Guess which ASX All Ords stock just rocketed 24% on takeover interest

The All Ordinaries Index (ASX: XAO) is up 0.7% today, with this ASX All Ords stock doing a lot of the heavy lifting.

Up 24% in earlier trade today, the women’s clothing retail stock is currently trading for 53 cents a share, up 21.8%. That sees the ASX All Ords stock up an eye-popping 112% since the recent lows on 2 November.

Any guesses?

If you said City Chic Collective Ltd (ASX: CCX), go to the head of the virtual class.

Here’s what’s driving investor interest.

ASX All Ords stock lifts off on takeover potential

The City Chic share price looks to be taking off today after the company released its half year trading update for the six months to 31 December (H1 FY 2024) and responded to media speculations about potential interest in its North American business.

Starting with the potential acquisition of its North American business, the ASX All Ords stock said that it is “regularly involved in exploratory discussions with different parties regarding initiatives that could create value for its shareholders”.

The company highlighted that “there is no certainty that any of these opportunities, including any potential sale of City Chic’s North American business, proceed to a binding transaction”.

Luminis Partners has been a long-standing adviser to City Chic on various projects.

Turning to the half-year update…

City Chic share price lifts amid improving margins

The ASX All Ords stock reported global sales revenue of $106 million for H1 FY 2024. That’s down 29% from the prior corresponding period.

Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) for the six months came in at a loss of $7 million to $10 million.

However, the company reported a 10% improvement in margin in Q2 FY 2024 compared to Q1. Second-quarter revenue was also up from the first quarter, while costs were down following the company’s strategic action plans.

The inventory overhang was also reduced. City Chic reported inventories were down 27% since 2 July, with some $40 million of inventory cleared.

Commenting on the results that look to be giving the ASX All Ords stock a healthy boost today, City Chic CEO Phil Ryan said:

In the first quarter our focus was on clearing our inventory position and delivering new, relevant product to support our key trading period and we did that successfully.

This is reflected in stronger sell through at improved margins in the second quarter, especially in our stores business, and we remain on track to return to profitable trading overall in the second half.

As at 31 December, the ASX All Ords stock had a net cash position of $3.5 million.

The post Guess which ASX All Ords stock just rocketed 24% on takeover interest appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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