Yes,the train is just leaving the station as far as Richelieu Hardware is concerned.But 2021was a very active year for Richelieu(RCH).It made 5 acquisitions including 2 in U.S.A.and one of them was a door and window maker in New Brunswick.Consequently Q1 sales were almost 33% higher than in 2021 with a 50% splurge in sales in U.S.A.With this new growth RCH now has a market cap of $2 billion.Not a rival to Canadian Tire yet but it has a good market share in Quebec and Eastern Canada.
Q1 Highlights
RCH is a specialty hardware company primarily located in Quebec and with it's new acquisitions it brought in an additional annual sales of $70 million.And one of the most recent acquissitions was a window and door manufacturer in New Brunswick.And with these additional sales Richelieu has increased it's EBITDA margin.Consequently both net income with a 26% and e.p.s. have increased,So that net earnings per share was $1.37 for the first half and it is on track to hit almost $3.00 per share for the year.
Consolidation of it's Acquisitions
RCH saw a 51% increase in American sales over 2021 from it's American acquisitions.But investors will have to see if some of these sales shrink in Q3 and Q4 after consolidation.At the same time investors will have to see if RCH can increase it's sales from it's new window and door manufacturer in New Brunswaick.For example, can RCH put new windows and doors and related products in it's Quebec outlets?If these problems can be handled then maybe shareholders will see annual e.p.s. of $2.80-$3.00.And then shareholders may be rewarded with a higher P/E ratio of 14-15 because of this new growth.As a result this blog is forecasting a target price of $42-$45 by the early part of Q4.
