Do you Know about these Seven enticing NZX-listed Growth Stocks?

Summary

  • Growth stocks are stocks that provide a much higher growth rate than the market average and have a high potential for development.
  • Investing in growth stocks can help investors accumulate wealth through capital gains.
  • These companies generate profit by securing significant market advantage by pursuing bold business strategies.

A growth stock is a stock of a company that gives a significantly high growth rate and a positive cash flow at a faster rate than another company in the same sector. These stocks belong to the companies with high-growth potential.

Investing in growth stocks can certainly turn out to be a wise step in the year of hope and recovery, 2021. Investors invest in growth stocks, expecting that they would make money through capital gains when they sell their shares in the future.

However, they are regarded as risky as they make profit by securing significant market advantage by engaging in bold business plans.

Source: © Bialasiewicz | Megapixl.com

Let’s have a look at these 7 NZX-listed growth stocks’ performances till date.

Michael Hill International Limited

Michael Hill International Limited (NZX:MHJ, ASX:MHJ) started 2020 on a strong note but its financials were severely affected by the coronavirus pandemic and drought.

The Company experienced a surge in sales from its digital business, resulting in record digital sales of $24.7 million in FY20, up by 2.3% on FY19.

Some of the highlights of MHJ’s financials for H1FY21 included the following:

  • Margin growth of 150 to 250 bps in all markets and channels for H1FY21 against previous years.
  • Online sales rose 102% for the period with digital schemes continuing to deliver improved sales and margin across all markets.
  • Same store sales increased 6.3% for H1FY21 and no stores were permanently closed or opened in the quarter.

The Company expects Group EBIT of $56 million to $60 million in H1FY21.

On 17 February, MHJ ended the trading session at $0.72, up 1.41% from its previous close.

Argosy Property Limited

Argosy Property Limited (NZX:ARG) made a strong beginning to FY21 despite challenging economic conditions.

Some of the highlights of ARG’s financials for 6 months to 30 September included the following:

  • Net distributable income increased by 21.5% to $36 million compared to $29.7 million in pcp.
  • ARG maintained robust portfolio metrics with high occupancy of 99.4% and WALT (5.7 years)
  • Solid portfolio leasing and rent review results, including 3.8% annualised rent growth on rents reviewed.

The Group delivered strongly on key strategy focus areas, including minimising COVID-19’s impact, continued focus on sustainability, green developments and implementing capital management plans. In November 2020, ARG also declared a dividend guidance of 6.45 cents per share for FY21, reflecting continued strength of the business.

ARG’s capital and portfolio position remains healthy as it steps into H2 FY21.

On 15 February, the Group also confirmed that the sale of the Albany Lifestye Centre (ALC) is now unconditional. The sale price of $87.5 million is at book value and the settlement is expected to take place around 30 April 2021.

On 17 February, ARG ended the trading session at $1.535, up 0.33% from its previous close.

Heartland Group Holdings Limited

Heartland Group Holdings Limited (NZX:HGH, ASX:HGH) achieved a net profit after tax (NPAT) of $72 million for FY ended 30 June 2020.

Heartland increased its finance receivables by 4.9% to $4.6 billion during the year as a result of strong performance across Reverse Mortgages, Open for Business, Motor, Harmoney, and Business Intermediated.

It achieved many key milestones, including the launch of digital platform for residential mortgages, launch of new products to aid customers affected by COVID-19, and also established first long-term funding structure to sustain its Australian business growth.

The Group announced Q2 cash dividend of 1.6375 cents per share for FY21 and was paid on 23 December 2021. Heartland anticipates its NPAT to be between $83 million to $85 million for the year ending 30 June 2021.

On 17 February, HGH ended the trading session at $1.91, down 0.52% from its previous close.

Fletcher Building Limited

Fletcher Building Limited (NZX:FBU, ASX:FBU) came out strongly from COVID-19’s impact and successfully navigated the market uncertainty in FY21.

The Group reported revenue of $7,309 million, EBIT before significant items of $160 million, and made a net loss of $196 million in FY20. However, cash flows were up by a solid $410 million. FBU ended 2020 with a strong balance sheet and looks forward to build on this progress.

Source: FBU Presentation, dated: 25 November 2020

The Group suspended dividends in FY20 but plans to resume dividend payments in FY21. FBU expects FY21 half-year EBIT to be in the range of $305 million to $320 million.

On 17 February, FBU ended the trading session at $6.5, up 0.78% from its previous close.

Freightways Limited

Freightways Limited (NZX:FRE) reported strong activity in Q1 of FY21 after initially posting a sharp drop of revenue in April 2020.

Some of the highlights of FRE’s financials for Q1 FY21 included the following:

  • Revenue rose by 35% to $211.7 million and NPAT increased by 43% to $19.2 million in the period compared to pcp due to the recovery in Express volume packages.
  • Volumes within the Express Package continue to trade well ahead in the quarter, showing a rise in the number of firms providing an online offering, as well as market share gains across the division.
  • The Information Business in NZ and Australia stayed impacted due to some COVID-19-related factors.

The Group expects Express Package volumes to be affected by a slowdown in macro-economic activity while activity-based revenue recovery is likely to be dependent on the number of people returning to offices, especially in Victoria.

The Group appointed Mark Cairns as its new Director effective 1 April 2021.

On 17 February, FRE ended the trading session at $10.86, down 1.54% from its previous close.

Summerset Group Holdings Limited

Summerset Group Holdings Limited (NZX:SUM, ASX:SNZ) reported 296 sales of occupation rights for the quarter ended 31 December 2020. It comprised 176 new sales and 120 resales.

SUM reported strongest quarter sales result in 23 years in Q4 of 2020. Casebrook (Christchurch), Ellerslie (Auckland), and Rototuna (Hamilton) retirement villages were the outstanding performers in the quarter.

Source: NZX’s SUM update, dated: 11 January 2021

Pre-sales in 2021 were also promising, particularly at SUM’s new Kenepuru (Wellington) and Te Awa (Napier) villages. The Group pre-sold over 93% of Te Awa’s villas that are due to be delivered in Q1 of 2021.

Summerset has forecast underlying profit to be between $96 million and $98 million for the year ended 31 December 2020.

On 17 February, SUM ended the trading session at $13.02, up 0.7% from its previous close.

Briscoe Group Limited

Briscoe Group Limited (NZX:BGP, ASX:BGP) posted strong performance in the final quarter of 2020.

Group sales crossed $700 million mark with incredible performance in Homewares and Sporting goods segments. Total sales for the Group stood at $701.8 million for 53 weeks ended 31 January 2021, up 7.47% for the year ended 26 January 2020.

BGP recorded its biggest sales day ever on Black Friday and surpassed the prior record by 19%.

Some of the sales highlights for Q4 (26 October 2020–31 January 2021) included the following:

  • Homeware sales rose by 18.77% to $156.2 million in the period while sporting goods sales increased by 17.5% as compared to Q4 last year.
  • On a same-store-same-day basis, the Group’s sales were 11.89% above the fourth quarter for last year.

The Group also paid a special dividend of 6 cents per share last month.

BGP expects reported NPAT to exceed $70 million for the full year. A final dividend is also expected to be announced with full-year results on 16 March 2021.

On 17 February, BGP shares traded flat at $5.65.

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

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