Thorn Group Limited (TGA)



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General Information
Company Name: Thorn Group Limited
Stock Code: TGA
Website: www.thorn.com.au
GICS Sub-Industry: General Merchandise Stores
Market Cap ($M): 340
Equiv. Shares (M): 151

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 2.260 $ 2.260 $ 2.270 $ 2.260 $ 2.260 116,018 0%

Current Broker Consensus Recommendation more
Recommendation: Hold (3)
Recommendation Date: 25th Jul 2014
Brokers Surveyed: 3

Company Overview

Business Description:
Thorn Group Limited (TGA) is an operator in the household goods rental market in Australia. TGA provide a range of audio/visual products, kitchen and laundry appliances, computers, furniture and fitness equipment through its Radio Rentals and Rentlo national store network. TGA also provides other services through its Cashfirst, Thorn Business Services, Thorn Equipment Finance and National Credit Management Limited.

Strategy Analysis:
TGA's broad strategy is to become Australia's leading provider of retail and financial services to the sub-prime consumer and commercial markets. They aim to continue to grow revenue in the core Radio Rentals and Rentlo (RR&R) businesses through continuation of their effective marketing campaign and the re-design of a number of their stores. Since 2011, TGA has focused on growth in financial services with the acquisition of NCML, the start-up of Thorn Equipment Finance (TEF) and Cashfirst. Thorn Group reported NPAT down 2.1% to $14.01m for the half-year ended 30 September 2012. Revenues from ordinary activities were $100.46m, up 4.1% from the same period last year. Diluted EPS was 9.55 cents compared to 9.77 cents last year. Net operating cash flow was $48.75m compared to $34.82m last year. No dividend was declared.


Financial Summary
Year to Mar NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 34.0 22.7 8.9 9.9 13.0 5.8 100.0
2015  F 31.2 20.9 10.0 10.8 12.0 5.3 100.0
2014  A 28.4 19.0 -6.7 11.5 11.0 5.1 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
Harvey Norman (HVN) $3,272 M 0.0284 -0.0574 0.1672 16.0752 17.0543 14.6110 0.0292 0.0357 0.0438
Thorn Group (TGA) $342 M -0.0094 0.0910 0.0999 12.0042 11.0034 10.0044 0.0485 0.0498 0.0543

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
TGA 0.81 11.6 1.97 1.22 1.45
Market 0.99 16.7 1.26 2.13 1.66
Sector 1.11 16.3 2.20 8.13 0.95

Directors
Name Position Start Date
Mr James Marshall Executive Director,Chief Executive Officer,Managing Director 05 May 2014
Mr David Carter Non-Executive Chairman 03 November 2006
Ms Joycelyn Morton Non-Executive Director 01 October 2011
Mr Peter William Henley Non-Executive Director 22 May 2007
Stephen Kulmar Non-Executive Director 15 April 2014

Management
Name Position
Peter Eaton Chief Financial Officer,Company Secretary
Antoine Laval GM Equipment Finance
Richard Shepherd GM Financial Services
James Marshall GM Rental
Ian Scott GM Risk
GM Equipment Finance GM, NCML

Substantial Shareholders
Holding Name
8,951,373 (6.06%) Perennial Value Management Limited
8,933,167 (6.05%) Vinva Investment Management
8,501,910 (5.76%) Investors Mutual Limited
8,104,064 (5.49%) Kinetic Investment Partners Limited

Calendar of Events
Date Event
27 July 2015 Report (Annual)
19 May 2015 Report (Prelim)
18 November 2014 Report (Interim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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