STOCK WATCH: Strong Start to November for ASX Listed E-Com

As the peak online sales season begins and the response to Q1 FY23 updates settles, the ASX Listed E-Com Index seems to be performing well. In the last fortnight, the E-Com Index is up 7.9%, compared to the ASX200 which is up 2.3% over the same 14 day period.

In the last Stock Watch we noted that Redbubble hit its two-year low in response to its trading update, but that there seemed to be a slight shift in investor sentiment (and indeed was the second best performer on the Index last week). ‘That the Redbubble share price has (somewhat) stabilised bodes well for other retailers in the post-trading update share price slump this week. Will we see the Adore share price lift in next week’s Stock Watch?’ we asked at the time. Now that ‘next week’s Stock Watch’ has rolled around, the answer to that question is: yes.

Like Redbubble, the Adore Beauty share price was trending down last week in response to its Q1 FY23 Business Update. Adore reported that revenue had grown over the two most recent quarters to $54.4 million (down 28% on the prior corresponding period, which was a lockdown period). Active customers of 791,000 were up 12% on a 2 year period, and down 9% on PCP. It said that its year-on-year comparisons were ‘volatile as expected’ as the company ‘cycles a period of significant growth when most of Australia was in lockdown’. It seems the negative investor response was short-lived, with its share price up an impressive 10.3% to $1.66 in the last seven days.

Redbubble has continued to fare well, up 10.7% to $0.57 in the last seven days.

Continuing this pattern, Booktopia was the worst performer on the Index last Stock Watch, after the release of its 2022 Annual Report to Shareholders in which it reported that underlying EBITDA was down 54% to $6.2m. ‘The year under review will go down as one of the most challenging in Booktopia’s 18 year history…’ said Chairman Chris Beare and Acting CEO Geoff Stalley. As with Adore, Booktopia has made an impressive recovery, now up 4.9% over seven days to $0.22. That it’s relatively steady is a positive sign, especially given its last 18 months.

In a perfect example of the E-Com Index being its peak E-Com Index self, last week’s best performer Temple & Webster is this week’s worst performer. It shed 1.1% to $5.54 at close on Monday trending downwards from the $5.93 we saw when it peaked last week.

Kogan is up 2.1% to $3.36 in the last week. Its share price has remained noticeably steady in the last week, which means we’re likely set for a bump one way or the other. The market response to its trading update, and a quarter which reflected a period of ‘subdued sales activity’ seems to be far more measured than others (for now).

Source: Australian Listed E-Com Index based on ASX reporting for the period

Cettire has experienced enormous growth recently (so much so that it had to respond to an ASX price query). In the last week, it is up 13.8% to $1.85. For context, that’s 166.2% growth over 90 days (compared to say, Adore which is up 10.3% in the last three months or Kogan which is down 18% in the same period).

BikeExchange requested a trading halt last Tuesday, which was only lifted yesterday following the release of its announcement regarding the completion of its placement and Share Purchase Plan. It announced a proposed capital raising of up to $5,679,974 (before costs) consisting of a placement raising $2,670,974 (before costs) from professional and sophisticated investors; and a Share Purchase Plan to raise up to $3,000,000 (before costs) from the Company’s eligible shareholders. The funds raised would be used to support platform development, funding ongoing operations, working capital, offer costs and ‘other’. It advised it has received irrevocable commitment to raise the $2,420,974 from professional and sophisticated investors (at $0.016). Last Friday it conducted an offer of new Shares on its share purchase plan to existing shareholders for the same $0.016. The final outcome of the share purchase plan is expected on 19 December. When trading resumed, its share price lifted, up 5.6% over the last seven days to $0.019.

Last May, BikeExchange also issued a Trading Halt pending the release of its announcement regarding material capital raising. The issue price earlier in the year was $0.02 per New Share to raise approximately $6 million (before costs), with the funds to be used to ‘support working capital and additional growth initiatives’.

Will this latest placement and Share Purchase Plan give BikeExchange the gear change it needs to climb this latest mountain, or has it hit a wall?

Figures are current as at close of ASX on 7 November 2022. This is analysis only and not intended as investment advice.

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