How Did Retail Sector Respond To Fair Pay Proposal? A Look At WHS, KMD, BGP, HLG

Summary

  • NZ government declared a new fair pay bargaining system on May 7.
  • The employment law could boost wages and encourage trade unions.
  • However, retail industry feels the move is quite complex and could increase costs. 

On 7 May, Michael Wood, New Zealand’s minister of Workplace relations and Safety, revealed how unions and employers would work collectively in coming years to set minimum standards, which will consist of bare minimum penal rates, pay rates and other terms.

Under the proposal, fair pay bargaining may begin if a union has the support of at least 10% or 1,000 workers of a particular industry or profession.

ALSO READ: New Zealand’s Retail Expenditure Zooms Up In April 2021

Fair Pay agreements plan would increase wages across the country, enable firms to invest in hiring and create an even ground so that good employers are not undermined, as per Wood.

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The Council of Trade Union, one of NZ’s biggest unions, welcomed the move stating that the step would improve Kiwis’ lives by increasing wages of some of its lowest-paid workers.

However, the retail industry is worried that the changes proposed would increase costs.

DO READ: New Zealand to cut merchant service fee charged to businesses

Retail NZ calls the government’s new fair pay scheme complex, saying it would result in significant costs for businesses and less job openings in the retail industry. The industry remains worried that the draft arrangements would bind anyone in a certain industry or profession, regardless of whether or not they are involved.           

Let’s have a look at how these 4 retail stocks are faring:

Warehouse Group Limited (NZX:WHS)

The Warehouse Group set a new bar in the first half of FY21, with an adjusted NPAT of $111 million, up 140% on a year ago. For the time, group revenue increased by 7.4% to $1808.3 million, while online sales increased by 50.3%.

WHS posted record operating profits across four of its brands: Noel Leeming, The Warehouse, Torpedo7, and Warehouse Stationery. For FY21, the Group has announced a 13cps interim dividend.

On 12 May, WHS ended the trading session at $3.45, down 0.86% from its previous close.

Kathmandu Holdings Limited (NZX:KMDASX:KMD)

Kathmandu Holdings posted an impressive performance in 1H FY21 despite COVID-19 restrictions. The Group reported an NPAT of $22.3 million in 1H FY21, up from $7.6 million on pcp. Rip Curl and Oboz attained strong sales, thus, increasing the profitability and brand value of the Company.

GOOD READ: Are These 5 Small-Cap NZX Stocks Suitable For Long-Term Investment?

The Group plans to pay 2cps as interim dividend on 4 June this year.

On 12 May, KMD ended the trading session at $1.54, down 1.28% from its previous close.

Briscoe Group Limited (NZX:BGPASX:BGP

Briscoe Group made revenue of NZ$173.1 million in Q1 ended 2 May 2021, up 78.42% on pcp. The Group recorded more than 80% rise in homeware segment sales and 74% surge in sporting goods sales.

The Group expects sales for the half-year to be more than $292.4 million, reported for the first half of 2020.

ALSO READ: Have These 7 Stocks Gained Maximum Volume On NZX?

On 12 May, BGP ended the trading session at $5.62, down 0.18% from its previous close.

Hallenstein Glasson Holdings Limited (NZX:HLG)

Hallenstein Glasson reported a 13.6% rise on pcp to $181.98 million in Group sales and 28.6% rise in NPAT to $19.84 million for the 6 months to 1 February 2021. However, gross margin on sales reduced due to increased freight costs from shipping delays.

HLG paid an interim dividend of 23 cps on 16 April 2021.

On 12 May, HLG ended the trading session at $7.4, down 1.37% from its previous close.

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


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