CEO Max Stock sells shares for NIS 8.7 million – the capital market

Uri Max, co-CEO and director of the chain of home product stores at discounted prices

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Sells shares worth NIS 8.7 million and reduces its holdings in the company by 2.5%.

Last night, Max sold about 350,000 shares at a price of NIS 13.55 per share. The day before, Max had sold about 290,000 shares at a price of NIS 13.95 per share.

After the change, Max will continue to hold the company at a rate of 17.27%. The company completed its IPO only last September and at a company value of about NIS 1.7 billion, when it is now close to NIS 2 billion. This value expresses a historical profit multiplier of about 22.

Uri Max’s partner in controlling the Max Stock network is the Apex Fund, which is managed by Zehavit Cohen. Uri Max has already exercised shares at the time of entering Apex at a value significantly lower than its current value and is now broadcasting that this value is probably suitable for sale. On the face of it Max Stock is one of the most expensive retail chains on the stock market.

Reports for the third quarter
In its reports for the third quarter of 2020, the company reported a profit of NIS 21 million and revenues of NIS 262 million in the third quarter, an increase of about 25% compared to revenues of about NIS 210 million in the corresponding quarter last year. Most of the increase in the third quarter is attributed to an increase in the volume of activity of the company, which during the first nine months of the year, inaugurated two new branches in the cities of Raanana and Jerusalem Talpiot operated by subsidiaries and another branch in Haifa. In addition, in October 2020, the company inaugurated another branch in Carmiel.

In the bottom line, the company reported a profit of NIS 20.7 million, compared with a profit of NIS 16.5 million in the corresponding quarter last year.

Adjusted EBITDA amounted to NIS 45.8 million, compared with NIS 29.6 million in the corresponding quarter.

Gross profit rose to NIS 102.5 million, compared with NIS 82.1 million in the corresponding quarter. The margin of gross profit remained unchanged at a level of approximately 39.1%.

Operating profit rose to NIS 41.4 million, compared with NIS 29.2 million in the corresponding quarter.

Corona effects
Despite the restrictions imposed towards the end of the second quarter and during the third quarter, the Company’s store activity continued during the closure period, in accordance with the provisions of the regulations which allowed the continued operation of vital businesses and other businesses defined in the regulations. In March 2020, the company submitted a request to the Ministry of Economy to declare the chain as an essential plant for emergencies, since disinfectant, cleaning and personal hygiene products are sold in its stores (similar to the supermarket chains).

Fox enters as a competitor
A few days after the IPO, Max Stock’s management responded to the network’s entry

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As a competitor with the acquisition of the franchise to operate Jumbo stores in the country, and estimated that the move is not expected to have a material impact on its operations. The company refused to get excited about the entry of the fashion giant into the field, as they say it is already operating in a very competitive market, which includes many players in each of the product categories sold by it. In the background, emphasize the time required to enter the market and establish a chain of stores nationwide, as it operates. The company’s response came in the wake of Fox’s announcement that it had signed an exclusive agreement to establish and operate the Greek JUMBO chain stores in Israel (for the full article).