MAILPAC reports 31% decline in six months net profit

August 12, 2022

Mailpac Group Limited (MAILPAC)’s revenues amounted to $806.76 million for the six months ended June 30, 2022, reflecting a 10% year over year decrease from $896.06 million booked in 2021. While, for the quarter, revenues closed at $408.29 million (2021: $426.05 million). According to management, “In Q2 2022, Mailpac performed significantly better than the previous quarter and has already closed much of the gap compared to the comparable quarter in 2021 – a period bolstered by the lack of movement during the pandemic.”

Furthermore, “However, the Company and industry continue to be affected by supply chain challenges and record levels of inflation. However, Mailpac is already seeing the benefits of its cost-cutting initiatives and customer entrenchment strategy, as the Company continues to lead the e-commerce market in providing unmatched services to e-commerce consumers.”

Cost of sales totalled $422.64 million (2021: $458.95 million) which resulted in gross profit of $384.11 million (2021: $437.12 million). Gross profit for the quarter amounted to $201.28 million, 5% down from $211.98 million booked in 2021.

Operating expenses for the period under review closed at $221.83 million, 5% higher than $212.08 million booked twelve months earlier. Management noted that, “Fixed expenses remain in line with management’s goal of keeping operational cost flat despite the meaningful inflation in the economy. Most of the fixed expenses include the operating cost of our stores and the broad base of staff who facilitate clearance, delivery, and customer servicing.”  Of this:-

Selling and promotion totaled $37.55 million (2021: $34.47 million) as at June 30, 2022.

Administrative and general expenses closed at $184.28 million (2021: $177.61 million), reflecting a 4% increase year over year.

As such, operating profit for the six months period declined to $162.28 million (2021: $225.04 million), while for the quarter, operating profit closed at $94.38 million (2021: $108.31 million).

MAILPAC recorded other income of $8.22 million relative to the $1.24 million booked in 2021, while finance cost for the six months totaled $32.88 million (2021: $27.91 million), reflecting an 18% increase.

Mailpac Limited booked a 31% decline in profit before taxation to $137.62 million (2021: $198.37 million), while for the quarter, profit before taxation closed at $81.31 million (2021: $95.01 million).

No taxes were incurred, as such net profit closed the six months period at $137.62 million (2021: $198.37 million). As for the quarter, net profit totaled $81.31 million (2021: $95.01 million).

Consequently, earnings per share (EPS) was $0.06 for the six months ended June 2022 in comparison to the $0.08 reported in June 2021. For the quarter, EPS closed at $0.03 (2021: $0.04). The trailing twelve months EPS amounted to $0.14. The number of shares used in this calculation was 2,500,000,000 shares. MAILPAC traded on August 12, 2022, at $2.31 with a corresponding P/E of 17.02 times.

MAILPAC noted, “While the Company continues to face pressure from inflation and increased travel, Mailpac continues to innovate and is preparing to launch novel solutions that will enhance the value and efficiency our customers garner from shopping online.”


Balance Sheet at a Glance:

As at June 30, 2022, total assets closed at $717.88 million, 21% higher than the $591.76 million booked for June 2021. Notably, ‘cash and cash equivalents’ was the main contributor to the increase by amounting to $252.63 million (2021: $191.26 million). Also contributing to the increase was ‘Prepayments’ which closed at $42.41 million (2021: nil).

Shareholder’s equity declined to $607.18 million from $495.09 million resulting in a book value of $0.24 (2021: $0.20).


Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.