Jamieson Wellness Inc

Jamieson Wellness Inc (TSX: JWEL) is a food & drug retailer Company based out of Canada. It offers products related to health and wellness. The Group is engaged in the business of developing, manufacturing, and marketing of natural health and vitamins products. JWEL offers VMS (vitamins, minerals and supplements) products under Jamieson and LVHS brands.

Financial Highlights – First Quarter of the Financial Year 2020 (31^st March 2020, CAD, thousand)

(Source: Quarterly Report, Company Website) 

In the first quarter of the financial year 2020, driven by an increase in revenue from Jamieson Brands for the period, the revenue increased to CAD 84,523 thousand as against CAD 72,578 thousand in the Q1 FY2019. The Earnings from operations stood at CAD 12,359 thousand in Q1 FY2020 versus and Earnings from operations of CAD 9,911 thousand in Q1 FY2019. The PBT (profit before tax) increased to CAD 11,180 thousand in Q1 FY2020 versus a PBT (profit before tax) of CAD 7,466 thousand in Q1 FY2019. The net income stood at CAD 8,011 thousand in the first quarter of the financial year 2020 versus CAD 5,384 thousand in the first quarter of the financial year 2019, reflecting an increase in revenue. The Group’s basic and diluted earnings per share stood at $0.20 in the first quarter of the financial year 2020 versus a basic and diluted earnings per share of $0.14 in the first quarter of the financial year 2019. The cash balance stood at CAD 5,227 thousand as on 31^st March 2020 versus CAD 198 thousand as on 31^st December 2019. The total assets stood at CAD 579,465 thousand as on 31^st March 2020 versus CAD 561,775 thousand as on 31^st December 2019.

Share Price Performance

Daily Chart as of 25^th June 2020, after the market close (Source: Refinitiv, Thomson Reuters)

Jamieson Wellness Inc shares closed at CAD 34.46 after the market close on 25^th June 2020. Stock's 52 weeks High is CAD 34.67 and Low is CAD 19.67.

Key Risks

The Group needs to manage the operating expenses unless it results in further deterioration in financial performance in the coming years. The impact of covid-19 mayhem might put a dent on the operational and financial performance in the short term. Due to the outbreak of Covid-19, the Group will pause all development and acquisition activities and will take measures to preserve cash and reduce costs.

Conclusion

The Group is focusing on growth, customer relevance and a distinctive way of working across the business. The Company continues to implement the strategy and business model to deliver returns. The Group has shown an increase in financial performance in the first quarter of the financial year 2020. Both the top-line and the bottom-line performance have improved for the period. JWEL expects revenue to grow from 5.5 per cent to 9 per cent and adjusted EBITDA to be ranging from CAD 80 million to CAD 84 million in the FY2020. The liquidity position of the Company remained strong with the well-positioned balance sheet. The Group expects domestic market to grow from 3 per cent to 5 per cent and international market from 25 per cent to 35 per cent, which will offer JWEL with multiple growth opportunities and expand the operations in new markets. The Company stays focused on building the long-term health of the brands, a culture of everyday efficiency, and supported by data-led insights.

Based on the above rationale, we have given a “Hold” recommendation at the closing price of CAD 34.46 (as on 25^th June 2020).

Disclaimer

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