Humble Group: Eyes on Q2 for higher organic growth q-o-q - ABG
This is a third party research report and does not necessarily reflect our views or values
'25e-'27e adj. EBITA down 3%
Already strong gross margin in Q1 can turn even stronger in H2
~9x '25e EV/EBITA is ~40% below peers
Takeaways from the report
The Q1 report was characterised by slightly weaker organic growth than usual because the Easter holidays occurred mid-April (Q2) rather than Q1. We did not anticipate the Easter impact to be that significant, and we therefore put a somewhat higher weight on Q2 in terms of organic growth delivery. The gross margin was strong at roughly 32%, as some of the company's purchasing and shipping efficiencies have come into effect. However, the 9% y-o-y gross profit growth translated into 4% y-o-y adj. EBITA growth due to discretionary sales & marketing expenditure. In terms of cash flow, we did not see the latent working capital release that we had expected due to tax deferrals.
Already strong gross margin in Q1 can turn even stronger in H2
~9x '25e EV/EBITA is ~40% below peers
Takeaways from the report
The Q1 report was characterised by slightly weaker organic growth than usual because the Easter holidays occurred mid-April (Q2) rather than Q1. We did not anticipate the Easter impact to be that significant, and we therefore put a somewhat higher weight on Q2 in terms of organic growth delivery. The gross margin was strong at roughly 32%, as some of the company's purchasing and shipping efficiencies have come into effect. However, the 9% y-o-y gross profit growth translated into 4% y-o-y adj. EBITA growth due to discretionary sales & marketing expenditure. In terms of cash flow, we did not see the latent working capital release that we had expected due to tax deferrals.