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Adairs Limited
Consumer Cyclical · Specialty Retail
Updated just now
$1.29
MARKET CAP
$228.76M
P/E RATIO
9.0
DIV. YIELD
7.1%
FRANKING
100%
Adairs Limited operates as a specialty retailer of home furnishings, furniture, and decoration products in Australia and New Zealand. The company operates through three segments: Adairs, Focus on Furniture, and Mocka.
View full descriptionThe Warsi Rating combines two proven approaches: value investing principles and dividend strategy. A stock must score 70+ on both to be rated Solid or higher.
$10.01
Discounted cash flow estimate
$2.14
For 6% dividend yield
Business quality and balance-sheet durability.
Profit generated per $1 of shareholder investment
23.6% ROE meets the threshold. Some years dipped but overall pattern is acceptable.
Current Snapshot
10Y Avg
23.6%
Threshold
15.0%
Worst Year
11.4%
Why It Matters
ROE shows how effectively management turns shareholder capital into profit. High and stable ROE can signal pricing power, cost discipline, or both.
Formula
Net Income / Shareholders' Equity x 100Method
Use the 10-year average ROE and review the weakest year to check whether returns stayed resilient across cycles.
Worked Example
This company's 10-year average ROE is 23.6%, meaning each $1 of shareholder equity generates $0.24 in annual profit. The threshold is 15%, and the worst single year was 11.4%.
How to Interpret
Higher and steadier ROE generally supports stronger long-term compounding. Large drawdowns in weak years can point to fragility.
At 23.6% ROE, every $1 retained generates $0.24 in annual profit. This is solid compounding power that can support dividend growth over time.
Sources
How much the company owes vs. what it owns
Profit after production costs, before overhead
Real cash left after running the business
Positive cash generation. Company produces real cash after capital expenditures - can fund dividends, buybacks, or growth.
Current Snapshot
Current FCF
$65M
Pass Rule
> $0
Status
Positive
Why It Matters
Free cash flow is the cash available after core operating and capital needs. It is central to dividend capacity.
Formula
Operating Cash Flow - Capital ExpendituresMethod
Review whether free cash flow is consistently positive and whether it is sufficient relative to dividends and debt needs.
Worked Example
This company generated $65M in free cash flow — cash left after operating costs and capital expenditure. Positive FCF means dividends are funded by real cash generation.
How to Interpret
Persistently negative free cash flow can force reliance on borrowing or equity issuance to maintain payouts.
Positive cash flow means dividends are funded by actual money, not accounting profits. As Buffett says, "Cash is fact, profit is opinion." Your income is backed by real cash generation.
Sources
Short-term assets vs. short-term debts
Price versus estimated intrinsic value and required return thresholds.
What percentage of the stock price comes back as earnings each year
How efficiently the company turns money into profit
Is the business growing — and is debt being managed responsibly?
Debt declining with stable revenue — management is strengthening the balance sheet, which protects future dividends.
Current Snapshot
Revenue Change
+9.5%
Debt Change
-26.9%
Trend State
Mixed
Why It Matters
Revenue trend shows whether the business is expanding or contracting. Debt trend adds context on whether growth is being funded conservatively.
Formula
Revenue Change (%) = (Latest Revenue - Earliest Revenue) / |Earliest Revenue| x 100; Debt Change (%) = (Latest Debt - Earliest Debt) / |Earliest Debt| x 100Method
Map annual revenue history and, where relevant, annual debt history. For financial companies, debt is excluded because deposits and reserves distort this signal.
Worked Example
Revenue changed by +9.5% across the displayed period, while debt changed by -26.9%.
How to Interpret
Rising revenue with stable or falling debt is typically stronger than rising revenue funded by rapidly rising leverage.
Debt declining with stable revenue — management is strengthening the balance sheet, which protects future dividends.
Sources
Annual dividends as percentage of stock price
9.95% yield meets Barsi's 6% minimum. Based on 6-year average, not one-time spikes.
Current Snapshot
6Y Avg Yield
9.9%
6% Requirement
6.0%
Gross Yield
14.2%
Why It Matters
Yield translates dividend income into a percentage of the price paid, which is central to income-first screening.
Formula
Annual Dividends per Share / Stock Price x 100Method
Use the 6-year average annual dividend for consistency and compare the result with the 6% framework requirement.
Worked Example
With a 6-year average annual dividend of $0.13 and a share price of $1.29, the Barsi yield is 9.9%. The minimum requirement is 6%. Including franking credits, the gross yield is 14.2%.
How to Interpret
Higher sustainable yield improves upfront income, but unusually high yields may reflect elevated risk or weak coverage.
This yield provides meaningful income that can beat inflation and compound over time. With DRIP enabled, this income can snowball into significant wealth.
Sources
Track record of consistent dividend payments
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| 10 Mar 2026Interim | 7 Apr 2026 | $0.08 | 100% | $0.06 | $0.02 |
| ~16 Oct 2026Est | ~8 Oct 2026 | ~$0.07 | 0% | ~$0.07 | $0.00 |
Highest price to lock in 6% yield
Industry category of the business
Consumer Cyclical is not a BESST sector. Non-BESST stocks receive a lower base score but can still qualify with exceptional dividend metrics.
Current Snapshot
Industry
Specialty Retail
BESST Match
No
Score Impact
No bonus
Why It Matters
Sector classification helps contextualise risk and demand durability, which can materially affect dividend stability.
Formula
BESST Match = Sector in {Banks, Energy, Sanitation, Insurance, Telecom}Method
Match company sector or industry against BESST categories. A match adds scoring support but does not replace core dividend checks.
Worked Example
This company operates in Specialty Retail (Consumer Cyclical sector). It does not match a BESST sector, so it receives the standard base score. Non-BESST stocks can still qualify with strong dividend metrics.
How to Interpret
Sources
How much of a company's earnings are paid out as dividends
A 100% payout means the company distributes most of its earnings as dividends — more income per share now, but less room for growth. Around 67% is often considered “normal” for established companies. This level feeds directly into the price ceiling calculation.
Current Snapshot
Latest Ratio
100.0%
Healthy Range
30%-75%
Zone
Elevated
Why It Matters
Payout ratio links dividends to earnings capacity and helps evaluate whether current distributions are likely to remain supportable.
Formula
Payout Ratio (%) = (Annual Dividend per Share / Earnings per Share) x 100Method
Calculate year-by-year payout ratios where EPS is positive, classify each year by sustainability zone, and compare with the current TTM ratio.
Worked Example
$0.11 dividend / $0.14 EPS equals 72.9% payout ratio.
How to Interpret
Ratios in the middle range are usually more sustainable than very high ratios. Values above 100% indicate dividends exceeded earnings in that period.
A 100% payout means the company distributes most of its earnings as dividends — more income per share now, but less room for growth. Around 67% is often considered “normal” for established companies. This level feeds directly into the price ceiling calculation.
Sources
Adairs Limited operates as a specialty retailer of home furnishings, furniture, and decoration products in Australia and New Zealand. The company operates through three segments: Adairs, Focus on Furniture, and Mocka. It offers bedroom products, such as bedlinen, bedding, and bedroom furniture and accessories; bathroom and laundry products, including towels, bath mats and runners, bathrobes and slippers, bathroom accessories, and laundry and home care products; furniture products, such as bedroom, office, living room, and kids furniture; and floor rugs and mats. The company also home and outdoor products comprising of home styling, home care and gifting, pets, outdoor, storage, and kitchen products; kid's products, including kids bedlinen, bedding, décor, bathroom, furniture, and nursery, as well as gifting products.
It sells its products under Adairs, Focus on Furniture, and Mocka brands and through online stores. The company was formerly known as Home & Decor Holdings Pty Ltd and changed its name to Adairs Limited in May 2015. Adairs Limited was founded in 1918 and is headquartered in Chadstone, Australia.
Who owns the company's shares and how much leadership has at stake
Management's wealth moves with yours
A handful of professional investors are watching
Shares freely traded on the ASX by individual investors like you
Insiders hold 5.3% and institutions hold 26.5%. Look for higher insider ownership as a sign that leadership believes in the long-term value of the business.
Current Snapshot
Insider %
5.3%
Institutional %
26.5%
Float %
68.3%
Why It Matters
Ownership mix affects governance incentives, liquidity, and share-price behaviour under large portfolio rebalancing flows.
Formula
Public Float (%) = 100 - Insider Ownership (%) - Institutional Ownership (%)Method
Use reported ownership percentages, convert to percentage terms, and compute remaining public float as the residual.
Worked Example
If insiders own 5.3% and institutions own 26.5%, public float is 68.3%.
How to Interpret
Higher insider ownership can improve alignment of incentives, while dominant institutional concentration can amplify short-term price moves.
Insiders hold 5.3% and institutions hold 26.5%. Look for higher insider ownership as a sign that leadership believes in the long-term value of the business.
Sources
| Date | Insider | Type | Shares | Value |
|---|---|---|---|---|
| 16 Dec 2025 | Roseby (Narelle Alison) Chief Executive Officer | Purchase at price 1.27 per share. | 11K | $13K |
| 18 Nov 2025 | Roseby (Narelle Alison) Chief Executive Officer | Purchase at price 1.24 per share. | 3K | $3K |
| 14 Nov 2025 | Roseby (Narelle Alison) Chief Executive Officer | Purchase at price 1.14 per share. | 3K | $3K |
| 24 Oct 2025 | Kelly (Rachel) Director (Non-Executive) | Purchase at price 1.42 per share. | 33K | $46K |
| 24 Oct 2025 | Kelly (Rachel) Director (Non-Executive) | Purchase at price 1.42 per share. | 1K | $2K |
Company insiders have been net buyers of shares over the past 12 months. This may indicate management confidence in future prospects.
Value analysis may be affected by missing data.
Market data sourced from third-party financial data providers. Analysis generated using Warsi Criteria — proprietary scoring algorithms for value investing and dividend income analysis. Not financial advice. Learn how we analyse stocks →
Acceptable. Debt level (1.39) is within this Buffett-inspired framework's limit of 1.5.
Current Snapshot
Current D/E
1.39x
Industry Limit
1.50x
Headroom
+0.11x
Why It Matters
Debt-to-equity shows balance-sheet risk. Lower leverage usually means more flexibility when earnings soften.
Formula
Total Debt / Shareholders' EquityMethod
Compare current D/E against the industry threshold used in the scoring framework, then assess remaining headroom.
Worked Example
This company's D/E is 1.39, meaning it carries 139 cents of debt for every $1 of equity. The consumer cyclical & retail limit is 1.50, leaving 0.11 of headroom.
How to Interpret
Lower values generally imply lower refinancing pressure and lower dividend stress in downturns.
Low debt means this company isn't at risk of cutting dividends to service loans during downturns. Your income stream is protected by a strong balance sheet.
Sources
Healthy 48.9% average margin suggests sustainable competitive advantage.
Current Snapshot
10Y Avg
48.9%
Threshold
40%
Worst Year
46.0%
Why It Matters
Gross margin indicates how much room a business has to absorb costs and still generate profit.
Formula
(Revenue - Cost of Goods Sold) / Revenue x 100Method
Assess both the long-term average and the weakest year. The framework checks for both level and consistency.
Worked Example
This company's 4-year average gross margin is 48.9% — it keeps 49 cents of every revenue dollar after production costs. The threshold is 40%, and the weakest year was 46.0%.
How to Interpret
Sustained high margins usually support durability. Sharp margin swings can signal weaker control or cyclical pressure.
Strong margins mean the company has pricing power. They can maintain profitability even if costs rise - protecting the dividend during inflationary periods.
Sources
Current ratio of 0.83 is below 1.0 - company may struggle to pay short-term obligations.
Current Snapshot
Current Ratio
0.83x
Warning Floor
1.00x
Target
1.50x
Why It Matters
Liquidity supports operational stability. Companies with weak liquidity can face pressure even when long-term fundamentals are sound.
Formula
Current Assets / Current LiabilitiesMethod
Compare the current ratio to the warning floor and target level used in the framework.
Worked Example
This company's current ratio is 0.83x — it has $0.83 in short-term assets for every $1 of short-term liabilities. The target is 1.5x, with a warning floor at 1.0x.
How to Interpret
Ratios above the target suggest healthier short-term resilience; ratios below 1.0x can indicate immediate funding risk.
Tight liquidity means the company may need to borrow or sell assets to pay bills. Dividends are often the first expense cut when cash runs low.
Sources
Strong value. 11.2% earnings yield exceeds the threshold, and multiple valuation checks confirm it's attractively priced.
Current Snapshot
Current Yield
11.2%
Required Yield
7.5%
Spread
+3.7pp
Why It Matters
Earnings yield reframes valuation as return on price paid. It helps compare equity earnings power against lower-risk alternatives.
Formula
(Earnings per Share / Stock Price) x 100Method
Calculate current earnings yield, then compare it to the required yield for the stock's industry setting.
Worked Example
With EPS of $0.14 and a share price of $1.29, earnings yield is 11.2%. The required yield for this industry is 7.5% (based on 4.5% government bond rate plus a risk premium).
How to Interpret
A yield above the required level suggests better valuation support; below it indicates thinner compensation for equity risk.
Multiple ways of measuring value agree: you're getting a fair deal. The stock offers solid returns compared to what you'd earn from safe bonds.
Sources
How current price compares with estimated intrinsic value
Exceptional discount: 83% BELOW the fair-value threshold (includes 25% margin of safety).
Current Snapshot
Current Margin
87.1%
Industry Threshold
25%
Status
83% Undervalued
Why It Matters
Margin of safety provides a valuation buffer against modelling uncertainty and adverse business outcomes.
Formula
(Estimated Intrinsic Value per Share - Current Price) / Estimated Intrinsic Value per Share x 100Method
Estimate intrinsic value using a two-stage DCF (10-year projection plus terminal value), then compare with current price.
Worked Example
For this stock now: intrinsic value is $10.01 per share, current price is $1.29, and margin of safety is 87.1%.
How to Interpret
Positive margin indicates price below modelled value; negative margin indicates price above modelled value. Compare against the industry's required buffer.
The market price sits far below your required entry threshold, providing a substantial valuation buffer if assumptions prove optimistic.
Sources
13.9% ROIC exceeds the 10.5% threshold, indicating adequate capital efficiency.
Current Snapshot
5Y Avg
13.9%
Threshold
10.5%
WACC Delta
+5.4pp
Why It Matters
ROIC measures capital efficiency. Businesses that repeatedly earn above their funding cost can compound value more effectively.
Formula
After-Tax Operating Profit / Invested Capital x 100Method
Use the 5-year average ROIC and compare it with industry WACC plus the required spread in this framework.
Worked Example
This company's 5-year average ROIC is 13.9%, with a cost of capital (WACC) of 8.5%. The +5.4pp spread above WACC suggests it creates value on each dollar invested.
How to Interpret
A healthy spread above WACC suggests value creation; a narrow or negative spread points to weaker capital efficiency.
Returns exceed capital costs - this company creates value rather than destroying it. The business has the foundation to sustain and grow dividends.
Sources
Years of earnings needed to retire all long-term debt
Manageable debt. Could pay off long-term debt in 2.4 years — comfortably within the 4-year threshold.
Current Snapshot
Payoff Years
2.4yr
Target Years
4yr
Gap
+1.6yr
Why It Matters
Debt payoff years converts leverage into an intuitive time measure, making debt burden easier to compare across stocks.
Formula
Long-Term Debt / Average Net Income (3yr)Method
Use current long-term debt and the 3-year average net income to smooth one-off profit noise.
Worked Example
With $76M in long-term debt and $32M in average annual earnings (3yr), it would take 2.4 years of earnings to pay off all debt. The consumer cyclical & retail threshold is 4 years.
How to Interpret
Lower values generally indicate stronger debt capacity. Very high values can constrain dividend resilience.
Debt is comfortably serviceable from earnings. This means interest payments won't crowd out dividends, even during moderate downturns.
Sources
Consistency of profits over time
10/4 positive EPS years. Limited data - full evaluation requires 8+ years. Monitor closely for consistency.
Current Snapshot
Positive Years
10/4
Allowed Losses
0 (limited)
EPS CAGR
-1.4%
Why It Matters
Consistency in EPS helps distinguish resilient earnings power from one-off performance spikes.
Formula
Positive EPS Years / Available EPS YearsMethod
For 8+ years of data, apply industry-specific loss tolerance. For limited data, every available year must be positive.
Worked Example
This company reported positive earnings in 10 of the last 4 years. With only 4 years of data, every year must be positive. EPS growth rate (CAGR) is -1.4%.
How to Interpret
Fewer loss years and stronger EPS continuity generally improve confidence in future dividend and valuation assumptions.
So far so good, but limited history means we haven't seen how this company handles a full economic cycle. Monitor closely for continued consistency.
Sources
How much earnings are consumed by capital expenditure
CapEx consumes 45% of cumulative earnings — within the 50% threshold but approaching the limit.
Current Snapshot
10Y CapEx Intensity
45%
Threshold
50%
Buffer
+5%
Why It Matters
CapEx intensity estimates how much of earnings must be reinvested just to sustain operations.
Formula
Cumulative CapEx (10yr) / Cumulative Net Income (10yr) x 100Method
Aggregate 10-year CapEx and net income, then compare the ratio with the sector threshold in the framework.
Worked Example
Over 10 years, 45% of this company's cumulative earnings were consumed by capital expenditure. The consumer cyclical & retail threshold is 50%, leaving a buffer of +5%.
How to Interpret
Lower ratios usually indicate better cash conversion. Higher ratios can reduce room for dividends and buybacks.
Capital needs are within acceptable bounds but on the higher end. If CapEx requirements increase, there may be less room for dividends and growth.
Sources
Percentage of revenue that becomes profit after all expenses
4.2% net margin is below the 5% threshold. May reflect this sector's structural characteristics.
Current Snapshot
Current Margin
4.2%
Threshold
5.0%
Relative Position
-0.8%
Why It Matters
Net income margin shows how much profit the business keeps from each dollar of revenue after all costs.
Formula
Net Income / Total Revenue x 100Method
Compare current margin with the industry-specific threshold to avoid cross-sector distortions.
Worked Example
This company's net income margin is 4.2% — it keeps 4 cents of every revenue dollar as profit after all expenses. The consumer cyclical & retail threshold is 5%, putting it 0.8% below the requirement.
How to Interpret
Margins that are both strong and stable can indicate competitive strength; persistent weakness may limit reinvestment and payout capacity.
Lower margins in this sector are common, but they leave less cushion if costs rise or revenue drops. Monitor whether margins are stable over time — consistency matters more than the absolute level.
Sources
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| 10 Sept 2025Final | 8 Oct 2025 | $0.04 | 0% | $0.04 | $0.00 |
| 10 Mar 2025Interim | 7 Apr 2025 | $0.07 | 0% | $0.07 | $0.00 |
| 11 Sept 2024Final | 9 Oct 2024 | $0.07 | 0% | $0.07 | $0.00 |
| 11 Mar 2024Interim | 8 Apr 2024 | $0.05 | 0% | $0.05 | $0.00 |
| 20 Mar 2023Interim | 17 Apr 2023 | $0.08 | 0% | $0.08 | $0.00 |
| 5 Sept 2022Final | 3 Oct 2022 | $0.10 | 0% | $0.10 | $0.00 |
| 21 Mar 2022Interim | 18 Apr 2022 | $0.08 | 0% | $0.08 | $0.00 |
| 8 Sept 2021Final | 6 Oct 2021 | $0.10 | 0% | $0.10 | $0.00 |
| 9 Mar 2021Interim | 6 Apr 2021 | $0.13 | 0% | $0.13 | $0.00 |
| 9 Sept 2020Final | 7 Oct 2020 | $0.11 | 0% | $0.11 | $0.00 |
Excellent track record. 11 years of consistent dividends through multiple market cycles.
Current Snapshot
History
11yr
Predictability
Variable
Payout Health
Sustainable
Why It Matters
Payment consistency is a direct test of dividend reliability. Large cuts or skips often appear before confidence recovers.
Formula
Consecutive Years = count of years with dividend payments and no disqualifying skip/cut eventsMethod
Require at least 6 years of history, then check for skipped years and large cuts, allowing approved systemic-event exceptions.
Worked Example
This company has 11 years of dividend history (2016–2026). No suspensions detected — 11 consecutive years of payments. Predictability: Variable. Payout health: Sustainable. The minimum requirement is 6 years.
How to Interpret
Longer uninterrupted records generally signal stronger income reliability than high yield alone.
A 11-year track record through multiple economic cycles gives confidence your income will continue. This company has proven it prioritises shareholder returns.
Sources
Priced well below ceiling. 40% below means you're locking in well over 6% yield.
Current Snapshot
Current Price
$1.29
Max Buy Price
$2.14
Delta
+39.7%
Why It Matters
The price ceiling links valuation discipline to income targets by defining the price that aligns with a 6% yield target.
Formula
6-Year Average Annual Dividend / 0.06Method
Use the 6-year average dividend (not one year) and divide by 0.06 to estimate the maximum entry price for target yield.
Worked Example
With a current price of $1.29 and a ceiling of $2.14, the entry is 39.7% below the ceiling.
How to Interpret
Prices below the ceiling imply a historical yield above 6%; prices above it imply a lower historical yield at entry.
Buying this far below the ceiling locks in a yield well above 6% based on proven historical dividends. Your income starts strong from day one.
Sources
BESST alignment is a positive context signal. Non-BESST stocks can still qualify with strong yield and dividend consistency.
Non-essential businesses face demand drops during recessions — discretionary spending is first to be cut. This increases cyclical risk for dividends, but companies with decades of consistent payments can still demonstrate durability.
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