MHJ - Michael Hill International.

[LaserEyeKiwi]

Greetings chaps/chappettes.

Still banging out the cash at a ridiculously low single digit earnings multiple! Even more so on an ex-cash basis!

Curious though that they managed to surge revenue by 11%, maintain gross margin, and yet had relatively flat net income. A lot of below the line increases unmentioned in the letter:

14485

Employee benefits expense: up from $75.3m -> $88.5m
Marketing costs: up from $23.4m -> $28.5m
Selling expenses: up from $9.3m -> $11.7m

All rising much more than the pace of revenue increase during the half.

[Rawz]

Hey LEK, GOOD TO SEE YOU BACK

same as HLG. Sales up but expenses up more

[sb9]

Happy to keep collecting those juicy divvys as they continue bulge..especially being paid out in AUD.

[winner69]

NPBT up $2.2m on pcp

Aust NPBT increased but declined in NZ and Canada - Canada $6.5m less than pcp

Interesting the brreakdown of where the small increase in profit came from - below

Reported numbers - not this comparable crap

[winner69]

When you guys rave on about MHJ cash flows I have to double check what I see

I see over the last 12 months (last two half years) a negative free cash flow ...ie cash burn

Even the H123 FCF of $8.9m isn't that flash

However let them slowly continue to give that mountain of cash back to shareholders ...but if things continue as they have of late it might be a different ball game in a year or so

This is how I see NHJ Free Cash Flows - wasn't H121 a bonanza?

[winner69]

Share price on fire today

Hope it gets to 140/150 soon

Chep az

[iceman]

Ram raids hurting the bottom line:

"Bracken said providing extra security for its Auckland retailers, which were impacted by multiple robberies and ram raids, had hurt profitability.

Its New Zealand pre-tax profit fell 8.2% to $17.1m, while revenue rose 13.8% to a record $76.3m. The company has adjusted the figures so they cover a comparable 26-week period.

“Given the uplift in the security incidents experienced by Auckland retailers through the half, additional investment in security was required to protect our team and stores, which had a direct impact on earnings,” Bracken said.

[Rawz]

When you guys rave on about MHJ cash flows I have to double check what I see

I see over the last 12 months (last two half years) a negative free cash flow ...ie cash burn

Even the H123 FCF of $8.9m isn't that flash

However let them slowly continue to give that mountain of cash back to shareholders ...but if things continue as they have of late it might be a different ball game in a year or so

This is how I see NHJ Free Cash Flows - wasn't H121 a bonanza?

Thats really interesting, W69. Thanks for sharing.

When I look at ASB they have FCF as follows;

FY17 -$4M
FY18 $48M
FY19 $45M
FY20 $75M
FY21 $108M
FY22 $69M

all Aus$. all different to your calcs. Do you know what the difference would be?

[Rawz]

Im not sure if im being dumb here or if i need to add more financial jiggery in....
W69 says FCF was $8.9m....

but I calculate FCF for the half year as:

cash from operating activities $47,590k
less capex $16,895k
FCF= $30,695k ($30.7m)

??

[winner69]

Im not sure if im being dumb here or if i need to add more financial jiggery in....
W69 says FCF was $8.9m....

but I calculate FCF for the half year as:

cash from operating activities $47,590k
less capex $16,895k
FCF= $30,695k ($30.7m)

??

You need to account for rent payments …in Finance Cashflows. Rent a real day to day thing that consumes a lot of cash eh and just because accounting standards changed doesn’t mean it goes away.

Maybe should call my FCF something like Adjusted Normalised Comparable Free Cash Flows …but the trend is still the same.

[Rawz]

You need to account for rent payments …in Finance Cashflows. Rent a real day to day thing that consumes a lot of cash eh and just because accounting standards changed doesn’t mean it goes away.

Maybe should call my FCF something like Adjusted Normalised Comparable Free Cash Flows …but the trend is still the same.

Oh yes of course. thank you.

Cant really rely on ASB or yahoo finance for real FCF calcs. Even if technically correct

[winner69]

Market not liking profit announcement

Better start buying their own shares again …isn’t it a bit sad when the company has to do this to keep share price.

Shouldn’t have just given everybody a big divie instead of trying to be clever …outcome might have been different

[winner69]

Seems MHJ and KMD having a race ……. Neck and neck in the race to somewhere

[Rawz]

I got a bob each way :eek2:

[nztx]

Uncle Bob might like Div yields :)

[winner69]

Buy back on again?

Go MHJ

[winner69]

I got a bob each way :eek2:

Still neck and neck in that race to somewhere

[Waltzing]

Really wish this stock would stay down...

[winner69]

Really wish this stock would stay down...

Maybe the 100 mark was the trigger for buy back to start 130 here we come again

Mind you they averaged $1.33 last time so might need to go to $1.40 this time

Cool

[Rawz]

when it gets down to a buck sellers dry up every time..

Wonder how Canada is going? when's the next div

[Waltzing]

Yes investors it will be interesting to see what happens next..

With country's in technical recession it will be real test of the retailers who have the market in their hands.

https://www.nzx.com/instruments/MHJ/dividends

[Toddy]

Check out Bayfair MHJ on Facebook being robbed in broad daylight this afternoon.

[nztx]

Check out Bayfair MHJ on Facebook being robbed in broad daylight this afternoon.


cant all be bad -- they must have the right stuff in store :)

[Habits]

Check out Bayfair MHJ on Facebook being robbed in broad daylight this afternoon.

They said they were fitting out the shops with cannons. Just fog cannons sadly, but still not deployed.

Here is a video if you can bear to watch it:

Bystanders' shock as trio raid Michael Hill store at Bayfair Shopping Centre | Stuff.co.nz
https://i.stuff.co.nz/national/crime/131544301/bystanders-shock-as-trio-raid-michael-hill-store-at-bayfair-shopping-centre

[Rawz]

Society a little broken at the moment. Something not working

[sb9]

Just in time for some weekend enjoyment, another juicy divvy landed in bank a/c today.

[clearasmud]

Just in time for some weekend enjoyment, another juicy divvy landed in bank a/c today.
Nice nice. Good on you. Hopefully the final dividend is even higher.

[Waltzing]

GOSH and was hoping for a dollar... no chance.. that new police minister just lifted the share price...

How many MHJ shops have been lifted in AUS or is it just a new local thing...

[Habits]

Terrible and sickening. Takapuna store
Why Michael Hill had to close one of its flagship stores
https://www.nzherald.co.nz/business/why-michael-hill-had-to-close-one-of-its-flagship-stores/MY2PP6RJJBFVJKRI754SMLXVRM/

[Rawz]

Terrible and sickening. Takapuna store
Why Michael Hill had to close one of its flagship stores
https://www.nzherald.co.nz/business/why-michael-hill-had-to-close-one-of-its-flagship-stores/MY2PP6RJJBFVJKRI754SMLXVRM/

vote national... labour weak and woke. nothing will change under them

[Habits]

Hell its bad. The royal oak jewellery shop that had a 200k smash up. 3 offenders only one jailed and not that long. They were spilling sob stories to the judge. If this were saudi there would be a lot of one handed people

[winner69]

Action at last ..an acquisition

Going to be eps accretive immediately ……what a nonsense statement …of course if profitable it’s going to EPS accretive,

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/410165/392879.pdf

[percy]

I think the acquisition makes sense.
Expanding the foot print of a "profitable" business should reward shareholders.
They will need to watch the cost of store fit outs.
Michael Hill stores took a very long time to cover their fit outs.
From memory it was 2 to 3 years, compared with LOV's under 6 months.

[Muse]

https://www.afr.com/companies/retail/michael-hill-sparkles-in-45m-buy-of-jewellery-chain-20230419-p5d1np

[winner69]

https://www.nbr.co.nz/investment/michael-hill-acquires-australian-jewellery-and-watch-retailer/


NBR not as posh as AFR

[Rawz]

nice little bolt on.

[Habits]

hard to watch this
Smash and grabber nabbed, diamonds on the floor in Hamilton mall heist | Stuff.co.nz
https://i.stuff.co.nz/national/crime/131839557/smash-and-grabber-nabbed-diamonds-on-the-floor-in-hamilton-mall-heist

[winner69]

At least mhj management expecting big increases in share price

The earn out payment seems to have a share component and the Table on Slide 13 of the preso has indicative share prices in a year from A$1.50 to A$1.90+

Cool eh

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/410166/392882.pdf

Market not too impressed with acquisition so far is it

[winner69]

Mhj prepared to pay 5.6 times ebitda for Bevilles

Much higher multiple that what they trade themselves

Sort of says they think their shares should be over 2 bucks

Heck

[Rawz]

The acquisition is a million times better than buying the bankrupt jewelry chain in the USA during the GFC storm. Rational for that one was, ‘this is a great opportunity to quickly enter the US market’. Good one…

Reading the presentation linked (thanks winner) the rational for this acquisition looks solid. leaving no consumer surplus on the demand curve. I like the target of increasing current store count from 26 to 80-100 over the next 5 years. Some room to improve ebitda through synergies and utilizing MHJ head office functions.

Obviously not going to be the last little bolt on acquisition.

Trading dirt cheap multiples with a 11% dividend yield. we will see multiple expansion if management execute and if you look at their track record I am certainly happy to be on board this train while collecting a nice divvy waiting for the re-rating.

The next 5 years pretty exciting aye with organic growth and clearly going to be more bolt on acquisitions. Best type of growth

[Waltzing]

Its going to be interesting to see if this executes...

hard to not pay up as this is the end of the market sugar high... maybe better to have waited 12 months to buy but hey...

AUS is NOT NZ and mineral prices cycles for IRON and COPPER could keep the KANGAS bouncing along for the next decade..

[Rawz]

Its going to be interesting to see if this executes...

hard to not pay up as this is the end of the market sugar high... maybe better to have waited 12 months to buy but hey...

AUS is NOT NZ and mineral prices cycles for IRON and COPPER could keep the KANGAS bouncing along for the next decade..

Agree, if this executes then market will have much more faith and then its re-rate time.

Personally i think they have proven themselves with the MHJ turnaround.
Fyfe (chair), Bracken (CEO) & Lowe (CFO) are SOLID

[winner69]

Jeez … Spheria have been selling

Hope it’s not the start of selling the lot

[winner69]

Share price back to 106, about the same as when they announced that acquisition

You would have thought an acquisition leading to growth would have been positive news

[Rawz]

taking a pounding today.. for no good reason or have i missed something?

this from DMX the other day:

During the month, the company announced the acquisition of Bevilles – a mid-market jewellery retailer with 26 stores across Australia. An acquisition of this nature had been well-flagged to the market, and in terms of size, is comfortably funded utilising the company’s current cash balance. Bevilles brand positioning is important as with its lower average basket size it has a very different market, but is complementary in terms of operating leverage through being a part of the larger group.

Paying in cash and without any equity component means the purchase is expected to be immediately EPS accretive. While there will be some obvious synergies, particularly around improved vendor terms and lease negotiations, the real value-uplift will be from rolling the Bevilles store network out to a more meaningful footprint in the Australian market. From a starting position of 26 stores, the company is preparing to add 10-15 stores pa for some number of years. For Michael Hill, Bevilles provides some growth potential that has been missing over the past couple of years. Success with Bevilles, together with continued business improvement momentum within the core Michael Hill brand, could make Michael Hill look very cheap from its current ~9 times P/E base.

[alokdhir]

That's the beauty and also the bane of such small caps ...go up fast when Gurus gets in and then go down fast too when Gurus already out but followers left in ...

Advise for choppy markets is always large cap blue chips as funds support them at lower valuations ...

KFL for a reason dont want too many small caps ...so Rawz idea of they looking at MHJ or TRA for PPH money maybe flawed ....they have burnt our money too many times on such stocks ..Metro Glass !!

[Rawz]

KFL once a owner of MHJ.. back when MHJ was rolling out stores all over the place. Never say never... they may see the Bevilles growth factor as just enough to get them back on board

[Rawz]

also please tell me KFL never invested in Metro Glass? if thats true wow loss of respect for them lol

[Rawz]

Sheesh found this thread back on page 6...

Anyways close to $1. always good buying close to $1 in current trading range (based on my limited TA knowledge- gurus feel free to chime in).

Waltzing will be buying no doubt.

Are MHJ management the best capital allocators in on the NZX? Based on their excellent buy backs, acquisition and dividends......

[winner69]

Could be worse ….on ASX tonight

Trading Update
Given the prevailing economic conditions and resulting softening of consumer sentiment, trade has been more challenging for the jewellery industry in the second half, particularly in Australia and New Zealand, with New Zealand having also been impacted by significant weather events and a recent resurgence of security incidents and related costs.

Third party transactional data for the total Australian retail jewellery segment has shown a double- digit decline in sales for the first four months of the second half. However, Michael Hill group sales for the second half1 are only down 3.5%, demonstrating that Michael Hill has continued to take market share even in a more challenging environment. Michael Hill’s total group sales for FY23 year to date2 are up 5.5%.

[winner69]

Hope margins holding up and expenses under tight control or else profits could be down big time

[Rawz]

How/why does that only get released to the asx…

Canada must be pumping based on that

[winner69]

How/why does that only get released to the asx…

Canada must be pumping based on that

After hours on ASX ….NZX had closed for day

Read full story tomorrow …bit about Beville and new credit finance arrangement orvsomething

[Rawz]

Beville is going to be the growth engine for MHJ over the next 5 years. All funded via cashflows from the mature MHJ business and new fancy finance facility with ANZ and HSBC.

Meanwhile us shareholders can sit back and collect the dividends and take comfort that this is trading single digit price earnings multiple.

Its a nice hold.

Also remember the earnout agreement requires MHJ share price to be over $1.80 or $2 was it? so MHJ guru management team clearly have SP capital gains in their minds.

[winner69]

Rawz, interesting how the years sales have been tracking

After 16 weeks +27.5%
After 27 weeks +11.7%
After 47 weeks +5.5%

Maybe full year a small +ve ….better than -ve eh

Canada must be pumping you say …..how do you think that when Canada sales in 1st half were ‘flat’

C need to wait until July for next update ….could be interesting.

[Rawz]

Yes its trending down like a lot of other companies.

I misread that announcement last night. I thought I read Aus/NZ way down but group up so I figured Canada saved the day.

Could get the chance to buy into the future growth cheaply on short term SP weakness before year end. See what happens.

[winner69]

Sort of headlines we like to see eh Rawz ..inbBusinessDesk

Michael Hill bucks Aussie retail downturn

[Rawz]

Sort of headlines we like to see eh Rawz ..inbBusinessDesk

Michael Hill bucks Aussie retail downturn

it warms the heart. bless them

[winner69]

Morningstar has big rave about Lovisa

Double it’s footprint by 2030 they reckon

Just as well not really a competitor for mhj

https://www.morningstar.com.au/insights/stocks/235946/an-asx-retailer-set-to-double-its-footprint-by-2030

[Rawz]

Those a rookie numbers W69.

MHJ plan to increase Bevilles footprint by 200% to 285% by 2028.

26 stores to 80-100 stores.

[winner69]

Must be something wrong with NZX feed ……..MHJ seems to have closed below a buck …..even hit 96 cents intraday

[Valuegrowth]

Unless purchasing power improve, there will be less demand for non-essential items in the short-run. I expect some sort of turnaround when inflation(high asset prices) fall along with cost of doing business.

[Rawz]

Must be something wrong with NZX feed ……..MHJ seems to have closed below a buck …..even hit 96 cents intraday

Sheesh i really thought $1 would hold. Chart not looking good aye

[Rawz]

In the dividend we trust

[winner69]

Down another 3 cents on Friday to close at 96 cents

Hope not the start of a long slide down to 70/80 cents

[Rawz]

If they can’t hold the DPS (noting less shares around these days) can’t fall too far surely.

[Valuegrowth]

Nothing to worry much about dropping in cents as long as they are going concern.

[winner69]

Share price chart looking a bit like how sales are going ….declining

[Rawz]

Share price chart looking a bit like how sales are going ….declining

Inspiring stuff

Last time I loaded up in the 80cent range it worked well. Could get really ugly and we get another chance?

[winner69]

Guy on other site has interesting chart …says A$0.635 a possibility

[Valuegrowth]

Very interesting. In my view, no body can predict correctly, but we can try to estimate. Even Apple has introduced "buy now pay later."

It means consumer purchasing power is falling rapidly.

[Rawz]

A bit of a tumble today. that guy on the other place that said some silly price due to technical analysis might be right based on the drop today and the buy side depth. :scared:

[winner69]

A bit of a tumble today. that guy on the other place that said some silly price due to technical analysis might be right based on the drop today and the buy side depth. :scared:

MHJ must have you pulling your hair out rawz

Downtrend still quite strong ….and still remains rather unloved

Might get an update in a few weeks and an idea what full year result will be

MHJ master of +ve spin and I think they’ll have to pull all stops out to paint a shiny bright picture this time around.

[winner69]

Even KMD gone below a buck today

[Leemsip]

Even KMD gone below a buck today

Retail getting pumped. Same over in Oz. Should be some good opportunities coming up.
How long to wait before catching the knife though.

[Rawz]

MHJ must have you pulling your hair out rawz

Downtrend still quite strong ….and still remains rather unloved

Might get an update in a few weeks and an idea what full year result will be

MHJ master of +ve spin and I think they’ll have to pull all stops out to paint a shiny bright picture this time around.

I sold and put the money into NZA and TSK.

But always a love affair me and MHJ. So ill be back in one day

[winner69]

Thursday is the day when we’ll hear if the ‘challenging conditions’ have continued since the last update which said the first 20 weeks of H223 sales were down 3.5%

Way share price going today maybe it’s no so good news

[winner69]

Suppose not too bad in a “challenging market”

Full year Comparable EBIT (whatever that means) down about 10% on last …..looks like second half about breakeven at npat level

But all looking good for F24 so no worries

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/414969/398786.pdf

[winner69]

Canada showed no growth …hope not becoming a bit of a dog

[Rawz]

Pretty good result all things considered.

[winner69]

I try hard to really like (enthuse over) MHJ

Sales trend as per chart not that inspiring and this years profit much the same as 2017 hardly inspires confidence.

Full credit to whoever writes their announcements ……always so so positive but words don’t seem to translate into good numbers …..steady as she goes probably best description

[percy]

I try hard to really like (enthuse over) MHJ

Sales trend as per chart not that inspiring and this years profit much the same as 2017 hardly inspires confidence.

Full credit to whoever writes their announcements ……always so so positive but words don’t seem to translate into good numbers …..steady as she goes probably best description

I too find it hard to get enthused with MHJ.
I did get over excited late last a bought a small holding,however when I could not load my banking details into the Aussie share registry's web site I sold.
Stores Canada plus 1,NZ minus 2,Aussie not counting Bevilles minus 1.So 2 fewer stores.
Bevilles 26 stores.
The big question is whether Bevilles' roll out will be profitable,and if so by how much.

[Waltzing]

well there are buyers today... really a big day almost ... share price did not collapse...

[winner69]

MHJ share price not wanting to say over 100

Worries about the execution of that new acquisition or market not liking the sell less make less strategy

[Rawz]

MHJ share price not wanting to say over 100

Worries about the execution of that new acquisition or market not liking the sell less make less strategy

i was thinking the opposite and sort of surprised its staying up around $1. well done MHJ sp...

[clearasmud]

MHJ share price not wanting to say over 100

Worries about the execution of that new acquisition or market not liking the sell less make less strategy

Discretionary retail is under the pump.
Market also hates execution risk.
And hasn't forgotten what happened last time.

[Rawz]

im hoping one day i can load up in the 80 cent range. like 88 cents would be a treat. one can dream

[Sideshow Bob]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/417058/401375.pdf

Key Financial Results

• Group operating revenue increased by 5.8% to $629.6m (FY22: $595.2m, FY21: $556.5m).
• Comparable earnings before interest and tax (EBIT) decreased by 6.3% to $58.9m (FY22: $62.9m), giveninflationary cost pressures and substantial investments in New Zealand security measures. This comparesfavourably to FY21 by 4% (FY21: $56.6m).
• Group gross margin decreased by 50bps to 64.2% (FY22: 64.7%), yet 150bps ahead of FY21 (62.7%).
• Statutory net profit after tax decreased to $35.2m (FY22: $46.7m), with the variance to comparable EBITperformance largely driven by AASB16 Leases & SaaS.• Healthy inventory position to support elevated sales at $203.3m (FY22: $181.5m), with the increase mainlyattributable to the Bevilles acquisition.
• Deployment of cash on share buy-back, dividends, the Bevilles acquisition and reinvestment in the business,resulted in a net cash position of $8.4m (FY22: $95.8m).
• A three year $90m banking facility was finalised on favourable terms in June, to support strategic growth initiatives.
• Final dividend of AU3.5 cents per share declared, delivering total dividends for the year of AU7.5 cents per share(FY22: AU7.5 cps).

Operational Performance

• Group revenue was up 5.8% for the year, with Australia +9.1%, New Zealand +5.8% and Canada flat.
• Digital sales were largely flat at $41.3m (FY22: $41.9m, FY21: $34.0m) for the year, demonstrating a strong secondhalf recovery from -9% at the end of the first half.• Brilliance by Michael Hill membership now over 2 million (FY22: ~1.4m), driving repeat customers and higher ATV.
• Key initial focus for Bevilles is on integration and store roll outs, with three sites secured and another three sitesclose to finalisation for pre-Christmas opening, with a further tranche of sites already identified for the second half.The newly acquired Bevilles business contributed four weeks of sales to the FY23 Group result.• For Michael Hill, three new stores opened (AU:2, CA:1) and five under-performing stores permanently closed (AU:3,NZ:2) during the year. With the inclusion of 26 acquired Bevilles stores, the store network totals 304 across allmarkets at the end of the year (FY22: 280).

[winner69]

Sales up 6% …..NPAT down 25% is real story when you disregard all the sparkling talk ….but after all they are sales people

And the $35m real profit is even less than F21

[Rawz]

Last few years was great watching the margin expansion. Now are we looking at a trend backwards. started with 50bp hope its not going to drop by 200-300bp

Still a great company with clear strategy for growth in their home markets. Balance sheet is strong to support the growth. Dividends will continue to flow.

Potential for SP to drop if the slow down continues. 80 cent range would be lovely

[LaserEyeKiwi]

A bit less attractive now the large cash pile has virtually disappeared.

Not quite sure how to take the result considering the extra week (it is 53 weeks vs 52 weeks) and the 4 weeks of breviles results included.

[winner69]

A bit less attractive now the large cash pile has virtually disappeared.

Not quite sure how to take the result considering the extra week (it is 53 weeks vs 52 weeks) and the 4 weeks of breviles results included.

Jeez it was 53 weeks and 4 weeks of Brevilles. …….so the 25% fall in profit was even worse

[Rawz]

Free cashflow $1m. Paid $30m in dividends.
Not sure how much they had to spend on the extra security fitouts. $5m-$9m?

Debt is coming to the balance sheet to fund the brevilles expansion while paying dividends

[LaserEyeKiwi]

Free cashflow $1m. Paid $30m in dividends.
Not sure how much they had to spend on the extra security fitouts. $5m-$9m?

Debt is coming to the balance sheet to fund the brevilles expansion while paying dividends

Inventory increased substantially, so maybe a one time thing alongside the breville acquisition.

[Rawz]

I calculate ROIC is 42%

seems incredibly high?

EBIT= $75.2M
Tax rate= 30%
invested capital= $180m

[winner69]

I calculate ROIC is 42%

seems incredibly high?

EBIT= $75.2M
Tax rate= 30%
invested capital= $180m

Need to take the $45m of rents/leases not included in EBIT (inbthecI part)

So 75-45=30 less tax say 20 over your 180 gives 11%

That’s how I see it

[Rawz]

Need to take the $45m of rents/leases not included in EBIT (inbthecI part)

So 75-45=30 less tax say 20 over your 180 gives 11%

That’s how I see it

Ah yes, thanks

So just over WACC (9.7%) if you assume a 10% cost of equity

[winner69]

Ah yes, thanks

So just over WACC (9.7%) if you assume a 10% cost of equity

Some would say we should allow for the non-comparables eh and make it look a lot better.

[Rawz]

Some would say we should allow for the non-comparables eh and make it look a lot better.
So the business works well enough, I.e doesn’t destroy value

[winner69]

Ha ha …one always needs to be careful when cutting and pasting or updating past reports


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/417205/401578.pdf

[LaserEyeKiwi]

Ha ha …one always needs to be careful when cutting and pasting or updating past reports


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/417205/401578.pdf

Errors like this pop up way too frequently with NZX reports, how do these things not get seen by presumably the multiple senior executives that would be reading this document before it gets posted. I guess the answer is obvious.

[winner69]

Bracken doing better than shareholders ….and heaps more to come

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/417640/402230.pdf

[Rawz]

Bracken doing better than shareholders ….and heaps more to come

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/417640/402230.pdf


Another 2m today. With his holding now over 2.8m shares he certainly should be driven to see SP performance.......

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/417951/402644.pdf

[winner69]

Another 2m today. With his holding now over 2.8m shares he certainly should be driven to see SP performance.......

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/417951/402644.pdf

You’d think so but then they didn’t cost him anything so motivation might not be what it could be.

[Rawz]

You’d think so but then they didn’t cost him anything so motivation might not be what it could be.

yes true but $4m free money is better than $2.8m free money lol. Come on Daniel you can do it

[Sideshow Bob]

AGM Presos

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/421639/407162.pdf

"There is no doubt that retail conditions have continued to be very challenging in all markets, as the groupcycles record Q1 sales in the prior year.

For the first nineteen weeks of FY24, Group sales (including Bevilles) are up 2% on prior year, and up 26%on FY22. For the core Michael Hill brand, sales have continued the recent trend and are down on the recordstart to FY23, however are up 13% on FY22 and up 15% on pre-pandemic trade in FY19.

Group gross margin has continued to be under pressure, with sustained elevated diamond and gold pricingand dampened consumer confidence due to economic challenges, leading to greater promotional activityacross all retail categories and markets."

[blackcap]

You’d think so but then they didn’t cost him anything so motivation might not be what it could be.

I would concur with that. I spoke with Daniel a few days ago. He certainly is charming. I hope as a shareholder that he would be motivated to move the company in the right direction and get the SP up. That said, retail is tough at the moment. Not sure how he is achieving Long term hurdles (to get the shares) with where the SP is tracking.

[winner69]

Summary of first 19 weeks after taking out the glowing bits …….

Group sales (including Bevilles) are up 2% on prior year, …… For the core Michael Hill brand, sales have continued the recent trend and are down on FY23,….and margins remain under pressure

[Rawz]

Where is the bottom here?

85 cents too good to be true?

MHJ has always been good to me. Keen buy back in but the chart looks terrible. Jarden says div yield is 11%

[winner69]

Where is the bottom here?

85 cents too good to be true?

MHJ has always been good to me. Keen buy back in but the chart looks terrible. Jarden says div yield is 11%

Think chart/price reflects performance

But if good to you before maybe now is good time for it to be good to you again

I’ve lost faith but morbid fascination keeps me watching

[Rawz]

Think chart/price reflects performance

But if good to you before maybe now is good time for it to be good to you again

I’ve lost faith but morbid fascination keeps me watching

Lost faith in what? Like the business model or the acquisition and store rollout of Bevilles?

Or you mean this is a cyclical and dont want to know it at this stage in the cycle? But faith returns once its bottomed

[winner69]

Lost faith in what? Like the business model or the acquisition and store rollout of Bevilles?

Or you mean this is a cyclical and dont want to know it at this stage in the cycle? But faith returns once its bottomed

Probably all those things apply …in spite of their sparkling rhetoric the numbers don’t stack up

Maybe in as few years time things will be different …but that was said a few years ago as well

[sb9]

Getting some love from market in the last week or so.

[clearasmud]

Getting some love from market in the last week or so.

Likely the low is in.
Currently a mismatch between the asx and nzx.
Selling at 93.5c nzd and 93.5caud.

[Rawz]

The recent chart of MHJ is whack.
Why the SP went to $1 i dont know,,

Will be interesting to see what it does in the coming months. I assume drift back lower

[winner69]

The recent chart of MHJ is whack.
Why the SP went to $1 i dont know,,

Will be interesting to see what it does in the coming months. I assume drift back lower

Could be an update this week

That’ll be exciting one way or other

Share price 120’s or 80’s

[winner69]

Suppose they don’t have much cash left to do another share buyback ….last one helped the share price lol

[Rawz]

MHJ did very well out of the revenge spend mania post covid lockdowns. At one point had over $100m cash on the balance sheet- not bad for a $365m market cap company. They used the cash to buy another business with great future growth, buy back a bunch of shares and pay out larger dividends.

Compare to other retailers like WHS who also did very well coming out of covid and all they have done is squandered money on the market and miss manage T7.

MHJ may not have got the share buy back price completely right but overall they spent their winnings far better than most. I don’t hold but will again another day, when the time is right

[winner69]

DMX Asset Management not that excited about MHJ but still holding

I think Rawz works for them lol

[Rawz]

Big fan of DMX! They were late to the party on MHJ and now have to hold through the bottom of the cycle. whoops

[winner69]

Big fan of DMX! They were late to the party on MHJ and now have to hold through the bottom of the cycle. whoops

You into Kinatico then

[Rawz]

You into Kinatico then

No didnt like it, but am into FINDI :t_up:

[percy]

DMX Asset Management not that excited about MHJ but still holding

I think Rawz works for them lol

DMX were right.Tough trading.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/424993/411178.pdf

[Muse]

worth recalling this half will include contribution from their brevilles (australian) acquisition, relative to the same period last year which did not. although to be fair, I never fully understand the basis of their 'update' earnings - they are normalised to infinity a bit of effort to recy back to stat figures.

[850man]

DMX were right.Tough trading.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/424993/411178.pdf

Not an unexpected position. NZ are being squeezed by the RBNZ to reduce spending, jewellery has to be right up there in the non-essentials list. Aussie well ahead but their country not in recession or struggling to tame inflation. This could bode well for the likes of HLG and their Aussie business

[Muse]

Not an unexpected position. NZ are being squeezed by the RBNZ to reduce spending, jewellery has to be right up there in the non-essentials list. Aussie well ahead but their country not in recession or struggling to tame inflation. This could bode well for the likes of HLG and their Aussie business

aussie sales are ahead simply because they acquired brevilles in australia.

[Rawz]

DMX were right.Tough trading.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/424993/411178.pdf

Thats a rough update. But nobody can really be surprised that Jewlery is struggling during a cost of living crisis.

How did DMX even end up in this stock??? MHJ is a mature cyclical. I thought they were supposed to target micro caps doing stuff, like growth lol.

[winner69]

worth recalling this half will include contribution from their brevilles (australian) acquisition, relative to the same period last year which did not. although to be fair, I never fully understand the basis of their 'update' earnings - they are normalised to infinity a bit of effort to recy back to stat figures.

Wonder if we will ever see what Beville says are.

Oz sales up $19m ….when they acquired Beville they mention something like $50m annual sales

Would have to assume Michael Hill sales down ib Oz as well as NZ

[winner69]

Comparable EBIT likely to be 30m to 33m

Last year was 54m ….that’s a huge hit …assuming comparable this year iis defined same was as last year.

Good to see getting rid of some expensive HQ people

[winner69]

Gross Margin 61% v 65% last year ….wonder how much was promo pricing?

[Muse]

Wonder if we will ever see what brevilles says are.

Oz sales up $19m ….when they acquired Breville they mention something like $50m annual sales

Would have to assume Michael Hill sales down ib Oz as well as NZ

Not sure - in FY23 it was tucked into the Australian segment results within the notes to the financials - but as it was only owned for 4 weeks of FY23 not surprising. Proper disclosure would see it broken out as its own segment in FY24 and onwards but that could be asking too much.

Bevilles is/was a $65m turnover / $8m EBITDA per annum business.

Core MHJ stores in australia shrunk by 5 during the 26 week period to 31 dec 23.

[Rawz]

They did say at the time of the acquisition that some new Breville stores were to replace existing MHJ stores.
In todays update they didn't mention if this occurred with the new openings/closing mix. Wonder if this is the case.

Total store count should gradually increase over the next few years one would expect

[percy]

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/e8CfAbmY1jVzCQtDLYkCyA/6EQHq6fShJqlx4PtPwk2RQ

[winner69]

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/e8CfAbmY1jVzCQtDLYkCyA/6EQHq6fShJqlx4PtPwk2RQ

Pretty dire headline says it all

Michael Hill Jewellers closes stores, sacks staff as profit nosedives

Hard to see them making much profit FY24 …….maybe npat $15m to $20m …..say eps of 5-6 cents

Maybe a cyclical stock but if it is the company always seems a way to disappoint

[LaserEyeKiwi]

Pretty dire headline says it all

Michael Hill Jewellers closes stores, sacks staff as profit nosedives

Hard to see them making much profit FY24 …….maybe npat $15m to $20m …..say eps of 5-6 cents

Maybe a cyclical stock but if it is the company always seems a way to disappoint

$15-20m NPAT - are you talking for the H1 or FY??

[winner69]

$15-20m NPAT - are you talking for the H1 or FY??

Full year …just my quick sums

May about $20m is better guess

Last 12 months Comparable EBIT about $36m …..can’t see things getting better through to June

[Goob]

I'm just very skeptical of the Breville's acquisition.

4 new Beville's stores in Australia in the six months, up from 26. So 15% store count growth in a single half. In the same period 5 under-performing Michael Hill stores were closed in Australia. A detailed breakdown of this store mix would be very interesting to see as, at a glance, it does seem like cannibalisation.

Seems management intend to follow through on the plan to 3-4x the Beville's store count by FY28 (80-100), in a macro environment where LFL AU store sales are probably run-rating at negative mid to high single digit %s (and likely getting worse?). Let's not forget Beville's is no crown jewel and had its own troubles 10 years ago (went into administration after a change to the store footprint strategy https://www.jewellermagazine.com/Article/4449/Bevilles-opens-first-new-store-since-collapse).

For me, at least a positive in that update was slight growth in Canada.

[percy]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/425631/411951.pdf

How would it come to this.?
4 year's packaging?

[winner69]

Lots of pages but no mention of real profit, like NPAT

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/426845/413423.pdf

[winner69]

Found it …NPAT was $15.394m ….down 59% on pcp

Future looking good though

[Rawz]

MHJ doing it very tough. Wonder how low SP will go during this cycle

[winner69]

Weren’t even cash flow +ve ….operating - $1.7m outflow allowing for rents and capex of $17.0m

But still paying divies

[Rawz]

Weren’t even cash flow +ve ….operating - $1.7m outflow allowing for rents and capex of $17.0m

But still paying divies

Yes they will need to be careful not to load too much debt onto the balance sheet.

Margins down 400bp from post covid peak.

Tough tough trading.

Would rather own MHJ than WHS or KMD put it that way.

Retailer rankings- best top, worst last:

TRA
BGP
2CC
HLG
MHJ
BRW
KMD
WHS

[whatsup]

Yes they will need to be careful not to load too much debt onto the balance sheet.

Margins down 400bp from post covid peak.

Tough tough trading.

Would rather own MHJ than WHS or KMD put it that way.

Retailer rankings- best top, worst last:

TRA
BGP
2CC
HLG
MHJ
BRW
KMD
WHS

Are the chickens coming home to roost after all these years ?

[nztx]

Thought this lot were fair screaming along creaming it .. aside from Kiwi Ramraid central which was the
blight on top of the job ;)


WTF went wrong so fast for things to suddenly turn to sh*t so badly ? ;)

[nztx]

Are the chickens coming home to roost after all these years ?


It's the season to paint things Bad as - with as much in Losses & Red Ink as conveniently possible

Dig through the drawer for anything that needs to show some impairment or write downs

Tough times , high interest rates .. don't really want to cough up too much in Div's in volatile times

Dont worry about the sucker stakeholders out there .. the smart ones have probably already loaded
up high on generous Term Deposit rates anyway to be too much bothered with equities ;)

[winner69]

Canada still seems a bit of a dog for them …..another global expansion failure?

[Ferg]

Funny you posted the exact 2 things I was looking for. It took me ages to find the NPAT - I ended up looking at the HY accounts to find it. And when you deduct lease payments from operating cashflows.....you know the rest.


Lots of pages but no mention of real profit, like NPAT


Found it …NPAT was $15.394m ….down 59% on pcp


Weren’t even cash flow +ve ….operating - $1.7m outflow allowing for rents

I like that you posted this:

Future looking good though
I'm starting to think some (all?) companies actually believe their own spin....given the numbers of times you have posted that I am convinced it is with your tongue planted firmly in your cheek. Not just MHJ but every other thread where I see this comment. Trying to not be cynical but it's hard to know what to believe.....even from those closest to the business operations.

[Waltzing]

Underlying EBIT is probably a better long term stats as other stuff can come and go.

Gold is slated to stay elevated for the next 24 months...

Inflation for sure means this one will be beached till people feel they can play in the sun again..

[whatsup]

B!oody RAM RAIDS have taken its toll, MHJ has spent $4 mil in security of its stores, sign of the times, judges soft of rat bags , sad and sorry country where the great unwashed rule.

[Rawz]

SP stuffed now. Big downtrend. Company struggling in climate (like all retailers). Wonder how low it will go

[winner69]

SP stuffed now. Big downtrend. Company struggling in climate (like all retailers). Wonder how low it will go

Asked myself whether MHJ have ever been good …ever lived up to the hype they churn out.

Performance wise over the last 10 years answer is NO

Share price wise only 2020 through 2021 ……when you made a killing ……well done, even if it was luck

You going to havecanother go? Hoping the market will get excited força year or so before the inevitable let down.

[Rawz]

Asked myself whether MHJ have ever been good …ever lived up to the hype they churn out.

Performance wise over the last 10 years answer is NO

Share price wise only 2020 through 2021 ……when you made a killing ……well done, even if it was luck

You going to havecanother go? Hoping the market will get excited força year or so before the inevitable let down.

They did alright recently with their covid windfalls. Made lots of cash.. bought some shares back, paid some divs, bought a business even.

They didnt completely pi$$ it into the wind like say WHS did with the market and T7 blowing up.

MHJ will always be on the watch list for another lucky 2020-2021 period. No doubt it will come around again. MHJ been in business coming up 40 years. Just need to be patient and watch

[limmy]

Asked myself whether MHJ have ever been good …ever lived up to the hype they churn out.

Performance wise over the last 10 years answer is NO

Share price wise only 2020 through 2021 ……when you made a killing ……well done, even if it was luck


You going to havecanother go? Hoping the market will get excited força year or so before the inevitable let down.
They were very good prior to that when they were expanding into Australia and subsequently into Canada.

[winner69]

They did alright recently with their covid windfalls. Made lots of cash.. bought some shares back, paid some divs, bought a business even.

They didnt completely pi$$ it into the wind like say WHS did with the market and T7 blowing up.

MHJ will always be on the watch list for another lucky 2020-2021 period. No doubt it will come around again. MHJ been in business coming up 40 years. Just need to be patient and watch

That was a good trade …you really a trader eh as opposed to an investor

I like your approach though …cheap companies with good news are the ones and a far better bet than those who keep churning out bad news

[Rawz]

Retail is a tough business. How often do you hear about these big brand names going into liquidation? Usually because they dont pivot to the new trends. online, click and collect, virtual shopping etc.
Like when Blockbuster had serious competition from netflix it diudnt pivot it instead tried to defend its current model by selling candy in their stores....

MHJ to their credit have shrunk their brick and mortar store footprint and expanded their online business.
Additionally they opened up new brands like Medley to get their share of the fake jewelry sector.

MHJ been around awhile like i say and i feel like they will survive and punters will get the chance to make heaps of money again on this cyclical

[Rawz]

That was a good trade …you really a trader eh as opposed to an investor

I like your approach though …cheap companies with good news are the ones and a far better bet than those who keep churning out bad news

No lol. I invested for the big dividends from strong cashflows and i collected them. Then the situation changed so i exit :)

[nztx]

Remember the Deferred dividend payment episode out of this mob ? ;)

[Waltzing]

This stock will probably always be a trade ... you need some fun stocks in a market...

"For the first seven weeks of FY24H2, Group sales(including Bevilles) are up 9.5% on prior year, with theMichael Hill Australia retail business driving theimprovement in performance against FY24H1:• Australian segment sales (including Bevilles) +19.6%• New Zealand segment sales -9.2%• Canadian segment sales -0.9%• External transactional sales data demonstrates that boththe Group and the Michael Hill brand continue to takemarket share"

looks like Rob F has taken the oppo to go around with a knife and get ride the of middle management and the dead wood....

move out of the new building and move into a warehouse...

NZ -9.2 ....


Nice concept store ... but think that to cut costs the team moves into a loft....


14974

[nztx]

Back to 50-60c levels soon ? :)


On most recent Div & Performances announcements those sort of levels must be within reach again

[Waltzing]

They certainly got smashed by the "Temp inflation" ...

be very interesting to see the next half year result....

You dont often get such a trading oppo... cheap share that bounces about ....

Love the new store look but Rob will need to take the knife to the operation and get those expenses under control...

Looks like someone got into the office and cleaned out some desks....

sometimes a smashing is an opportunity for some chairs to be put away....

Rob F wont want to be sitting on a smashing ..

Gold hasnt doubled...

NZ result is a shocker and really what does it say about the country...

Maybe they should shut more stores in NZ and concentrate on AUS...

They also need to get that balance sheet under control...

Could be 2026 before you see the results of the AUS economy. NZ is a FRAGILE economy according to LUX ON ...

MH should take the knife to NZ ..

Great short term trade oppo when and if inflation and gold swings in there favour.

Notice the long term Gold chart... it isnt down.

[percy]

In the past year MHJ's share price has gone from $1.14 down to 73 cents.ie a drop of 36%.
However at the cheap end of The Malls LOV's share price has increased 33.33% from $24.00 to $32.00.

[Waltzing]

Yes LOV has out performed .. and says the knife needs to come out as this should be shock to the board...

lets hope so as NZX needs every stock it can get to do something profitable business...

else its just join the AUSSI dollar and take up the offer in the AUS constitution if its still here... section 6...

14975

[nztx]

They certainly got smashed by the "Temp inflation" ...

be very interesting to see the next half year result....

You dont often get such a trading oppo... cheap share that bounces about ....

Love the new store look but Rob will need to take the knife to the operation and get those expenses under control...

Looks like someone got into the office and cleaned out some desks....

sometimes a smashing is an opportunity for some chairs to be put away....

Rob F wont want to be sitting on a smashing ..

Gold hasnt doubled...

NZ result is a shocker and really what does it say about the country...

Maybe they should shut more stores in NZ and concentrate on AUS...

They also need to get that balance sheet under control...

Could be 2026 before you see the results of the AUS economy. NZ is a FRAGILE economy according to LUX ON ...

MH should take the knife to NZ ..

Great short term trade oppo when and if inflation and gold swings in there favour.

Notice the long term Gold chart... it isnt down.

Wonder if the buyers of Torpedo 7 want to add a Jewellry & Rings chain to their bundle ? ;)

With all the smoke cannons onboard it might be $10 a shop rather than a buck to take the lot away ;)

[Waltzing]

Sometime a good smashing is healthy. dont see that store as being anything but a one off...

NZ is a wild west country now ... gate up... get your security camera and check your security firm isnt run by criminals....

AUS could be where MHJ goes and might as well delist from NZ...

They seem to be an AUS company now... NZ is just a sub branch and probably needs to lose at least 6 stores over time....

If they can hold their own in AUS and Canada then so be it and cut head office to the bone...

WHS is a much bigger problem then this one....

WHS had to many moving parts...

NZ economy is in a Roger D moment but doesnt know it...

Public debt is where its at and WITH ALL THE OFF BALANCE SHEET debt does anyone know what it is..

[winner69]

No more Silvermoon..gone broke

https://www.nzherald.co.nz/business/popular-jewellery-store-silvermoon-goes-into-liquidation/NJ2MCUZYNZHDPPAXJWPAEOWKTE/

[Rawz]

68 cents wow. last time i bought at these levels i did very well. However I dont think buying now is a very good idea....

[Goob]

No way did these guys just announce a big downgrade at 5:20pm on a Friday, and only on the ASX...

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02808088-2A1523942

[blackcap]

No way did these guys just announce a big downgrade at 5:20pm on a Friday, and only on the ASX...

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02808088-2A1523942

They certainly did. Very cynical if you ask me. What pricing level will this see the stock go down to one wonders?

[Flugenbear]

Yeah, just seems dodgy to release a negative announcement in this manner.
Hoping all us gullible shareholders are down at the pub spending our last dividend.

[Rawz]

Wow a $10m loss for Q3.

Retail is stuffed here and Aus

SP is in a dire downtrend already, this will continue the pressure

[winner69]

Yeah, just seems dodgy to release a negative announcement in this manner.
Hoping all us gullible shareholders are down at the pub spending our last dividend.

Yep the old bad news late Friday and hope nobody will notice trick

[percy]

Yep the old bad news late Friday and hope nobody will notice trick

Well it worked for me.I missed it.
A shocker.
"Actions have been taken to reduce costs across the business including inventory, corporate
overheads, underperforming stores and further optimisation of store rostering."
I guess the number of underperforming stores has increased.
I do not hold,however a Trust I am a trustee of still holds LOV.

[winner69]

Heading to a full year LOSS

Might be tough market conditions but Michael Hill another old time retailer whose lost their way ….hard to see them ever being ‘great’ again …and ill conceived move into Canada and that Beville acquisition along with the move into a flash new HQ all bad moves.

But no doubt many will say just a glitch and Michael Hill be be great again …eh Rawz

[winner69]

Well it worked for me.I missed it.
A shocker.
"Actions have been taken to reduce costs across the business including inventory, corporate
overheads, underperforming stores and further optimisation of store rostering."
I guess the number of underperforming stores has increased.
I do not hold,however a Trust I am a trustee of still holds LOV.

Amazing how Lovisa have performed last few yearsceh Percy

[Rawz]

Heading to a full year LOSS

Might be tough market conditions but Michael Hill another old time retailer whose lost their way ….hard to see them ever being ‘great’ again …and ill conceived move into Canada and that Beville acquisition along with the move into a flash new HQ all bad moves.

But no doubt many will say just a glitch and Michael Hill be be great again …eh Rawz

Haha yes Winner, keep it on the watchlist for FY26/27

Canada actually the standout performer right now

They shouldn’t have spent all their cash on the buyback. How nice would everyone feel if they had $20m cash on the balance sheet just sitting there as a guardian protecting them from this downturn.

[percy]

Amazing how Lovisa have performed last few yearsceh Percy

Yes an amazing performance.

[winner69]

Haha yes Winner, keep it on the watchlist for FY26/27

Canada actually the standout performer right now

They shouldn’t have spent all their cash on the buyback. How nice would everyone feel if they had $20m cash on the balance sheet just sitting there as a guardian protecting them from this downturn.

Bracken might be joining the others in the CEO departure lounge soon.

[Waltzing]

Group Sales- For the first 45-weeks of FY24, Group sales (including Bevilles) were up 4.7% on LY, and the sales for the core Michael Hill brand were still negative to LY.

Revenue for retail operations FY24H1 FY24YTD
to Wk26 toWk45
Segment figures in local currency Australia segment 10.2% 12.3%
New Zealand segment -10.3% -11.1%
Canada segment 0.5% -0.4%
Total sales 4.0% 4.7%
• Australia -The segment shows positive sales for both Hl and YTD, however this growth is driven by the inclusion of the Bevilles brand in FY24 only. Sales performance in the core Michael Hill brand has improved marginally compared to the first half, but remains negative to last year. The Bevilles brand has also not met sales expectations and has been further impacted by the relocation announcement and systems integration process.
• New Zealand -The segment remains our most challenged with deeper macroeconomic pressures significantly impacting consumer behaviour and discretionary spend. The continued negative sales results are also driven by a decline in consumer credit approval rates across the country and an increase in serious retail crime events impacting a number of our stores.
• canada -This continues to be our best performing segment, broadly flat on a record prior year.
• Gross margin-In line with the first half, gross margin remains suppressed due to sustained higher input costs and record gold pricing. All markets continue to experience aggressive promotionally led retail trading conditions, which is also contributing to margin pressure.
• Earnings impact -Given the compressed sales and continued gross margin decline, previously reported first half earnings have been eroded by an EBIT loss of N$10m for FY24Q3.

[winner69]

They gave everybody hope when they said in Feb that first 7 weeks of second half sales were up 9.5% on pcp

Some 6 weeks on and things seem pretty dire and that 9.5% is no more

Shame they stopped quarterly reporting $ numbers …..we could see what +9.5% turned outubro be

[winner69]

Golden boy Rob Fyfe joined Board in 2014 ….some 10 years ago

MHJ revenues back then about $500m ….now about $680m … up about 35% in 10 years not too bad eh

NPAT back then was $25m … since then from 2015 NPAT has been 28m, 21m, 34m, 5m, 17m, 3m, 49m, 52m, 38m and this year maybe 10m at best . Somewhat ironic boom years were pandemic years 2021 and 2022

Otherwise you’d have to say that during the time that Rob has had a say in things profit trends have been nothing tonwrite home about ….or haven’t gone to what the hype over the years has suggested

Maybe Rob wasn’t the golden boy after all …. the Halo Effect is an interesting study

[Goob]

They need an economics lesson; always seem to bet on a quick flip in the economy towards recovery. Recessions don't last for one quarter... Done it again in this release.

Update:
"Positive sales momentum had been expected through the second half in line with anticipated improvements in consumer
sentiment and economic conditions. Unfortunately this has not materialised."

Outlook:
“There is no doubt that consumer discretionary spend, and the fine jewellery category in particular, remain under pressure
due to macroeconomic forces. Higher interest rates are leading to a sustained and prolonged decline in consumer spending.
Looking forward, as interest rates moderate, we anticipate sales and margin recovery.”

[Goob]

The AFR article 9 days ago was perhaps another warning sign:
"Michael Hill’s luxury play"

https://www.afr.com/work-and-careers/leaders/the-gap-below-cartier-and-tiffany-michael-hill-s-luxury-play-20240503-p5fosf

[Gerald]

The AFR article 9 days ago was perhaps another warning sign:
"Michael Hill’s luxury play"

https://www.afr.com/work-and-careers/leaders/the-gap-below-cartier-and-tiffany-michael-hill-s-luxury-play-20240503-p5fosf

“We are absolutely undervalued, the business is strong, while we’re in a challenging environment, the category is under a lot more pressure than we are."

Might be going to get a whole lot more undervalued.

[winner69]

The AFR article 9 days ago was perhaps another warning sign:
"Michael Hill’s luxury play"

https://www.afr.com/work-and-careers/leaders/the-gap-below-cartier-and-tiffany-michael-hill-s-luxury-play-20240503-p5fosf

That’s a very good article

Be interesting to monitor progress along this journey and look back at this in a few yesrs time.

Withholding due respect to Bracken I remain unconvinced that this will work out

[winner69]

“We are absolutely undervalued, the business is strong, while we’re in a challenging environment, the category is under a lot more pressure than we are."

Might be going to get a whole lot more undervalued.



Another quote ..from Michael

“A business normally has about 30, 40 years and then it’s finished. If you look through history at a lot of the names when I grew up, the department stores, they’ve all gone, finished. In any business, unless it’s a major brand, [this change] is probably the only way that it can last forever, so that’s the way to go.”

Big gamble ….wonder how big this market gap is …the space between the super rich and the not so rich

[Sideshow Bob]

https://www.nzx.com/announcements/431292

Michael Hill International Limited (ASX/NZX: MHJ) provides a trading update for the 45-week period ended 12 May 2024.

Positive sales momentum had been expected through the second half in line with anticipated improvements in consumersentiment and economic conditions. Unfortunately this has not materialised, with second half sales performance broadly inline with the first half, and margin still under pressure.

• Group Sales – For the first 45-weeks of FY24, Group sales (including Bevilles) were up 4.7% on LY, and the sales for thecore Michael Hill brand were still negative to LY.FY24H1to Wk26FY24YTDto Wk45Revenue for retail operations % Var to LY % Var to LYSegment figures in local currencyAustralia segment AUD 10.2% 12.3%New Zealand segment NZD -10.3% -11.1%Canada segment CAD 0.5% -0.4%Total sales AUD 4.0% 4.7%

• Australia – The segment shows positive sales for both H1 and YTD, however this growth is driven by the inclusion of theBevilles brand in FY24 only. Sales performance in the core Michael Hill brand has improved marginally compared to thefirst half, but remains negative to last year. The Bevilles brand has also not met sales expectations and has been furtherimpacted by the relocation announcement and systems integration process.

• New Zealand – The segment remains our most challenged with deeper macroeconomic pressures significantly impactingconsumer behaviour and discretionary spend. The continued negative sales results are also driven by a decline inconsumer credit approval rates across the country and an increase in serious retail crime events impacting a number ofour stores.• Canada – This continues to be our best performing segment, broadly flat on a record prior year.

• Gross margin – In line with the first half, gross margin remains suppressed due to sustained higher input costs and recordgold pricing. All markets continue to experience aggressive promotionally led retail trading conditions, which is alsocontributing to margin pressure

.• Earnings impact – Given the compressed sales and continued gross margin decline, previously reported first half earningshave been eroded by an EBIT loss of ~$10m for FY24Q3.As the business navigates the prolonged impact of cost-of-living pressures on consumer sentiment, management areactivating initiatives to stimulate sales and restore margin. There is also a heightened focus on managing operational costsand capital expenditure. Actions have been taken to reduce costs across the business including inventory, corporateoverheads, underperforming stores and further optimisation of store rostering.

Commenting on the result, Managing Director and CEO of Michael Hill International Limited, Daniel Bracken said:“There is no doubt that consumer discretionary spend, and the fine jewellery category in particular, remain under pressuredue to macroeconomic forces. Higher interest rates are leading to a sustained and prolonged decline in consumer spending.Looking forward, as interest rates moderate, we anticipate sales and margin recovery.”

[Waltzing]

MHJ ballroom silver cuff links still going well after 20 years... purchased in Auckland.

All depends then on the product and design team of the day... well.

"Big gamble ….wonder how big this market gap is …the space between the super rich and the not so rich"

probably bigger than one images as the trickle down does not go far...

Super rich always getting richer on expansion of money supply..

Just this is a contraction period... This will test there accounting department and the design and sales team.

Daniel must be getting a lesson in the basic of a recession and he bought some up above 66..

But remember the FED said temporary inflation.....

whose going to report a loss in retail next....

SHAREGUY has made some comments over on th other channel regarding Auckland economy.

[LaserEyeKiwi]

Oof - NZ/Aus High price discretionary item retail market being absolutely destroyed by those high mortgage rates now that essentially everyone has now had their mortgages roll over to 7%+ rates.

[Toddy]

Oof - NZ/Aus High price discretionary item retail market being absolutely destroyed by those high mortgage rates now that essentially everyone has now had their mortgages roll over to 7%+ rates.

Excellent news then. That's the entire point of higher interest rates.

[LaserEyeKiwi]

Excellent news then. That's the entire point of higher interest rates.

Decreasing the rate of inflation of course is the entire point of higher interest rates, not specifically crippling high price discretionary retail, which makes up a small part of the basket of goods and services that determine the inflation rate.

High interest rates actually currently pushing up prices of core essential items in the basket unfortunately, as the increased cost of capital is being passed through to consumers/businesses in the form of higher prices for many goods and services that are provided by entities with high debt loads.

[Rawz]

Keep hearing gold and silver this and that. Prices must be high. Cant be good for MHJ

[Toddy]

Keep hearing gold and silver this and that. Prices must be high. Cant be good for MHJ

At what gold price does the MHJ business model not work anymore.

Worth thinking and talking about. Because there has to be a price point where the average customer walks.

[percy]

At what gold price does the MHJ business model not work anymore.

Worth thinking and talking about. Because there has to be a price point where the average customer walks.

Going from their update it appears it has already gone over the price NZ customers will pay.
Appears they are walking to Lovisa stores.

PS.I note MHJ's share price has halved in the past year,while LOV's has more than doubled.

[LaserEyeKiwi]

They point out the price of gold being a factor in todays update, but lets be honest though that the margins MHJ has on their products would see gold as one of the smallest components of COGS.

[LaserEyeKiwi]

MHJ, like all jewelry store chains, are structurally very good when they can leverage their relatively fixed costs (Stores & Staff) to serve a high throughput of customers. The overhead involved in selling to 100 people a day per store is fairly similar to selling to 25 people a day. However there is a hard limit to cover those fixed costs that really starts to hurt once you drop below it.

[percy]

MHJ, like all jewelry store chains, are structurally very good when they can leverage their relatively fixed costs (Stores & Staff) to serve a high throughput of customers. The overhead involved in selling to 100 people a day per store is fairly similar to selling to 25 people a day. However there is a hard limit to cover those fixed costs that really starts to hurt once you drop below it.

And getting out of expensive leases is another issue.

[winner69]

LEK ....I assume you got rid of MHJ shares when they were buying them back in the in the 120/130s

You waiting to get back or is a case of never again

[LaserEyeKiwi]

LEK ....I assume you got rid of MHJ shares when they were buying them back in the in the 120/130s

You waiting to get back or is a case of never again

Had to check, was all the way back in Nov 2022 at $1.35.]

Haven't been following too closely since, but damn that price looking tasty if someone was looking for a long term return.