| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 13.5% | - | -9.4% |
Auscap's core thesis centers on time horizon arbitrage—buying high-quality, growing businesses at attractive through-the-cycle valuations when short-term concerns create market dislocations. The fund returned 7.8% in June 2026 versus 0.4% for the All Ordinaries, though YTD performance remains negative at -9.4% due to consumer discretionary volatility driven by AI employment concerns, Middle East tensions, and budget impacts on consumer confidence. The manager conducted extensive on-the-ground research in the UK, visiting Nick Scali and Lovisa retail operations. Nick Scali's UK expansion shows early traction with 32% like-for-like sales growth in rebranded stores, with potential to expand from 19 to 60+ locations. Lovisa benefits from competitor Claire's bankruptcy, which closed 590 stores across the US and UK, creating market share opportunity in fast-fashion jewelry across under-penetrated North American and European markets. The manager emphasizes that management teams control business outcomes more than macro factors, maintaining conviction in portfolio holdings. With 42 positions and 98% equity exposure, the fund focuses on companies with international growth runways and strong unit economics.
Time horizon arbitrage creates opportunity to invest in high-quality, growing businesses at attractive valuations when short-term market concerns create dislocations, with focus on companies where management execution drives outcomes more than macro factors.
Manager expects continued earnings growth from portfolio companies over time despite near-term volatility. Emphasizes that management teams have significant control over business outcomes through operational execution, particularly in international expansion. Views current market dislocations as creating attractive entry points for high-quality, growing businesses when priced on a through-the-cycle basis. Remains excited by portfolio quality and positive on long-term earnings trajectory.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 15 2026 | 2026 Q2 | 360.AX, AUB.AX, BHP.AX, CAR.AX, CHC.AX, CQR.AX, CSL.AX, HDN.AX, IEL.AX, LOV.AX, MFG.AX, MQG.AX, NCK.AX, NHF.AX, NWL.AX, REA.AX, REH.AX, RMD.AX, SDF.AX, WTC.AX | Australia, consumer discretionary, Furniture, International Expansion, Jewelry, retail, Store Growth, United Kingdom |
NCK.AX LOV.AX |
Auscap delivered 7.8% in June despite YTD headwinds from consumer discretionary volatility. On-the-ground UK research increased conviction in Nick Scali (32% like-for-like growth, 60+ store potential) and Lovisa (benefiting from Claire's 590-store closure). Manager practices time horizon arbitrage, buying quality growth businesses at attractive valuations during short-term dislocations. Portfolio emphasizes management execution over macro factors, with strong international expansion themes. |
| Apr 30 2026 | 2026 Q1 | 360.AX, ARB.AX, CAR.AX, GMD.AX, HDN.AX, IEL.AX, MQG.AX, NCK.AX, NST.AX, REC.AX, RMD.AX, SHL.AX | active management, AI, Australia, Banking, inflation, small caps, technology, value | - | Australian mid and small caps are trading at extreme discounts despite superior earnings growth, while AI fears create indiscriminate technology selloffs. Auscap sees exceptional value opportunities in quality businesses with sustainable competitive advantages, actively deploying capital into companies that can leverage AI developments rather than be disrupted by them. |
| Jan 6 2026 | 2025 Q4 | 360.AX, APE.AX, ARB.AX, BRG.AX, CAR.AX, CQR.AX, DXS.AX, GMD.AX, HMC.AX, IEL.AX, MQG.AX, NCK.AX, NHF.AX, NST.AX, PLS.AX, QUB.AX, REA.AX, REH.AX, RMD.AX, RMX.AX, SDF.AX, SHL.AX, WTC.AX | Australia, equities, healthcare, industrials, materials, Mining | - | Auscap's Australian equity funds outperformed benchmarks in November, driven by strong materials sector performance including PLS Group and Northern Star. Year-to-date returns of 17.8% and 20.7% significantly exceed benchmarks. Concentrated portfolios maintain full equity exposure with minimal cash, focusing on high-conviction positions across materials, healthcare, and industrials sectors. |
| Oct 10 2025 | 2025 Q3 | 360.AX, AMC.AX, APE.AX, ARB.AX, AUB.AX, BRG.AX, CAR.AX, CQR.AX, CSL.AX, GMD.AX, HDN.AX, IEL.AX, MQG.AX, NCK.AX, NHF.AX, NST.AX, ORG.AX, PLS.AX, QUB.AX, REA.AX, REH.AX, RMD.AX, SHL.AX, WTC.AX | Australia, consumer, equities, healthcare, materials, real estate | - | Auscap's Australian equity funds delivered strong August performance of 6.2% and 5.9%, outperforming benchmarks through concentrated stock selection. Consumer discretionary, materials, and real estate drove returns while healthcare detracted. High equity exposure at 97% with market-neutral beta positioning. Year-to-date outperformance continues with diversified sector approach across 43-52 Australian holdings. |
| Jun 30 2025 | 2025 Q2 | 360.AX, ALQ.AX, AMC.AX, APE.AX, ARB.AX, AUB.AX, BRG.AX, BXB.AX, CAR.AX, CQR.AX, CSL.AX, GMD.AX, HDN.AX, MQG.AX, NCK.AX, NHF.AX, NST.AX, ORG.AX, QUB.AX, REA.AX, REH.AX, RMD.AX, RWC.AX, SHL.AX, SIG.AX, WTC.AX | Australia, equities, Performance, portfolio | - | Auscap's two Australian equity funds delivered solid May 2025 performance with broad sector contributions. The High Conviction fund outperformed with 4.6% returns while the Ex-20 fund returned 5.2%. Both maintain strong year-to-date performance exceeding 12% with concentrated portfolios focused on technology, materials, financials and other key Australian sectors through active stock selection. |
| Apr 8 2025 | 2025 Q1 | APX.AX, ARB.AX, AUB.AX, BHP.AX, BRG.AX, CAR.AX, CQR.AX, CSL.AX, DEG.AX, HDN.AX, JHX.AX, MQG.AX, NCK.AX, NHF.AX, QUB.AX, REA.AX, REH.AX, RGN.AX, RMD.AX, SHL.AX | Australia, equities, financials, healthcare, industrials, materials, technology | - | Auscap's concentrated Australian equity funds delivered modest underperformance in February but maintain strong year-to-date and long-term track records. The High Conviction fund's 14.8% annualized returns since 2012 versus 9.5% for the benchmark demonstrate effective stock selection across 39 concentrated positions, despite recent headwinds from Materials and Technology holdings. |
| Dec 31 2024 | 2024 Q4 | ANZ.AX, APE.AX, ARB.AX, AUB.AX, BHP.AX, BRG.AX, CAR.AX, CBA.AX, CQR.AX, CSL.AX, HMC.AX, JHX.AX, MIN.AX, MQG.AX, NAB.AX, NCK.AX, NHF.AX, QUB.AX, REA.AX, WBC.AX | Australia, banks, private markets, risk, value, volatility | - | Auscap argues that volatility-based risk measures unfairly favor private over public markets, driving dangerous capital flows and benchmark hugging. Australia's Big 4 banks dominate indices despite zero earnings growth and record valuations, making active management difficult. The firm focuses on business fundamentals over price volatility, using market swings as opportunities. |
| Oct 23 2024 | 2024 Q3 | APE.AX, ARB.AX, BRG.AX, CAR.AX, CQR.AX, CSL.AX, HDN.AX, HMC.AX, HUB.AX, JHX.AX, MQG.AX, MRL.AX, NCK.AX, NHF.AX, NWL.AX, PWH.AX, QUB.AX, REA.AX, REH.AX, RMD.AX, SIG.AX | Australia, Building Materials, Expansion, growth, infrastructure, Logistics, Manufacturing, retail |
JHX.AX NCK.AX PWH.AX QUB.AX |
Auscap showcases four core holdings demonstrating their quality-focused investment approach. James Hardie dominates US fibre cement with structural growth, Nick Scali expands into the larger UK furniture market, PWR Holdings targets revenue doubling through global thermal management expansion, and Qube's logistics infrastructure reaches maturity with improving returns. All represent market leaders with clear growth catalysts. |
| Jul 18 2022 | 2024 Q2 | AAPL, AMZN, ANZ.AX, BHP.AX, CBA.AX, COL.AX, CSL.AX, FMG.AX, GOOGL, META, MIN.AX, MSFT, NAB.AX, NVDA, RIO.AX, RMD, STO.AX, WBC.AX, WDS.AX, WOW.AX | active management, Australia, banks, China, Iron Ore, mid cap, Passive investing, Sleep Apnea | RMD | Auscap makes a compelling case for active management in Australia, where the index is overweight struggling banks and iron ore miners facing Chinese demand decline. The manager sees abundant mid-cap opportunities with strong growth prospects while the broader Australian economy benefits from structural tailwinds including population growth and resource demand. |
| Apr 15 2024 | 2024 Q1 | APE.AX, ARB.AX, BRG.AX, CAR.AX, CQR.AX, HDN.AX, HMC.AX, HUB.AX, JHX.AX, MIN.AX, MQG.AX, NCK.AX, NHF.AX, PLS.AX, PSI.AX, PWH.AX, REA.AX, REH.AX, RMD.AX, SHL.AX | Australia, Economy, Housing, inflation, rates, RBA | - | Auscap challenges market expectations for Australian rate cuts given inflation at 3.4% above the RBA's target, driven by housing and services pressures. The economy shows resilience with low unemployment and strong household buffers. The fund returned 3.5% in March with 27.0% year-to-date performance, maintaining concentrated exposure across quality Australian equities. |
| Jan 23 2024 | 2023 Q4 | APE.AX, ARB.AX, BRG.AX, CAR.AX, HDN.AX, HMC.AX, HUB.AX, JBH.AX, LOV.AX, MIN.AX, MQG.AX, NCK.AX, NHF.AX, PLS.AX, PSI.AX, REA.AX, REH.AX, RMD.AX, RWC.AX, SHL.AX | Australia, earnings, Long/Short, mid cap, Quality, value | - | Auscap targets high-quality Australian mid-cap companies that can sustainably grow earnings over time. The fund delivered 18.5% in 2023 versus 13.0% for the market by focusing on businesses with competitive advantages and growth potential. Mid-caps have historically outperformed large caps due to superior earnings growth while maintaining market leadership positions. |
| Oct 20 2023 | 2023 Q3 | CAR.AX, MIN.AX, RWC.AX | Australia, growth, infrastructure, Lithium, Manufacturing, Mining, technology | - | Auscap maintains high conviction in quality Australian growth companies following extensive site visits. Mineral Resources offers multiple organic growth drivers across lithium, iron ore and mining services. Reliance Worldwide executes operational improvements while trading at attractive valuations. Carsales expands internationally with proven technology rollout. Fund focuses on internal business developments over macro conditions. |
| Sep 2 2023 | 2022 Q4 | - | - | - | |
| Sep 11 2022 | 2022 Q3 | - | - | - | |
| Jun 30 2022 | 2022 Q2 | - | - | - | |
| Mar 31 2022 | 2022 Q1 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
RetailManager conducted extensive on-the-ground research in UK retail, visiting Nick Scali and Lovisa stores. Nick Scali's UK expansion shows early traction with 32% like-for-like sales growth in stores branded over 12 months. Lovisa benefits from competitor Claire's bankruptcy, which closed 590 stores across US and UK, creating market share opportunity in fast-fashion jewelry. |
Furniture Jewelry UK Expansion Store Growth Consumer Discretionary |
International ExpansionBoth Nick Scali and Lovisa are executing international growth strategies. Nick Scali has 19 UK stores with potential to reach 60+ stores given population density and competitor sales metrics. Lovisa operates 1,100+ stores across 45+ countries with under-penetration in North America and Europe providing runway for continued expansion. |
UK Global Growth Store Rollout Market Entry | |
Consumer DiscretionaryConsumer discretionary stocks experienced significant volatility in H1 2026 due to AI employment concerns, Middle East hostilities affecting inflation expectations, and budget impacts on residential property and disposable income. Despite near-term headwinds affecting consumer confidence, manager emphasizes management's control over business outcomes and takes a through-the-cycle valuation approach. |
Volatility Consumer Confidence Economic Outlook | |
| 2026 Q1 |
AIAI developments are creating indiscriminate selloffs in technology companies, but Auscap sees opportunities in businesses with sustainable competitive advantages. They focus on companies in regulated markets, with proprietary data, network effects, deep client integration, or relationship-based models that can leverage AI to strengthen their positions rather than be disrupted by it. |
Technology Disruption Competitive Advantage Network Effects Regulation |
Small CapsMid and small cap companies are trading at extreme discounts to large caps, with valuations only seen briefly during COVID-19. Despite delivering superior earnings growth historically (4.9% vs 0.8% for ASX20), these companies are being punished by passive investing flows and market sentiment, creating significant opportunities for active managers. |
Valuations Market Cap Passive Investing Earnings Growth Opportunity | |
InflationMiddle East conflict is driving energy price increases, which historically correlate with inflation. The parallels to 1970s-1980s inflation periods are concerning, potentially leading to higher interest rates. However, Auscap believes high-quality businesses can adapt to changing circumstances and markets are forward-looking regarding conflict resolution. |
Energy Prices Interest Rates Middle East Economic History Central Banks | |
ValueCurrent market conditions represent a classic value opportunity with quality businesses trading at attractive multiples. The extreme bifurcation between large and small caps, combined with indiscriminate selling in certain sectors, is creating opportunities for patient investors to buy high-quality companies at discounted prices. |
Valuations Quality Opportunity Patient Capital Market Dislocation | |
| 2025 Q4 |
MaterialsMaterials sector was the largest positive contributor to returns in November for both funds. The Ex-20 fund specifically benefited from materials exposures, with mining companies like PLS Group, Genesis Minerals, and Northern Star among the top contributors. |
Mining Resources Commodities |
IndustrialsIndustrials sector contributed positively to returns across both funds during November. Companies like Reece and Qube Holdings were among the largest positive contributors to performance. |
Industrial Infrastructure Manufacturing | |
HealthcareHealthcare sector contributed positively to the High Conviction fund's returns in November. Sonic Healthcare was specifically mentioned as one of the largest positive contributors to performance. |
Healthcare Medical | |
| 2024 Q4 |
Private CreditAuscap discusses the significant increase in private credit funds and warns about their short operating history and limited experience with defaults. They note these funds have operated during relative calm with consistently rising property prices. |
Private Credit Defaults Property Funds Risk |
Risk AppetiteThe letter extensively discusses how risk-adjusted return measures favor private markets over public markets due to volatility differences. Auscap argues this creates an illusion where private assets appear superior despite similar underlying risks. |
Risk Volatility Private Markets Public Markets Returns | |
ValueAuscap emphasizes their value-focused approach, looking to pay fair prices or better for investments. They highlight concerns about extended multiples in major Australian banks and focus on avoiding overpaying for assets. |
Value Multiples Pricing Banks Valuation | |
| 2024 Q3 |
Building MaterialsJames Hardie dominates fibre cement with 90% US market share, consistently taking share from vinyl, brick and wood due to superior aesthetics and resistance properties. The company has demonstrated strong earnings growth at high returns on capital with structural growth opportunities ahead. |
Fibre Cement Housing Construction Market Share Durability |
FurnitureNick Scali's UK expansion through Fabb acquisition represents a low-risk entry into a market 2.5x larger than Australia. The opportunity exists to significantly improve gross margins and sales per store compared to Fabb's historic metrics while benefiting from expected UK rate cuts. |
Retail UK Expansion Made To Order Store Productivity Margins | |
Thermal ManagementPWR Holdings is expanding manufacturing capabilities across US, UK and Australia to capitalize on growing demand for cooling systems across motorsports, aerospace, defence and electric vehicle sectors. Management targets doubling revenue within 5 years. |
Cooling Systems Aerospace Defence Manufacturing Growth | |
LogisticsQube's integrated logistics network across 200+ locations provides critical infrastructure with diverse end market exposure. The Moorebank facility is now cash flow breakeven and on track for $80m+ EBITDA at scale, supporting management's upgraded return targets. |
Infrastructure Intermodal Supply Chain Ports Returns | |
| 2024 Q2 |
Iron OreChina's steel consumption peaked in 2020 and is expected to decline to levels similar to other developed countries. With China accounting for 53.9% of world steel production and 50.8% of consumption, declining demand combined with new supply from Mineral Resources (50mtpa) and Simandou deposits (120mtpa) suggests a recipe for lower iron ore prices and declining earnings for the majors. |
Steel China Mining Commodities Supply |
GLP1GLP-1 drugs pose a perceived risk to ResMed's sleep apnea device market due to weight loss benefits, but evidence suggests concerns are overblown. A study of 660,000 patients showed 10.5% increase in likelihood of initiating PAP therapy when prescribed GLP-1s, with higher resupply rates. The focus on weight and health from GLP-1 attention has increased OSA awareness. |
Weight Loss Sleep Apnea Healthcare Pharmaceuticals | |
SteelChina's rapid industrialization drove steel consumption growth since 2000, but consumption peaked in 2020. China's steel consumption per capita growth demonstrates accelerated development, but future consumption is expected to decline toward levels of other developed countries, impacting global steel demand and iron ore requirements. |
China Industrialization Iron Ore Commodities Consumption | |
| 2024 Q1 |
InflationAustralian inflation remains at 3.4%, above the RBA's 2-3% target band, with services inflation particularly problematic at 4.2% and rising. Housing inflation at 4.6% is driven by tight rental markets and record population growth, while wage growth continues without signs of abating. |
Housing Services Wages RBA Target |
RatesBond markets expect interest rate cuts over the next 18 months, but the manager questions this assumption given persistent inflation above target. The RBA's mandate requires inflation to return to the 2.5% midpoint before considering rate cuts. |
RBA Cuts Bond Target Policy | |
AustraliaThe Australian economy shows resilience with unemployment at 3.7%, record high participation rates, and household savings buffers remaining significant. Population growth is at multi-decade highs driven by migration, supporting economic growth and housing demand. |
Economy Employment Migration Growth Resilience | |
| 2023 Q4 |
EarningsThe manager emphasizes that earnings are the ultimate driver of long-term stock price performance. They focus on finding businesses that can sustainably grow their earnings per share over time, as this is what determines total return for investors. The fund targets companies with growing earnings rather than those with flat earnings like the major Australian banks. |
Earnings Growth Sustainable EPS Long Term Performance |
QualityThe portfolio consists of high-quality businesses that are leaders in their field with long financial track records, competitive advantages over peers, and conservative gearing. Many holdings are in net cash positions. The manager defines risk as permanent loss of capital rather than volatility, emphasizing the quality characteristics of their holdings. |
Leaders Competitive Advantages Conservative Net Cash Track Record | |
Small CapsThe fund focuses on mid-cap companies in the ASX300 but outside the ASX20, which have delivered superior earnings growth of 7.5% per annum versus 3.0% for the ASX20. These businesses are substantial enough to be market leaders while still having growth opportunities as they haven't saturated their markets. This is their investment sweet spot. |
Mid Cap ASX300 Growth Opportunities Market Leaders Sweet Spot | |
| 2023 Q3 |
LithiumMIN's lithium business represents the most attractive part of their investment proposition given strong global momentum behind electric vehicle transition. Wodgina mine is ramping production with fresh ore available from December leading to step-change in production, while processing improvements should enable 1,000,000t/year potential production across three trains. |
Electric Vehicles Battery Metals Mining Production Ramp Spodumene |
Iron OreMIN's innovative Onslow iron ore project seeks to mine 35Mt/year initially using autonomous road trains and innovative small-scale port infrastructure. The project forecasts A$40/t FOB costs which would transform their iron ore business into a much lower cost operation, with potential to scale to 50mt/year within 2-3 years. |
Autonomous Transport Infrastructure Cost Reduction Scalability Innovation | |
Mining ServicesMIN's Mining Services business is set for significant growth with EBITDA expected to increase from $484m in FY23 to a run-rate of $1,100m by December 2024. These earnings have attractive annuity-like characteristics due to long-term contracts. |
Annuity Income Contract Mining Growth EBITDA Long Term Contracts |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 15, 2026 | Fund Letters | Auscap Asset Management | NCK.AX | Nick Scali | Specialty Retail | Home Furnishings Retail | Bull | Australian Securities Exchange | Australia, Capital-light, Consumer Discretionary, Custom Furniture, Equity, Furniture Retail, high-margin, international expansion, store rollout, UK Market Entry, United Kingdom | Login |
| Jul 15, 2026 | Fund Letters | Auscap Asset Management | LOV.AX | Lovisa Holdings | Specialty Retail | Specialty Stores | Bull | Australian Securities Exchange | Ear Piercing, Equity, Europe, Fast-fashion, global expansion, high-margin, insider buying, Jewelry Retail, Market Share Gain, Multi-brand Strategy, North America, Specialty retail, United Kingdom | Login |
| Oct 1, 2024 | Fund Letters | Auscap Asset Management | JHX.AX | James Hardie Industries | Materials | Building Products | Bull | ASX | Building materials, fiber cement, High returns, Housing Construction, market share, Structural Growth, US market | Login |
| Oct 1, 2024 | Fund Letters | Auscap Asset Management | NCK.AX | Nick Scali | Consumer Discretionary | Home Furnishing Retail | Bull | ASX | acquisition, Consumer Discretionary, Furniture Retail, Made-to-Order, market share, Store Productivity, UK Expansion | Login |
| Oct 1, 2024 | Fund Letters | Auscap Asset Management | PWH.AX | PWR Holdings | Industrials | Industrial Machinery | Bull | ASX | Aerospace, Cooling Systems, Defense, Electric Vehicles, Manufacturing Expansion, Technical Expertise, thermal management | Login |
| Oct 1, 2024 | Fund Letters | Auscap Asset Management | QUB.AX | Qube Holdings | Industrials | Marine | Bull | ASX | Asset Utilization, container terminals, Defensive Infrastructure, Import Export, Logistics Infrastructure, Return on capital, valuation | Login |
| Jul 1, 2024 | Fund Letters | Auscap Asset Management | RMD | ResMed Inc. | Health Care Equipment & Services | Health Care Equipment | Bull | NYSE | CPAP, founder-led, Healthcare Technology, market leader, Medical devices, sleep apnea, Underdiagnosed Market, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| NCK.AX | Auscap has had an investment in Nick Scali for many years. It is a high-quality furniture retailer with 110 stores in the Australian market and 19 stores in the UK. It is a high returning, capital light operation that has delivered strong earnings growth over the 20 plus years it has been listed on the ASX. Its value proposition is providing customers with quality, custom made furniture at affordable, great value prices. An internal obsession with cost discipline results in strong store and company economics. In 2024 Nick Scali made its first foray beyond Australia and New Zealand, buying a network of UK stores that were not making money and trading as Fabb Furniture. Since then, the company has rebranded and refurbished the majority of the stores, introduced the Nick Scali range to the British consumer and commenced some limited advertising. The key question is whether the product will resonate with British consumers. Nick Scali has a unique offering in the market, with its range of lounges, dining tables, case goods and beds clearly differentiated from peers, many of whom sell very similar product to one another. If the product resonates, we believe there is the potential for Nick Scali to have a network of at least 60 stores in the UK. Such a business could be very profitable given the UK's greater density of population, which is notable in that it leads to very high sales per store for key competitors compared with many retailers operating out of similar sized stores in Australia. Similar sales levels for Nick Scali would result in strong profitability given the company's high gross margins and cost discipline. Early evidence from the most recent half year result was that the Nick Scali range was starting to resonate with British consumers. Like for like sales growth ran at 32% in January for stores that had been branded as Nick Scali for more than 12 months. While the proof will be in the company's results in years to come, we were impressed with the UK stores we visited. Sales staff spoke of increasingly receiving referral customers and conversion appears to be improving in a tough macroeconomic environment. The quality of the product appears to be appealing to customers and the business has an experienced operator in charge in the UK. Management are investigating potential new stores, as discussed at the half year result. These are all positive indications that management are confident the product is resonating in the UK, and the opportunity for the business to become a meaningful contributor to company results is real. We remain enthused about our long-term investment in Nick Scali and continue to see opportunities for the company to grow revenues and earnings in Australia and the UK as the store networks grow, with further opportunities beyond these two markets. |
| LOV.AX | Lovisa is a global, fast fashion, jewellery retailer that offers affordable, trend-based jewellery. It operates in over 45 countries and has more than 1,100 stores, delivering 150 new styles weekly. Lovisa is a strongly profitable business, generating $86m in earnings on revenue of just under $800m in FY25. In mid-2025 Lovisa announced that it was launching a second brand, Jewells. Jewells currently has only 7 stores, all of which are located in the UK. The market has been concerned about the positioning of the second brand and how it will be differentiated from the Lovisa brand. The Jewells concept has undergone a few iterations and seems to have landed as a reasonably close cousin of the Lovisa concept. We suspect this will give comfort to investors, who have previously been concerned about the positioning of a second brand. Within the shopping centres visited, Jewells was notable as being the only comparable competitor to Lovisa given the closure of its most significant competitor, Claire's. The ranging appeared remarkably similar to Lovisa's typical offering, at a slightly higher price point but still very much at the low priced, fast-fashion end of the market. The most notable difference was the firm focus on piercing within the stores to drive sales and traffic. Piercing chairs were often placed in visible locations, undoubtedly to capture traffic that would have traditionally gone to Claire's and other competitors in the space. While the piercing was notionally free, the cost appeared embedded in the piercing jewellery that had to be purchased with any piercing performed. While the traditional Lovisa brand also offers piercing, it was a much more significant focus for the Jewells brand. Despite the remarkably low price point, the jewellery is extremely high margin. In the first half of FY26, Lovisa recorded gross margins of 82.9%, leading to very profitable store metrics. With a key global competitor, Claire's, falling into bankruptcy in 2025, closing 290 stores in the United States and nearly 300 in the UK across 2025 and the first half of 2026, Lovisa should be in a position to increase its market share in these and many other underrepresented international geographies. While there is the regular emergence of new competitors in the space, such as Harli + Harpa and SkinKandy in recent years, the runway for continued earnings growth at a group level appears sound given the under penetration of the brand in North America and Europe. The recent insider buying of over $12m worth of shares on market by founder and major shareholder Brett Blundy we believe demonstrates confidence in the future of the business and the value on offer at current prices. We continue to hold Lovisa in both funds. |
| REH.AX | Over the month, Reece, Life360, Nick Scali, Magellan Financial Group, Steadfast Group, Charter Hall Group, Macquarie Group and CAR Group were the largest contributors to returns. |
| 360.AX | Over the month, Reece, Life360, Nick Scali, Magellan Financial Group, Steadfast Group, Charter Hall Group, Macquarie Group and CAR Group were the largest contributors to returns. |
| MFG.AX | Over the month, Reece, Life360, Nick Scali, Magellan Financial Group, Steadfast Group, Charter Hall Group, Macquarie Group and CAR Group were the largest contributors to returns. |
| SDF.AX | Over the month, Reece, Life360, Nick Scali, Magellan Financial Group, Steadfast Group, Charter Hall Group, Macquarie Group and CAR Group were the largest contributors to returns. |
| CHC.AX | Over the month, Reece, Life360, Nick Scali, Magellan Financial Group, Steadfast Group, Charter Hall Group, Macquarie Group and CAR Group were the largest contributors to returns. |
| MQG.AX | Over the month, Reece, Life360, Nick Scali, Magellan Financial Group, Steadfast Group, Charter Hall Group, Macquarie Group and CAR Group were the largest contributors to returns. |
| CAR.AX | Over the month, Reece, Life360, Nick Scali, Magellan Financial Group, Steadfast Group, Charter Hall Group, Macquarie Group and CAR Group were the largest contributors to returns. |
| WTC.AX | Wisetech Global was the largest detractor from performance. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
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| No industry data available | |||
