MHJ, MWE, MFB: 3 diversified NZX stocks in focus amid high inflation

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MHJ, MWE, MFB: 3 diversified NZX stocks in focus amid high inflation

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  • New Zealand’s annual inflation rose at the fastest pace in three decades last quarter
  • Michael Hill International reveals a strong FY22Q3 trading update
  • My Food Bag Group is to pay a dividend next month

New Zealand is currently battling rising inflationary pressures as its annual inflation reaches a 30-year high. The March 2022 quarter witnessed the consumer price index touching 6.9% as compared to 5.9%, which was recorded in the December 2021 quarter.

The main driver for rising annual inflation can be attributed to the housing and household utilities group, which saw sharp price rises across construction and housing rentals. Further, supply-chain issues and higher labour costs have aggravated the said issue.

Another major contributor to rising inflationary pressures is the transport sector, influenced by higher prices for both petrol as well as second-hand cars.

Moreover, as per Westpac NZ’s recent survey of 1,600 customers, 83% of them were worried about rising prices, impacting the cost of living. However, many of them stated that they were already taking proactive measures to manage rising costs like cutting back on household bills, shopping at cheaper retailers, etc.

With this backdrop, let us now look at the three NZX-listed stocks making the headlines, defying these inflationary pressures and remaining resilient.

NZX stocks- MHJ, MWE, MFB

Source: © Ogichobanov |

Michael Hill International Limited (NZX:MHJ; ASX:MHJ)

Michael Hill International Limited, the well-known jewellery retailer, has a market cap of NZ$427 million. Recently, the Company announced the sale of its Canadian credit receivables to Flexiti Financial Inc. for about AU$12 million.

Despite rising inflationary trends, staff shortages and lower foot traffic, MHJ demonstrated resilience and reported a strong Q3 performance. Its store sales saw a climb of 11.1%, while same store sales rose 4.8% as compared to previous year. Moreover, the Company’s online sales surged during the said quarter.

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MHJ boasts disciplined working capital management and a healthy cash position towards the quarter-end.

On 27 May, at the time of writing, MHJ was trading flat at NZ$1.120.

Marlborough Wine Estates Group Limited (NZX:MWE)

Marlborough Wine Estates Group Limited, which operates vineyards in the Awatere valley, is famous for producing high-quality wines. Its market capital stands at NZ$58 million.

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The Company successfully navigated through challenges related to the COVID-19 pandemic and revealed the completion of its 2022 harvest, recording a 12% increase in harvested volumes. This is greatly contributing towards improving the Group’s overall FY22 profitability as well as growth in FY23.

As a result, MWE is anticipating an NPAT between NZ$0.3 million to NZ$0.4 million for the year ended 30 June 2022 and looks forward to further growth in coming years.

On 27 May, at the time of writing, MWE was down 3.02% at NZ$0.193.

My Food Bag Group Limited (NZX:MFB)

Functioning as an online meal-kit provider, My Food Bag Group Limited, has a market cap of more than NZ$215 million.

Underpinned by its operational efficiency and innovative products pipeline, MFB posted a strong FY22 performance and delivered a record revenue of NZ$194 million for the said period. Also, its NPAT clocked NZ$20.0 million and the conversion of active customers into high-value customers grew 7% YoY.

Also Read: MFB, CVT, PGW- A glance at 3 food stocks as NZ food inflation remains high

It will pay a final dividend of 4.0 cps on 16 June and is focused on expanding its product offerings.

Despite facing macro-environment challenges like inflation, labour availability and supply chain disruptions, the Group navigated successfully and is looking ahead for greater growth in coming years.

On 27 May, at the time of writing, MFB was climbing 2.25% to NZ$0.910.

Bottom Line

Several NZ businesses, due to their prudent capital management and disciplined cost control, have navigated successfully amid inflationary pressures.


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