How are 4 NZX retailers doing amid supply chain issues?

Highlights

• The NZ government is working on making a supply chain strategy amid wide scarcities and delays in supply chains due to the COVID-19 pandemic.
• Michael Hill expects to deliver an EBIT of $49 million to $53 million in H1 FY22.
• TRA expects NPBT in the range of $40 million to $42 million in FY22.

The NZ government is working on making a supply chain strategy to prepare for uncertainty prevailing worldwide. There have been scarcities and delays in supply chains with things looking far from normal due to the latest COVID-19 variant, Omicron.

Greg Harford, Chief Executive of Retain NZ, stated that stock availability is impacted by supply chain problems and are likely to be hit even more if Omicron becomes more severe in the country as more workers would fall ill and require isolation.

Let’s look at how these 4 NZX retail stocks are doing and are likely to perform this year.

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

Jewellery retailer Michael Hill delivered sales growth of 9.8% in Q2 ended 26 December 2021 even after 2,381 lost store trading days. It also delivered a margin growth of 200 to 300 bps in all markets and a 28% increase in digital sales in the period compared to pcp.

RELATED READ: Which are 5 NZX retailers to make waves in 2022?

The Group expects to deliver an EBIT of $49 million to $53 million in H1 FY22. Systemic inventory management, strong cost controls and solid sales led to a healthy cash position at the end of the quarter.

On 19 January, at the time of writing, MHJ was trading at $1.48, down 1.33%.

Ebos Group Limited (NZX:EBO)

Medical, healthcare, and pharma products distributor EBOS announced on Tuesday that the Retail Offer closed on 17 January 2022. New shares will be issued at $34.5 under the Offer.

DO READ: EBOS (NZX:EBO): What is the issue price of Retail Offer?

EBO launched the Offer and Placement as part of the Group’s equity raising plan to raise $105 million to help partly finance the acquisition of medical device distributor, LifeHealthcare.

On 19 January, at the time of writing, EBO was trading at $40, down 0.99%.

Turners Automotive Group Limited (NZX:TRA)

Automotive retail, finance and insurance and debt management services provider Turner Automotive delivered solid growth in earnings in HY22 despite COVID-19 lockdowns upsetting Q2. The Group’s NPBT rose 24% supported by the geographic and earnings diversification of TRA.

ALSO READ: How are 3 NZX retirement villages faring amid Omicron outbreak?

The Group expects NPBT in the range of $40 million to $42 million in FY22.

On 19 January, at the time of writing, TRA was trading at $4.44, up 0.91%.

The Colonial Motor Company Limited (NZX:CMO) 

Motor vehicle dealerships owner Colonial Motor witnessed a strong Q1 and expects that the Group’s half-year trading PAT to 31 December 2021 would be substantially higher than pcp.

However, many challenges would loom in H2 of FY22 due to supply chain issues and uncertainty regarding the impact of incoming clean car taxes and the shifting nature of the pandemic.

On 19 January, at the time of writing, CMO was trading at $11.06, up 0.09%.

Bottom Line

The NZ government’s draft strategy on creating a national supply chain would require a minimum of this year’s end.

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