BGP, MFT, ALD: 3 stocks to eye as Budget 2022 targets cost of living

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BGP, MFT, ALD: 3 stocks to eye as Budget 2022 targets cost of living

 BGP, MFT, ALD: 3 stocks to eye as Budget 2022 targets cost of living
Image source: Joyseulay, Shutterstock.com

Highlights

  • The NZ govt provided many short-term measures to tackle the cost of living in the country.
  • It offered a cut in road user charges and fuel tax, planned to pass a law for reducing competition in supermarkets and remove house price caps for first home buyers.
  • Briscoe, Mainfreight and Ampol are 3 diversified stocks that can be looked post budget announcement.

Finance Minister Grant Robertson announced the new cost of living payments for people earning up to $70,000. Some of the short-term benefits announced on this front included a cut in road user charges and fuel tax, half-price public transport and weekly $27 cash payments.

The government has also planned to pass a new law to reduce grocery prices by introducing more competition and has removed house price caps for first home loans.

The NZ government has been under increased pressure to provide relief measures as the cost of living is going through the roof for NZ families.

Mortgage rates are on a rise, rents are up, food prices are up and fuel prices are sky-rocketing, but wages are not keeping up with soaring costs. These factors have burdened Kiwis with high living costs.

On this note, let’s see how these 3 stocks are faring post budget announcement.

Source: © Sumandaq | Megapixl.com

Briscoe Group Limited (NZX:BGPASX:BGP)

NZ-based homeware and sporting goods retailer Briscoe Group has a market cap of $1.2 billion. BGP’s shares ended the trading session 0.17% lower at $5.74 on Thursday.

ALSO READ: What are key function areas for Budget 2022?

Briscoe posted strong results in H1 and H2 of the previous year despite the COVID-19 impact. The Group registered a 6% growth in sales in Q4 and stated that its results were 17% higher in the 3 months to the end of April 2022 than the same period in 2019. This showed the adaptability and resilience of the total trading platform – across its online, store network, and supply chain functions.

BGP is working on the future proofing of the supply chain network and taking steps about sustainability.

BGP paid an interim dividend of 11.5cps in October 2021 and a final dividend of 15.5cps in March end. It expects growing sales and group gross profit margin dollars to be higher than in 2019 for the quarter.

Mainfreight Limited (NZX:MFT) 

Logistics and freight services provider Mainfreight has a market cap of $7.46 billion. MFT shares ended the trading session flat at $74.1 on Thursday.

ALSO READ: Does Budget 2022 addresses cost-of-living crisis in NZ?

Mainfreight registered an improved financial performance across Asia, Europe and Americas’ businesses for 43 weeks of trading until 31 January 2022. The Group’s international shipping and airfreight remain affected and freight rates remain high.

MFT expects increased freight volumes for the year ahead. Mainfreight is due to hold its ASM on 28 July 2022.

Ampol Limited (ALD:ASX, NZX:ALD)

 A major oil and gas retailer in Australia, AMP, has a market cap of $9.1 billion and got listed on the NZX on 17 May. ALD shares ended the trading session 3.28% higher at $38.45 on Thursday.

ALD has a strong credit rating of Baa1 from Moody’s and is committed to investing 4,125 million in NZ from FY23 to FY28. It will also support NZ’s energy transition and provide fuel security by creating a trans-Tasman fuel champion with a network of 2,350 sites, supplying nearly 25 BL pa of fuel.

ALD looks at material transition and synergies prospects of nearly $60-80 million pa largely via fuel procurement and overhead cost reductions.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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