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.

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