Michael Hill (NZX:MHJ): Which strategy updates were provided in AGM?

Highlights

• Michael Hill experienced a strong FY21 despite the impact of present lockdowns.
• MHJ’s transformation initiatives are focused on sales growth, margin expansion, elevating MHJ’s brand and enabling omni-channel experience.
• The Group has stepped into FY22 in a strong position.

Michael Hill International Limited (NZX: MHJ, ASX:MHJ), a jewellery retailer, witnessed an outstanding FY21, registering an increase in all metrics. It posted strong same store sales growth and margin growth in all its markets in Q1 FY22 compared to the same quarter in FY21.

The Group’s digital business posted a growth of 53%, delivering a year of record digital sales. MHJ also declared a final dividend of AU$3cps, taking the total dividend to AU$4.5cps for FY21.

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The company has a powerful strategy and is well positioned with a strong balance sheet to serve its transformation and growth plan.

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A look at MHJ’s strategy updates

Michael Hill provided some significant strategic initiatives for coming year in its AGM. Despite present business interruptions, MHJ stepped into FY22 in a healthy financial position, allowing it to continue its transformation, elevate the brand, and explore new growth prospects across all channels and geographies.

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The Group’s transformation agenda has emphasised on seven strategic pillars that have a focus on:

• Sales growth and margin expansion
• Driving competencies within the business
• Elevating the Michael Hill brand
• Enabling a true omnichannel customer experience

Michael Hill has a range of 285 stores across 3 countries with bricks-and-mortar retail at its core. The Group’s retail fundamental strategy has a focus on propelling increased sales, greater margins, lower costs, and a distinctive customer experience, strengthened by the new retail incentive scheme.

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The roll out of the new enterprise resource planning stage early in FY21 enabled omnichannel at MHJ. These efforts, together with in-store appointment booking through digital channels, are also planned to be gradually carried out across MHJ's worldwide network.

MHJ recently introduced "click and collect" for Christmas 2021, bringing more sales and a better customer experience while also connecting physical and digital companies.

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Medley, MHJ's pure-play demi-fine brand, was also unveiled during the year.

The Group's early excursion into third-party digital channels pushed MHJ to build an integrated marketplace solution, which will be launched in the first half of FY22.

On 12 November, MHJ ended the trading session at $1.19, up 0.85% from its previous close.

Bottom Line

MHJ is able to maximise and maintain the high-performance momentum in Q1 FY22 and the Christmas season, owing partly to the implementation of these strategic initiatives for FY22.

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