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  1. #11
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    I call MHI fully priced at this point. I applied a 5.5% gross margin (avg of the last 2 yrs) to the FY sales figures, derived the eps based on 38.5M shares on issue then applied a fair if not slightly generous PE of 16 and $5.95ish pops out.

    Still a good share but there are better opportunities around for now.
    Prophet

  2. #12
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    Not disagreeing but interesting-if one applied the same PE of 16 to WHS its shareprice should be about $3.15.

    IMO WHS has a long way south to go yet.

  3. #13
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    Wouldn't disagree with that observation at all KJ although WHS has historically had a stronger PE than that. Still is it deserved now - possibly not. Is WHS headed south - probably yes.
    Prophet

  4. #14
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    Prophet

    So your eps calc is for the FY just completed? What about eps for the current FY? And what about next FY etc.? What chance of ongoing annual sales increases similar to this year, and profit increases?

    I'm happy with the way they are performing.

  5. #15
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    yes its fully valued now

  6. #16
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    Kiwi-I think you will find that the PE of 16 is based on forward NPAT of about $14m.
    Agree with you that long term this will be a very good hold.

  7. #17
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    Michael Hill reports strong sales as Canada looks 'promising'

    14.07.2004
    By IRENE CHAPPLE
    Jewellery retailer and stock market darling Michael Hill International revealed a jump in same-store sales yesterday but said nothing about plans pending its full-year profit announcement next month.

    Company secretary Wayne Butler took media calls in the absence of chief executive Mike P****ll and founder Michael Hill, both on holiday in Europe.

    The company's share price has rocketed up from around $5 at the beginning of the year to a high of $6 in April.

    Yesterday's announcement of a 7.2 per cent increase in same-store sales in the year to June 30 triggered a tiny increase in the share price, which soon settled down to close at $5.95.

    The 12-month sales figures broke down to show New Zealand had turned around its dismal first half while Australia continued to perform strongly.

    New Zealand produced $83 million same-store sales, 1.2 per cent up, while Australia offered $146 million in same-store sales, an increase of 11 per cent.

    Sales figures for all stores were $86.3 million and $167 million respectively.

    Butler said margins had remained steady. He said New Zealand's last three months had lifted same sales into the positive but there was room for the home market to improve.

    In Australia: "They just seem to have got things right."

    Canada, where the company set up shop in 2003 and is run by Hill's daughter Emma, produced $5.9 million in sales, an increase of 154 per cent over 12 months compared with the eight months the previous year.

    The expansion has been cautious, a strategy which won over Australia when Michael Hill crossed the Tasman in 1987.

    However, Butler conceded the Canadian arm looked "very promising".

    Butler said new advertising for the chain had been emotional rather than transactional and had pushed up sales.


    Fantasy Premier League 2006/07, 2007/08, and 2008/09 Champion :-)

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  8. #18
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    Is it wise to base your total assessment on one measure? Is this taking into account the trendline in terms of sales growth in Aust (11pct) and Canada (exponential)? Surely you need to look at the total picture, MHI has a very positive outlook, the question is whether that upside potential is factored into the price.

    WHS on the other hand has continuing downward pressure. It would be harder to get a more graphic portrayal of the companies' contrasting fortunes than in today's NZ Herald. MHI lauded for continuing growth, WHS trying to stave off the doomsayers over its Aust operations.

    One interesting thing in today's coverage, I had no idea Michael Hill's daughter was running the Canadian operation. Who said nepotism died with the Fletchers?
    Marriage isn't a word. It's a sentence

  9. #19
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    Placebo - you need to get up todate. MH himself very back seat these days developing his golf course etc. Family have been involved at high levels for a while.
    Fantasy Premier League 2006/07, 2007/08, and 2008/09 Champion :-)

    "The surest sign that intelligent life exists elsewhere in the universe is that none of it has tried to contact us." - C&H

  10. #20
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    KOO - Fully priced based on FY completed revenues was my only claim. Outlook going forward would appear to be positive. Just because its fully priced doesn't mean you should sell, rather don't expect the price to race away. If you actively managed your portfolio then you might take the opportunity to sell down part of your MHI holding temporarily and find an undervalued stock with prospects to keep your money working hard. But thats a personal decision.
    Prophet

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