareholding, Dimensional Fund Advisors, L.P. holds 1.84% shares in the firm.

 

Stock Price Performance
Doman share price declined by over 5.8% over the past 30 days. It has dropped by and around 2.47% in the last three months. The company stock has its 52-week high and low price at CAD 7.71 and CAD 5.30, respectively.

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 19, 2023. The reference data in this report has been partly sourced from EODHD/Others.