Would NZX retail stocks feel the effect of the Free trade Agreement?


  • The recent Free Trade Agreement (FTA) with the UK, would hugely benefit NZ as the deal would considerably lower down the costs for NZ exporters and businesses and would provide greater access to the UK market
  • Kathmandu Holdings to organise its Annual Meeting next month
  • Briscoe Group showed a remarkable half-yearly performance

Both New Zealand and the United Kingdom have signed the historic Free Trade Agreement, which would help in accelerating the countries’ post pandemic recovery.

The said deal would not only provide nearly NZ$1 billion boost to the NZ's GDP but will also give an unparalleled access to Kiwi exporters to the British market.

Would NZX retail stocks feel the effect of the Free trade Agreement?

Further, the UK would remove all tariffs on NZ exports mostly on consumer sector products like honey, wine, kiwifruit, dairy products, and on a wide range of industrial products.

That said, let us look at the 4 popular NZX retail stocks and their latest updates.

NZX retail stocks- KMD, MHJ, BGP, CVT

Image source: © 2021 Kalkine Media New Zealand Ltd, data source- Refinitiv

Kathmandu Holdings Limited (NZX:KMD; NZX:KMD)

New Zealand’s famous global outdoor lifestyle brand is Kathmandu Holdings Limited. The Company has announced to hold a hybrid Annual Meeting i.e., both physical and virtual, on 23 November.

In case a physical meeting is not possible owing to COVID-19 related uncertainties, the same will be communicated to its shareholders.

At the closing bell, Kathmandu Holdings gained 1.26% at NZ$1.610 on 22 October.

Related Read: A lens on 5 NZX retailers amid the prevailing lockdown

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

Known for its fine and appealing jewellery, Michael Hill International Limited is NZ’s famous jewellery brand. In its recently provided quarterly update for the period ended 26 September, MHJ disclosed strong same-store sales growth by 15.5% as compared to FY21Q1.

Must Read: Michael Hill (NZX:MHJ) How did it perform in the latest quarter?

Also, its digital sales soared by 58.2% on pcp.

Further, inspite of the closure of many of its stores during the current Delta outbreak, the Company remained resilient with earnings being well-managed due to prudent cost control and digital growth.

On 22 October, at the market close, Michael Hill International climbed 0.95% at NZ$1.060.

Briscoe Group Limited (NZX:BGP; ASX:BGP)

Briscoe is a leading retailer in NZ. BGP reported a 69.63% increase in NPAT to NZ$47.46 million and a 22.58% increase in sales revenue to NZ$358.42 million for the half-year ended 1 August 2021.

Interesting Read: Would these 5 NZX dividend stocks make one richer through 2022?

Gross margins rose because of better analysis and handling of promotional activities.

Towards the end of August 2021, BGP sales were considerably  down. Briscoe anticipates pent-up demand to increase sales from October through 30 January 2022, although there is still uncertainty.

On 22 October, BGP ended the trading session at NZ$7.2, up 2.86% from its previous close.

Comvita Limited (NZX:CVT)

Food and healthcare provider, Comvita made good progress in FY21 and stands on a strong footing. The Group reported an NPAT of NZ$9.5 million in FY21, up from a loss of NZ$9.7 million in the previous year.

Do Read: Will Comvita (NZX:CVT) achieve 50% digital sales by 2025?

CVT also improved its sales number by 17% YOY in Q4 and resumed dividend payments. The Group plans to deliver an EBITDA in line with the guidance of NZ$27.3 million for FY22 and posts single-digit growth in ANZ markets.

On 22 October, CVT ended the trading session at NZ$3.73, down 1.58% from its previous close.

Bottom Line

NZ companies dealing with consumer products are sure to reap benefits from the historic partnership with the UK. However, its direct impact on retail sector is yet to be seen.



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