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Al Rajhi Capital selected Lagam Sports Target Price (fitness time)), Unchanged at SAR 90 per share, resulting in a 13% increase in share price following the announcement of the second quarter results.
The research company, in a report released Monday, maintained its rating of the company, recommending an increase in its shares.
Al Rajhi Capital said Lajam Sports Company had announced many numbers for the second quarter of fiscal 2019, with net profit up 24 percent to 31 million RS, or 17 percent above average badysts, or 42.5 million SAR.
The growth factor for net income growth was a double-digit growth of 17% in revenue, which was supported by the increase in the number of centers, the improvement in revenue growth of existing centers and the growth of individual training (growth of 7.5%). Millions compared to the second quarter of fiscal year 2018).
Despite a high cost of sales of SAR 18 million, the gross profit margin increased by 100 basis points, probably due to the change resulting from the application of IAS 16.
"There was a noticeable improvement in operating profit margin, which increased by 600 basis points, mainly due to lower selling and general and administrative expenses (-22% year-on-year), as well as than the decrease in expenses related to advertising and marketing (-42% year-on-year) "This corresponds to our badysis presented in our first report on this company."
For the coming period, Al Rajhi Capital predicted that the company would continue to grow from 18% for fiscal year 2019 to two levels, supported by growth in the women's sector (accounting for nearly 30% of revenues for the year). Fiscal year 2019, compared to about 25% in 2018). ), The Corporate section and the special training section.
Net margins are expected to stabilize at 28% in the medium term.
She emphasized that her perspective was positive for the fitness center industry in general because of increased awareness of their health benefits, government initiatives to promote different sports, healthy lifestyles. and the licensing of fitness centers for women, Physics.
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