Okay I won't disappoint you NBT. Here's the thing, for the vast majority of FY16 the exchange rate was 65 cents..even if we assume an average of 70 cents this year, (closed at 72 as you quite rightly said W69) that's a fairly conservative 8% reduction in the cost of purchases so I see their profits exceeding FY15 on the exchange rate alone. Then add in Di Humperies reinvigorating the fashion pizazz into the product line at Glassons and with half normal weather we're off to the races with $20m+ profit in FY17.
Here's what they said this year - Sales up circa $2m to $ 223.5m They mentioned gross profit dropped ~3% to 56.5% so:-
Purchases must have been $97.21m Kiwi, (assume for a minute stock level was consistent and average exchange rate of 65 cents U.S.) Purchases in U.S$63.18m
Gross profit $126.3m = 56.5% - gives $13,5m net profit
Now if we assume an average of U.S. 70 cents this year (which currently looks conservative) those purchases would have cost them $U.S.63.18m / 0.7 = $90.25m Kiwi a reduction of just on $7m so GROSS PROFIT WOULD BE SEVEN MILLION DOLLARS MORE AT US 70 CENTS AND WE ARE CURRENTLY AT 72 CENTS !!
That's $13.5m net profit plus the extra $7m gross profit which flows straight to the bottom line so that's $20.5m for FY17 just based on the currency increase !, assuming all other costs remain the same, but the word seems to be they've been trying to pull costs out of their structure to cope with the lower currency so one would hope we get the full year's benefit of those efficiency gains this year in addition to the above favourable impact from the currency. Then factor in Di Humphries well known positive influence and if the weather starts to be half normal...well we could easily see $4 again this time next year and profit somewhere well north of $20m.
This is too easy mate, for anyone that knows where the dollar has been and its effects on importers and then the subsequent effect when it goes back up (AFTER the company has been vigorously pulling other costs out of its cost structure to cope with the lower dollar)...for anyone with some vision of what's going to happen its clear profitability is highly likely to AT LEAST be restored to FY15 level's if not considerably beyond. This could easily do a Kathmandu style recovery and grow profits by 67% next year to $22.5m !!
On top of that the 15% gross dividend yield which the company has confirmed makes this arguably the most compelling dividend yielding stock on the NZX with a very long and stable track record of paying exceptionally stable and exceptionally high level's of dividends.