MHJ - Michael Hill International.

[winner69]

And when Winner is confused im concerned lol.

This comparable EBIT or underlying ebit is unaudited, pre-AASB16, pre-IFRIC SaaS-related adjustments, and with normalisations.
What's the normalisations I wonder?

Ah well. Top line will be 2% higher and bottom line will be 15.4% higher than last years $39m npat.

Based on bottom line being $45m ish.
This is calculated using $51m ebit (comparable) which is the mid point of todays guidance and then using last years NPAT/EBIT ratio of ~88%.
I.e. ebit $51m* 0.88= $44.88m npat

I reckon $51m ebit will end up as NPAT about $34m/$35m .... last year $39m

Need to take lease interest (I) and Tax (T) off the EBIT

[Halebop]

I think net positive for the future...

Being hurt by lockdowns this quarter seems apparent and aligned with some commentary that consumers are not bouncing back from lockdown to the same degree as previous.

Strategy of margin expansion appears to be working. This hurt MHJ when 1st applied, retail teams were used to discounting to get the sales and struggled with the change and management were sluggish getting this right but appear to now have this in hand.

Like for like sales appears to include like for like number of trading days - this is a reasonable approach for retail but has unexpected remifications on metrics in lockdown scenarios - i.e. higher like for like sales when sales are in fact down. I think the positive is less lockdown days will likely translate to sales growth at the higher margin so points to more profit growth.

Would like to see some capital management - MHJ are sitting on way too much capital, higher profits this quarter will have added to that cash pool and they need to do something with it. If caution is still de jour would at least like to see 100% dividends...

[winner69]

So Comaparable EBIT could be up $8.4m on last year to $53m

Assuming a 65.2% GM (up 2.5% points) then

Increased EBIT from selling more is $5.0m and the impact of the increased GM% is $8.1m = Gross Margin up $13.1m .... with expenses up $4.7m

Jeez that margin expansion big contributor eh -- worth $8m ..... and essentially accounts for all the increase

The real half year report will be interesting

[winner69]

the zillions of corporate welfare they received last year interesting .... but then again they don't seem to have had windfall sales after lock downs finished like many other retailers ..... result reported profit down maybe 10% plus

I wonder what actually is the real level of business going forward .... something to ponder over the weekend

[Rawz]

I reckon $51m ebit will end up as NPAT about $34m/$35m .... last year $39m

Need to take lease interest (I) and Tax (T) off the EBIT

But actual ebit is going to be ~$67m. So you would take the lease interest off that wouldnt you?
The $51m ebit is going on the old way of actual interest isnt it? Or do i have it backwards
$34m npat too low W69

I'm no accountant thou.. I think SB9 has the right outlook... numbers look good. Happy to hold for the dividend

[Muse]

the zillions of corporate welfare they received last year interesting .... but then again they don't seem to have had windfall sales after lock downs finished like many other retailers ..... result reported profit down maybe 10% plus

I wonder what actually is the real level of business going forward .... something to ponder over the weekend

aye. i don't begrudge any retailer (or anyone else) for keeping the wage subsidy when they were legally able to do so. The downside, however, it makes YOY comps harder, assessing what is maintable more difficult, and I dont think it fair to do a multiple on earnings keeping them, as its not a long term or high quality source of income (IE, it is worth the net of tax cash rec'd and nothing else). I dont know how much MHJ has rec'd - loads I suspect. HLG rec;d over 13 million in the 2 years to august 2021. I wish briscoes had kept theirs but handed it all back - the only upside is going forward they won't cycle off them. When doing a deep dive on the underlying economics of each business best to take the subsidy out, so as to see the true underlying profit and implied valuation metrics based on operating earnings. makes a pretty big impact

[Waltzing]

Canada is the icing layer on the xmas cake here and a special div surely.

Full 2021 audited financials provide interesting reading. Note: tax losses are being held for future use over 30 mill for US and a small amount for NZ.

Nice Vol day over 500,00 mostly retail in all prob.

[Rawz]

Canada is the icing layer on the xmas cake here and a special div surely.

Full 2021 audited financials provide interesting reading. Note: tax losses are being held for future use over 30 mill for US and a small amount for NZ.

Nice Vol day over 500,00 mostly retail in all prob.

Waltz, do you reckon another USA play is on the cards? Use up some of that $100m spending power they have? Maybe this time a slow expansion rather than buying a bankrupt chain of stores in the middle of a financial crisis..

Goodbye special div?

[Waltzing]

Discussed on Zoom this morning after Bike ride in the country side around Lake Karaipro...

The thoughts were expanding into US is unknown.

Maybe they will continue to expand in Canada and Rob F will be a very careful custodian of shareholder funds.

Special div more likely or increase in Div as EPS grows.

[winner69]

Good to see Canada sales getting back to pre-covid levels

Good or a worry -- most retailers seem to have a good couple of years with current sales level (annual basis) quite a way above pre-covid levels in spite of lockdowns etc ..... ie they've done well capturing the pent up demand plus.

Checking back Canada sales are much the same as they were at June 2018 .... and margins not much better ....and profit doesn't seem to have improved either

Hey rawz - whats going on with Canada, the icing on the Christmas cake

Suppose you'll tell me ....it's all about the future