Wait and see
IMBALIE IS A beauty products distributor with 153 stores nationally including a distribution agreement with Edgars stores. In the next 3-5 years the group intends to grow its franchise network to 300 stores.
Its recent full-year results showed revenue had risen 15% to R71.5m and positive cash f lows were realised from operating activities. After its acquisition of Perfect 10, a chain of beauty studios, the group signed an exclusive distribution deal to distribute BioEffect, the only skincare product range in the world to contain a replica of human growth factors produced in plants. Thebe Stockbroking smallcaps analyst Keith McLachlan says of the deal: “BioEffect may be a significant contributor in time, but it is too early to say how this product (that was developed in the European markets) will be taken up by the first emerging market (South Africa) it is being launched in.”
Imbalie has 345.5m outstanding shares and currently trades at 19c/share on a P/E of 32. I’m adopting a wait-and-see approach.