Is the BWX Ltd (ASX: BWX) share price a buy?
What is BWX?
BWX is a natural beauty business which operates multiple brands and they are sold across several countries.
Sukin is the biggest brand within the BWX portfolio and it's the number one natural skincare brand in Australian pharmacies.
Andalou Naturals is a US based business that BWX acquired. It's the number one natural facial skincare brand in the US.
Mineral Fusion is another US business that BWX bought. It's the number one natural cosmetics brand in the US.
BWX also owns Nourished Life, which is the number one natural personal care and lifestyle business-to-customer platform in Australia.
What has BWX been up to in recent months?
The BWX share price is still a little lower than it was at the start of the year. However, it has been a very volatile year because of COVID-19. BWX shares plunged down to $2.57, so it's up 65% since then. But BWX is actually 17% lower than it was at the end of August 2020.
That strength of the share price came just after BWX reported its FY20 result.
In that result it reported net revenue increased 26% to $187.7 million, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) went up 30% to $27.5 million and statutory net profit after tax (NPAT) grew by 59% to $15.2 million.
BWX also saw its gross profit margin increase, it also saw an improved cash and net debt position. Its cash position grew from $14 million to $28.6 million. It ended with net debt of $32 million.
The ASX share is planning for a new manufacturing hub in Melbourne which is anticipated to deliver growth above and beyond its current 3-year plan.
When it released its FY20 report it said that it had made significant distribution gains for Sukin, Andalou Naturals and Mineral Fusion across its growth markets of Asia Pacific and USA. In the US its total points of distribution grew to over 1,000 doors with Target USA adding 330 new doors.
Is the BWX share price a buy today?
In FY21 it's expecting to achieve ongoing growth in revenue and EBITDA of at least 10% in FY21. Management believe the company is well positioned for long-term sustainable growth.
However, at the AGM today the company said that it expects FY21 first half revenue for Mineral Fusion to be down but it's focused on achieving a recovery in the second half.
BWX also announced a strategic partnership with THG, which is a global technology platform specialising in taking brands direct to consumers to grow BWX in Europe and Asia.
THG will provide a full service solution including localised digital capabilities for taking BWX brands direct to consumers. It's initially targeting five priority markets, which will increase to 14 markets in FY22.
The aim of this agreement is to help BWX reach its revenue target of $30 million to $50 million for Europe by the end of FY23.
BWX's chief operating officer Rory Gration said the partnership was important for bringing BWX's product innovation to more consumers at a time when the natural beauty category is thriving:
"We are delighted to announce our partnership with THG, as we leverage the already-strong consumer connection to our brands Sukin and Andalou Naturals in the UK market over recent years.
"Combining BWX's house of natural brands and insights with THG's digital services, cross-border expertise and sophisticated technology means we can build more meaningful footprints in what is a fast-evolving retail environment."
Is the BWX share price a buy? It's currently rated as a hold by the Motley Fool Share Advisor service.
