MHJ - Michael Hill International.

[winner69]

About 120/130 a year or so ago ....all the way to 180 plus ....and now 120/130 again

Amazing

Hope some of you got the 50% gain and didn't see the market taketh it away

[DarkHorse]

I see Fisher Funds just bought 6.5 million shares.
I'd be interested to hear any of your views, low risk and good upside at current prices?

[percy]

Bling sells.
A few comparisons for you,between MHJ and LOV [asx].Both target different sectors of the market.
..........................MHJ..................... ........LOV.
Market cap. NZ $445.5mil...................AU $403.2 mil
PE ratio................21.5......................... ......17.4
Yield................NZ 4.52%........................AU 3.13%.
Market........medium price......................low price.
To get a better understanding of both, you need to find out the pay back period for new stores.LOV is about a year.I would expect MHJ is about 3 years.
The market.Maybe MHJ may face competition from on line sellers,while Lovisa's is teen spending,who want it now,and can afford to buy it now .
The set up cost of each LOV store is not a great deal,and they can operate from very small stores.The value of their stock holding per store would be a fraction of MHJ's.
MHJ have been very clever retailers,however I think LOV are smarter.

[stoploss]

Percy I think that Teen spending want it now and can afford it now ....it's going on a credit card !!! :)

[hardt]

Bling sells.
A few comparisons for you,between MHJ and LOV [asx].Both target different sectors of the market.
..........................MHJ..................... ........LOV.
Market cap. NZ $445.5mil...................AU $403.2 mil
PE ratio................21.5......................... ......17.4
Yield................NZ 4.52%........................AU 3.13%.
Market........medium price......................low price.
To get a better understanding of both, you need to find out the pay back period for new stores.LOV is about a year.I would expect MHJ is about 3 years.
The market.Maybe MHJ may face competition from on line sellers,while Lovisa's is teen spending,who want it now,and can afford to buy it now .
The set up cost of each LOV store is not a great deal,and they can operate from very small stores.The value of their stock holding per store would be a fraction of MHJ's.
MHJ have been very clever retailers,however I think LOV are smarter.

MHJ is likely to have underlying NPAT around $30m-36m in FY17 - at $1.15 = PE 12-14

With continued growth "EXPECTED" moving forward, It is not the worst idea to look this way.

It is creeping into buy territory for me personally, but not quite yet.

Brick and mortar is still the most effective way to sell mid-high ticket jewelry...

[percy]

Percy I think that Teen spending want it now and can afford it now ....it's going on a credit card !!! :)

Yes,but what I really meant was, they don't think twice about buying "bling" for $20 to $30,while they are not in the $300 plus "bling" market.

PS.Lovisa have a number of stores in NZ.Well worth a visit.

[percy]

As I have not followed MHJ for a good number of years I am finding looking at them again interesting.
I have been using www.4-traders.com to do some comparisons with Lovisa.At first look they both look to be buys.
..........................2017.................... ............2018.................................. .2019
LOV.eps ...............19.9............................... ..27.3 .................................30.1
........eps growth......................37.4%................. ...............10.2%
MHJ.eps.................9.02...................... ............10.2.................................. 11.4
........eps growth.......................13%.................. .................11.7%
LOV.pe..................18.6...................... .............13.6................................. ..12.3
MHJ.pe...................12.6..................... ..............11.1................................ ...9.93
LOV. roa.................68.5.......................... ..........57.2
MHJ.roa...................14.2.................... ...............14.5
Net margin.ie Net profit/revenue.
LOV........................15%.................... ..............13.8%
MHJ.........................5.60%................. ..............5.9%

[Brain]

I like my dividends to be imputed. I sold this share when that was no longer the case.

[winner69]

As I have not followed MHJ for a good number of years I am finding looking at them again interesting.
I have been using www.4-traders.com to do some comparisons with Lovisa.At first look they both look to be buys.
..........................2017.................... ............2018.................................. .2019
LOV.eps ...............19.9............................... ..27.3 .................................30.1
........eps growth......................37.4%................. ...............10.2%
MHJ.eps.................9.02...................... ............10.2.................................. 11.4
........eps growth.......................13%.................. .................11.7%
LOV.pe..................18.6...................... .............13.6................................. ..12.3
MHJ.pe...................12.6..................... ..............11.1................................ ...9.93
LOV. roa.................68.5.......................... ..........57.2
MHJ.roa...................14.2.................... ...............14.5
Net margin.ie Net profit/revenue.
LOV........................15%.................... ..............13.8%
MHJ.........................5.60%................. ..............5.9%

MHJ definitely worth a look at at current prices.

[percy]

MHJ definitely worth a look at at current prices.

My enthusiam for MHJ has waned.
10th April MHJ update.Same store sales up 0.8%.ie under 1% growth.
1st May LOV uodate.Same store sales up 10.9%..Now that is real growth.

[percy]

Well I have had fun watching the MPG thread over the past few days.Funny as a play,but even funnier was today's announcement from MHJ.....lol.

[winner69]

Well I have had fun watching the MPG thread over the past few days.Funny as a play,but even funnier was today's announcement from MHJ.....lol.

Up to $16,000 a month to give the CEO some hugs and cuddles ....for maybe 2 years

THst'll last foir 2 years for sure

What's $16,000 times 24 ?

Maybe MPG should get him on board as well to do the same for Nigel

[percy]

Up to $16,000 a month to give the CEO some hugs and cuddles ....for maybe 2 years

THst'll last foir 2 years for sure

What's $16,000 times 24 ?

Maybe MPG should get him on board as well to do the same for Nigel
I dare not comment,as I would find myself up for liable.

[winner69]

Well I have had fun watching the MPG thread over the past few days.Funny as a play,but even funnier was today's announcement from MHJ.....lol.

Mind you the new CEO needs all the help he can get .......after all he is (was) an accountant eh

Not the best background to run a consumer fashion business - bit dour and set in their thinking

[percy]

Well Mark Waller at Ebbos admitted to being an accountant,nothing dour about him.
So in any industry there is diversity.

[winner69]

Well Mark Waller at Ebbos admitted to being an accountant,nothing dour about him.
So in any industry there is diversity.

Beagle says he's an accountant

[janner]

On the MHI thread perc.. !!! I think you are really a Peter's man at heart.

I think you LOV those baubles also... :-)))))

[percy]

On the MHI thread perc.. !!! I think you are really a Peter's man at heart.

I think you LOV those baubles also... :-)))))

Yes he certainly cleaned up the share market for investors with his "the wine box".
Enjoy the discounts I get with my "Gold Card" too.
And yes I love my LOV.

[winner69]

Shame global domination didn't work out

So come home and consolidate in these parts of the world

https://stocknessmonster.com/announcements/mhj.nzx-313377/

[blackcap]

Shame global domination didn't work out

So come home and consolidate in these parts of the world

https://stocknessmonster.com/announcements/mhj.nzx-313377/

Only US exit Winner, where they only have about 8 or 9 stores anyway. Canada is growing 20% YOY and going gang busters and NZ and Australia holding their own. Still some room to move for this stock I think.

[peat]

Shame global domination didn't work out


Yes it goes to show what a difficult market the USA is as we all know MHJ is a fierce business competitor
I wont conflate this with the retirement of Michael himself.

[winner69]

Market doesn’t seem to like recent announcements. Reading between the lines even normal trading hasn’t been to brilliant either

All that and a bad market not good as share price sinks below 120

[hardt]

Market doesn’t seem to like recent announcements. Reading between the lines even normal trading hasn’t been to brilliant either

All that and a bad market not good as share price sinks below 120

From 144 back down to 118 due to one off costs impacting a single year of reporting while the group itself is moving steadily... exacerbated by the selloff one could see the ~20% dive a big fat overreaction.

The market really enjoyed the solid results they posted earlier this year... this is including the $12m EBIT loss courtesy of the US operations which they are looking at either cutting out or downsizing.

At the end of the day the bottom line will benefit greatly.

[upside_umop]

I always liked MHI as a scaleable business model but was surprised they didn't do things differently with the US and Emma & Roe (and exit the US earlier):
- US : They spread themselves too thin for effective marketing. Why didn't they concentrate on one state, and once that model was refined, roll it out across the rest of the states?
- E&R : This has been unprofitable from the beginning and even on contribution margin level. Why would you roll-out hoping for scaleability? Poor performance IMO.

The recent announcement shows that on a normalised basis (excluding the anticipated $20m restructuring hit), EBIT will be down c. $5m year on year. No explanation was given which gives a lot of uncertainty?

The other challenge for me, and a key indicator if MHI can survive the retail model is if they can obtain same store sales increasing at least at the rate of CPI. It's one of their KPI's in their annual report and they didn't meet this or give any reason to believe they are even looking at this.

Disc: Don't hold.

[hardt]

The recent announcement shows that on a normalised basis (excluding the anticipated $20m restructuring hit), EBIT will be down c. $5m year on year. No explanation was given which gives a lot of uncertainty?



As they said, increased losses from their US operations.


"The key contributing factors were the deterioration in the performance of the US

and Emma & Roe businesses, which underpinned the Company’s strategic actions recently announced"


Theoretically by disregarding the fat losses from the US business ( which hopefully wont be there next year ) from this half you would be seeing a sizeable increase in earnings.

[upside_umop]

As they said, increased losses from their US operations.


"The key contributing factors were the deterioration in the performance of the US

and Emma & Roe businesses, which underpinned the Company’s strategic actions recently announced"


Theoretically by disregarding the fat losses from the US business ( which hopefully wont be there next year ) from this half you would be seeing a sizeable increase in earnings.

Apologies, I only glanced the announcement. It still implies the rest of the business is not performing as strongly by saying "contributing factors"?

Agree though, I think this is a good move. Earnings will increase significantly and they can cut this loose - an expensive lesson!

One of my other concerns is with E&R - will they successfully rebrand or will this end up costing and be a drag on earnings....

[Balance]

From 144 back down to 118 due to one off costs impacting a single year of reporting while the group itself is moving steadily... exacerbated by the selloff one could see the ~20% dive a big fat overreaction.

The market really enjoyed the solid results they posted earlier this year... this is including the $12m EBIT loss courtesy of the US operations which they are looking at either cutting out or downsizing.

At the end of the day the bottom line will benefit greatly.

The fallacy with that of course is that write-offs or downsizing have real bottom line impacts - the non-performing assets and businesses are gone but the debts remain, and the debts have to be serviced by the good operations.

[hardt]

The fallacy with that of course is that write-offs or downsizing have real bottom line impacts - the non-performing assets and businesses are gone but the debts remain, and the debts have to be serviced by the good operations.

As well as propping up the loss making US operations, the good operations were already servicing the groups debts ( roughly $40m of debt )

US contributed a lovely -13M to EBIT last year and by the sound of things these losses are growing... therefore one can comfortably assume cutting this huge loss maker will positively impact earnings.

Disc: I do not hold, but at this price I am thinking of jumping in.

[winner69]

As well as propping up the loss making US operations, the good operations were already servicing the groups debts ( roughly $40m of debt )

US contributed a lovely -13M to EBIT last year and by the sound of things these losses are growing... therefore one can comfortably assume cutting this huge loss maker will positively impact earnings.

Disc: I do not hold, but at this price I am thinking of jumping in.

All makes sense hardt

But the majority of the US losses came from E&R. MH ebit -$3.8m and E&R ebit -$6.9m

The US bit will go but how much of a drag will E&R continue to be even if losses might reduce or turn into profit. Big gamble I reckon even though demi-fine stuff might be the trick

Wonder if Rob Fyfe’s 16 grand a month support is paying dividends?

[blackcap]

I guess they are saying... stick to the knitting!!

[winner69]

So Emma and Roe a goner ..totally

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/319796/281504.pdf

[percy]

So Emma and Roe a goner ..totally

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/319796/281504.pdf

Be expensive terminating Mall tenancies.

[blackcap]

Be expensive terminating Mall tenancies.

Better than continuing with loss making venture though. Long term, a good thing for MHI I feel. Short term, yes some pain.

[Filthy]

Be expensive terminating Mall tenancies.

the spaces wont be huge & should just be able to sub-lease - (maybe to LOV lol)

[percy]

Better than continuing with loss making venture though. Long term, a good thing for MHI I feel. Short term, yes some pain.

Agreed.
I remember the share price took off when they exited shoe retailing.
Are their NZ divies imputated.?

[Filthy]

Agreed.
I remember the share price took off when they exited shoe retailing.
Are their NZ divies imputated.?

nope. 5 cents a year. no supp or imp.
not growing either - which is your number 1 rule mate! ;)

[blackcap]

Agreed.
I remember the share price took off when they exited shoe retailing.
Are their NZ divies imputated.?

Yes the divs are imputed. Just check to see if fully. Lets see the NZD amount received on one of my entities was $136.59 and the NZ imputation credit was $53.12. That means a grossed up div of $189.71.
$53.12/$189.71 is 28% so yes fully imputed. 5 cents per annum normally.

[Filthy]

Yes the divs are imputed. Just check to see if fully. Lets see the NZD amount received on one of my entities was $136.59 and the NZ imputation credit was $53.12. That means a grossed up div of $189.71.
$53.12/$189.71 is 28% so yes fully imputed. 5 cents per annum normally.

thats not what NZX have listed?

9759

[blackcap]

thats not what NZX have listed?

9759

I'm not sure what you are looking at, but I am looking at my dividend statement. I know which one I would trust more :)


http://investor.michaelhill.com/static-files/97f78116-fe10-49b6-8512-d45a1725d667

page 23 of 2017 annual report...

"Since year end, the Directors have
declared the payment of a final dividend
of au2.5¢ per fully paid ordinary share*
(2016 - au2.5¢). The final dividend will
be unfranked for Australian shareholders
and fully imputed for New Zealand
shareholders. "

[Filthy]

I'm not sure what you are looking at, but I am looking at my dividend statement. I know which one I would trust more :)

oh im not doubting you mate! lol - just odd how NZX seem to not account for it on their MH divi page. how is a non-holder meant to know otherwise? :/ must need updating.

[blackcap]

oh im not doubting you mate! lol - just odd how NZX seem to not account for it on their MH divi page. how is a non-holder meant to know otherwise? :/ must need updating.

Yeah nah no worries, did not doubt you either, just be wary about the NZX, they are pretty much useless for info I have found. Or at least you need to double check them. Understand your predicament, you would think you could at least trust the NZX.

[percy]

I know to check with the experts here on Sharetrader.
Thanks for your replies.

[Joshuatree]

I hope the NZX are reading this. You'd think precision and accuracy would be their maxim 100%!! .Becoming a laughing stock. Resting on their laurels due to their 20 min delay advantage, turning into yet another fake news story provider?!!!

[James108]

I see MHJ as undervalued at the moment and have been purchasing. Have also owned Briscoes and HLG for a few years now.

Exiting loss making divisions will improve bottom line in the short-medium term. Growth opportunities from Canada (bigger market than AUS) is proven. Less risk of disruption than Briscoes imo and more reliable growth than all other retailers in NZ (maybe excluding KMD? don't really follow that one). I am a bit curious why they need a Chief Person Officer as well as an HR senior exec. Chief person office sounds like a redundant position if HR is doing their job and probably on a fat wicket. Would be interested to see their responsibilities.

I have confirmed with Michael Hill that their dividends are fully imputed as per their reports (have yet to recieve one). He advised he would let NZX know that their dividends have been fully imputed since the IRD matter was resolved. Obviously has not happened yet. Also dividends are in AUD which is another little bonus.

[McGinty]

A couple members of the NZX use to read ST, but unsure if they still do (not in their job description).

I've dug into the MHJ Dividend announcement and found all the info needed on the last page. What has happened (from how I understand it) is that the NZX has only inserted the foreign div amount and no franking credits (yellow highlighted) into their system and missed the note in 5.1 about the NZ imputation credits.

Looking at ANZ who is another ASX primary listed company (which pay their dividends in AUD and have imputation credits for NZ investors in NZD), the NZX has entered both the AUD dividend and the NZD imputation credits into their system.

Entering Dividends use to be a 3 check process (3 different people), but it seems that the NZX has dropped the ball on MHJ.

[limmy]

I sold all my MHJ shares about 2 years ago, and from recollection then, their divvies in the NZX have never been imputed. Just the ASX perhaps, which was one of my reasons for selling back then.

[blackcap]

I sold all my MHJ shares about 2 years ago, and from recollection then, their divvies in the NZX have never been imputed. Just the ASX perhaps, which was one of my reasons for selling back then.

The ones on the NZX weren't imputed then, but they are now!

[limmy]

The ones on the NZX weren't imputed then, but they are now!Oh I see, perhaps I should be reinvesting in them. I've always like MHI and subsequently MHJ, and I've enjoyed good divvies and capital gain over the years from 2003 till 2016. Not to mention a 10 for 1 share split in 2007.

[percy]

Same store sales + 0.4%.
Online sales 1.9% of total sales.
A lot of work to be done .

[MauroNZ]

Same store sales + 0.4%.
Online sales 1.9% of total sales.
A lot of work to be done .

What do you think of the last result?

http://www.sharechat.co.nz/article/145a85e9/michael-hill-profit-sinks-86-on-us-exit-emma-roe-closure-costs.html

[percy]

What do you think of the last result?

http://www.sharechat.co.nz/article/145a85e9/michael-hill-profit-sinks-86-on-us-exit-emma-roe-closure-costs.html

The fizz has gone out of the bottle.
Trying to get it back into the bottle may prove hard and costly.
Online sales will possibly work,but they are now years behind their competition,and starting from a very low base.
Maybe unfair, but they look to be a "turn around" business.
Turn arounds usually take longer and cost more than originally thought.Often they do not work.
We must remember management have made a few bad costly calls,so why should they get it right this time.?
So it could work,but their only real growth is coming from Canada.
Their success or failure will come from their largest make,Australia.At present time they are struggling there.

[James108]

I hardly think they are a "turn around" case. Their continuing operations are very successful and they have proved up their growth in Canada, which is a larger market than Aus - although they do not seem to be targeting all of it at the moment. I see the shares as good value with one caveat below.

What concerns me is the unexplained $10m increase in corporate costs, I could understand this being temporary due to the relatively large change that has been undertaken this year - However if overheads have permanently increased by $10m it would be a bit concerning. Hopefully some 'colour' is provided around this in the conference call.

[winner69]

I hardly think they are a "turn around" case. Their continuing operations are very successful and they have proved up their growth in Canada, which is a larger market than Aus - although they do not seem to be targeting all of it at the moment. I see the shares as good value with one caveat below.

What concerns me is the unexplained $10m increase in corporate costs, I could understand this being temporary due to the relatively large change that has been undertaken this year - However if overheads have permanently increased by $10m it would be a bit concerning. Hopefully some 'colour' is provided around this in the conference call.

Possibly large amounts spent on that strategy to reposition themselves from a traditional retailer to a differentiated omnichannel brand

Strategic initiatives mirror The Warehouse .....MHJ and Warehouse execs and advisors must have gone to sale management school

Pretty week plan on paper .....all depends on execution eh ...but putting on a few more expensive managers to help them do this

Does Rob Fyfe still ‘mentor’ the newish CEO?

Will be leaving NHJ on the watch list ...but my love of retail will see me watching developments closely

[MauroNZ]

Possibly large amounts spent on that strategy to reposition themselves from a traditional retailer to a differentiated omnichannel brand

Strategic initiatives mirror The Warehouse .....MHJ and Warehouse execs and advisors must have gone to sale management school

Pretty week plan on paper .....all depends on execution eh ...but putting on a few more expensive managers to help them do this

Does Rob Fyfe still ‘mentor’ the newish CEO?

Will be leaving NHJ on the watch list ...but my love of retail will see me watching developments closely

MHJ and WHS are my two retail holdings, I was wrongly thinking that MHJ wouldn't go the same path. I think I will give 6 months and see.

[percy]

MHJ and WHS are my two retail holdings, I was wrongly thinking that MHJ wouldn't go the same path. I think I will give 6 months and see.

Oh dear...……………………………………………...

[Patient Panda]

MHJ and WHS are my two retail holdings, I was wrongly thinking that MHJ wouldn't go the same path. I think I will give 6 months and see.


In those two cases I would be more concerned about the return of your money than the return on your money. Especially with WHS I would be running as fast as I could and looking for greener pastures.

[MauroNZ]

In those two cases I would be more concerned about the return of your money than the return on your money. Especially with WHS I would be running as fast as I could and looking for greener pastures.

Thanks Panda, that is on my thoughts however I couldn't decide what to buy yet.

[winner69]

Share price below a buck and sinking to multi year lows

Punters not like the story or something

The story must have pretty good when punters drove the share price up to 170 plus - might be half price soon

[Baa_Baa]

Share price below a buck and sinking to multi year lows

Punters not like the story or something

The story must have pretty good when punters drove the share price up to 170 plus - might be half price soon

We failed our investors in getting into the USA and are pulling out, so your investment is fecked and we'll get back to you on what's next on the growth agenda, meantime suck it up.

Half price would be a good outcome. It'll probably be much worse than that when investors come to terms with the enormity of throwing in the towel on the US market.

[James108]

Really? I invested only after they announced they were pulling out of US and closing Emma and Roe. They can't hemorrhage money forever trying to get into US.

I think investors are unhappy about the large increase in corporate costs despite the decrease scope of the business. If I was aware that would be occurring I wouldn't have invested until SP was closer to current levels.

However, they have a solid core business which seems to be trading at good value currently, I hope price drops a bit further.

[blackcap]

Really? I invested only after they announced they were pulling out of US and closing Emma and Roe. They can't hemorrhage money forever trying to get into US.

I think investors are unhappy about the large increase in corporate costs despite the decrease scope of the business. If I was aware that would be occurring I wouldn't have invested until SP was closer to current levels.

However, they have a solid core business which seems to be trading at good value currently, I hope price drops a bit further.

That is my take on it too. Great decision to withdraw from the US. Can now use resources to focus on Canada and NZ/AUS. Plenty of growth to come from Canada, but even if no growth, can now go and make a good 10 CEPS plus with all the savings from not losing money hand over fist in the US and with Emma Roe.

[limmy]

Sold all my MHJ shares at $1.30 when they moved everything to Aus about 2 years ago, including their main listing in the ASX. This turned out to be a fortunate decision for me as their shares haven't done well since. I must admit that I've had MHI shares since 2003 and they had been a very good investment, especially when my (at the time) 2000 shares became 20,000 shares after a 10 for 1 share split, and the share price started rising again eventually.

[MauroNZ]

Really? I invested only after they announced they were pulling out of US and closing Emma and Roe. They can't hemorrhage money forever trying to get into US.

I think investors are unhappy about the large increase in corporate costs despite the decrease scope of the business. If I was aware that would be occurring I wouldn't have invested until SP was closer to current levels.

However, they have a solid core business which seems to be trading at good value currently, I hope price drops a bit further.


I'm more in line with this, do you have any report other than Craigs? I have Craigs but they don't research it.

[Beagle]

TA review makes a compelling case to keep your powder dry. Just plain ugly with no sparkle to be seen.

For me the move to house branded watches is a very big mistake. I have no idea where their MH watch is made, the quality, accuracy or durability of the inner workings the case or the strap.

https://www.michaelhill.co.nz/watches/ceramic-watches?fdid=article Not a single other brand to choose from other than the house brand. Someone forgot to tell Michael Hill that the customer is always right and that customers like choice !

I want to buy a brand I know and trust is super accurate and durable and for me that's Seiko. I wouldn't pay $100 for a Michael Hill watch they typically wanted $700 for when I looked a while back. The fact that my local Michael Hill store will not stock well known trusted brands of watches undermines their total store offering and I don't know if I could trust any of their other products, especially house branded ones. For me, they have shot themselves in the foot. This sort of house brand strategy is designed to give them extra margin and was a roaring success for Dick Smith wasn't it ! I don't believe in their stores or their product strategy so wouldn't own their shares either. (my 2 cents)

[MauroNZ]

TA review makes a compelling case to keep your powder dry. Just plain ugly with no sparkle to be seen.

For me the move to house branded watches is a very big mistake. I have no idea where their MH watch is made, the quality, accuracy or durability of the inner workings the case or the strap.

https://www.michaelhill.co.nz/watches/ceramic-watches?fdid=article Not a single other brand to choose from other than the house brand. Someone forgot to tell Michael Hill that the customer is always right and that customers like choice !

I want to buy a brand I know and trust is super accurate and durable and for me that's Seiko. I wouldn't pay $100 for a Michael Hill watch they typically wanted $700 for when I looked a while back. The fact that my local Michael Hill store will not stock well known trusted brands of watches undermines their total store offering and I don't know if I could trust any of their other products, especially house branded ones. For me, they have shot themselves in the foot. This sort of house brand strategy is designed to give them extra margin and was a roaring success for Dick Smith wasn't it ! I don't believe in their stores or their product strategy so wouldn't own their shares either. (my 2 cents)

If I remember well seeing in the Porirua store the label said made in China, I'm open to be wrong.

[Beagle]

If I remember well seeing in the Porirua store the label said made in China, I'm open to be wrong.

I think you're probably right going off vague memory. My last gold Seiko watch looked very stylish, kept perfect time and provided excellent durable timekeeping for 25 years so they had no chance of selling me a house brand lol. I remember being very surprised that they don't sell any of the big name brands.
I thought what a joke and went to a proper Jewelry store https://www.stewartdawsons.co.nz/watches

[percy]

Does anyone on Sharetrader know anyone who shops at Michael Hill.?

[winner69]

Does anyone on Sharetrader know anyone who shops at Michael Hill.?


Not me .....

[James108]

Does anyone on Sharetrader know anyone who shops at Michael Hill.?

I have heard of 2 items from two different people being bought at Michael hill in last 6 months. Total value in excess of $1k. Not really a place people shop regularly I wouldn’t think.

In my view their stores look the best compared to other offerings in malls. As far as quality goes I can’t comment. But I’m a bloke a diamond ring is a diamond ring to me.

[percy]

I have heard of 2 items from two different people being bought at Michael hill in last 6 months. Total value in excess of $1k. Not really a place people shop regularly I wouldn’t think.

In my view their stores look the best compared to other offerings in malls. As far as quality goes I can’t comment. But I’m a bloke a diamond ring is a diamond ring to me.

At Westfield Riccarton ChCh there is a Michael Hill store, where I have never seen any body buying.
In the same Mall there is a Lovisa store that is always flat out.
One has expensive junk,while the other sells cheap junk.

[winner69]

At Westfield Riccarton ChCh there is a Michael Hill store, where I have never seen any body buying.
In the same Mall there is a Lovisa store that is always flat out.
One has expensive junk,while the over sells cheap junk.

Same in JMall — staff always polishing the glass counters and trying to look excited

[limmy]

I have bought from MHI before it became MHJ

[Beagle]

At Westfield Riccarton ChCh there is a Michael Hill store, where I have never seen any body buying.
In the same Mall there is a Lovisa store that is always flat out.
One has expensive junk,while the over sells cheap junk.

LOL I'd say that hits the nail directly on the head. If one brings up their respective SP graphs its pretty easy to tell which strategy is working the best !

[MauroNZ]

Does anyone on Sharetrader know anyone who shops at Michael Hill.?

I usually shop for women stuff.

[MauroNZ]

LOL I'd say that hits the nail directly on the head. If one brings up their respective SP graphs its pretty easy to tell which strategy is working the best !

Lovisa in Lambton Quay in Wellington is usually busy. Thanks Percy as I know Lovisa because of you I haven't done yet any research.

[Beagle]

Lovisa in Lambton Quay in Wellington is usually busy. Thanks Percy as I know Lovisa because of you I haven't done yet any research.

Yeap, our local mall has a LOV shop and a MHI shop not far from each other and there's no prizes for guessing which one is way busier than the other.
As KW once told me the stuff you buy from LOV only lasts one or two wears but its so cheap it doesn't matter...Michael Hill watches probably have the same durability lol

[Filthy]

Does anyone on Sharetrader know anyone who shops at Michael Hill.?

my other half refuses to step foot in the place Percy and I very much value her opinion as to what is trendy and what is not (I am clueless)
LOV is very much 'in' for the cheap stuff, and Tiffany&Co (or a local custom jewellers i.e. Village Goldsmith) is very much 'in' for the expensive stuff.
perhaps MHJ is neither one thing, nor the other?
fwiw, I know a lot of people (Gen X) who have shopped online for engagement & wedding rings etc.
Choose your design, choose your diamond. individually made to order. collect and collect. all for 30% cheaper than a high-street retailer and with 'cooler' branding. also means stock count is not huge. There were a lot of companies in London offering this service with just a front end show-room located in the west-end or hatton garden where you could go for consultation & assistance. everything was reviews-based, with companies only being as good as their customer ratings. assuming the NZ/AUS market lags the UK, perhaps it is a sign of things to come?

[winner69]

my other half refuses to step foot in the place Percy and I very much value her opinion as to what is trendy and what is not (I am clueless)
LOV is very much 'in' for the cheap stuff, and Tiffany&Co (or a local custom jewelers i.e. Village Goldsmith) is very much 'in' for the expensive stuff.
perhaps MHJ is neither one thing, nor the other?
fwiw, I know a lot of people (Gen X) who have shopped online for engagement & wedding rings etc.
Choose your design, choose your diamond. individually made to order. collect and collect. all for 30% cheaper than a high-street retailer and with 'cooler' branding. also means stock count is not huge. There were a lot of companies in London offering this service with just a front end show-room located in the west-end or hatton garden where you could go for consultation & assistance. everything was reviews-based, with companies only being as good as their customer ratings. assuming the NZ/AUS market lags the UK, perhaps it is a sign of things to come?

That Village Goldsmith you mention is cool as

Has your other half tried Berry’s which is nearby

[percy]

Yes I would think quality jewellers with a good reputation will do well on line.
Cheap end of the market is more impulse buying,what I call the Mars Bar,cake of chocolate,lotto ticket etc where LOV will continue to do well.

ps I sold my LOV shares .sp is currently a bit high for me to consider buying them again.
MHI will have to show real growth not only in Canada,but Aussie and NZ too before I would look at them.

[Filthy]

Has your other half tried Berry’s which is nearby

cheers w69. don't think so yet (probably a good thing for me tho eh!), but I'll ask her tonight.

[peat]

Does anyone on Sharetrader know anyone who shops at Michael Hill.?

I have a silly amount of softness for Michael Hill because he helped me buy my first house.
Back early in the life of peat I didn't have enough for a house deposit so I did what Mary Holm would never do - I put what I had into Michael Hill Shares, and it quickly made me enough to top up the deposit. Of course that was ages ago and was a punt which went well and that's possibly why I have brand loyalty.

The thing is though, this company is not run by the man himself these days so its very hard to have the faith.

To answer your question yes occasionally we shop at Michael Hill for a trinket of sorts, but only once or twice a year.
But I wouldn't invest at the moment. Unlikely to show strong growth anymore.

[winner69]

ps I sold my LOV shares .sp is currently a bit high for me to consider buying them again.
MHI will have to show real growth not only in Canada,but Aussie and NZ too before I would look at them.

I think you’d be waiting a long time to see some real growth in NZ and Australia.

In spite of their efforts sales in both countries have only grown at 2.4% pa over the last 5 years (local currency)

Australia must be a worry because store numbers have gone from 162 to 171 in that time. At least modest NZ growth has been achieved with no increased store numbers.

Interesting they sell more per store in NZ than they do in Australia ....don’t know what this means except maybe highlights how hard Aussie retailing is.

MHJ a Canada story if you want to get rich .....and for somebody down this part of the world that makes it a risky type of investment.

[percy]

Just did not want to dash any of the "true believers" hopes.
I agree with you ,NZ and Aussie per store growth will not happen.

[winner69]

Just did not want to dash any of the "true believers" hopes.
I agree with you ,NZ and Aussie per store growth will not happen.

I think the ‘true believers’ are really hoping like hell that Canada takes off big time and that NZ and Australia don’t go backwards

[MauroNZ]

Yes I would think quality jewellers with a good reputation will do well on line.
Cheap end of the market is more impulse buying,what I call the Mars Bar,cake of chocolate,lotto ticket etc where LOV will continue to do well.

ps I sold my LOV shares .sp is currently a bit high for me to consider buying them again.
MHI will have to show real growth not only in Canada,but Aussie and NZ too before I would look at them.

Do you still hold MHJ? Without going much in detail I agree that LOV seems expensive and that is why I didn't have a detailed look.

[MauroNZ]

I have a silly amount of softness for Michael Hill because he helped me buy my first house.
Back early in the life of peat I didn't have enough for a house deposit so I did what Mary Holm would never do - I put what I had into Michael Hill Shares, and it quickly made me enough to top up the deposit. Of course that was ages ago and was a punt which went well and that's possibly why I have brand loyalty.

The thing is though, this company is not run by the man himself these days so its very hard to have the faith.

To answer your question yes occasionally we shop at Michael Hill for a trinket of sorts, but only once or twice a year.
But I wouldn't invest at the moment. Unlikely to show strong growth anymore.

Nice story and sometimes I feel a good company can be helpful as it was in your case.
Unfortunately I can't see any getting better in the short term and I feel that I might be missing another chance out there but I also couldn't decide yet where to go.

[MauroNZ]

I think you’d be waiting a long time to see some real growth in NZ and Australia.

In spite of their efforts sales in both countries have only grown at 2.4% pa over the last 5 years (local currency)

Australia must be a worry because store numbers have gone from 162 to 171 in that time. At least modest NZ growth has been achieved with no increased store numbers.

Interesting they sell more per store in NZ than they do in Australia ....don’t know what this means except maybe highlights how hard Aussie retailing is.

MHJ a Canada story if you want to get rich .....and for somebody down this part of the world that makes it a risky type of investment.

That has been my concern in the last year or so but then given almost any good company is priced today I struggle to think of an option.

[BeeBop]

[QUOTE=peat;727969]I have a silly amount of softness for Michael Hill because he helped me buy my first house.
Back early in the life of peat I didn't have enough for a house deposit so I did what Mary Holm would never do - I put what I had into Michael Hill Shares, and it quickly made me enough to top up the deposit. Of course that was ages ago and was a punt which went well and that's possibly why I have brand loyalty.
/QUOTE]

Snap - me too....he made a big impact on my personal home mortgage those years ago....I am looking at them again as my initial numbers on a $1 share price are good. But will wait a bit....I got out well before their US journey. NZ companies often fail in expansions (Pumpkin Patch) as they don't hold a strong central control.

[Beagle]

I have a silly amount of softness for Michael Hill because he helped me buy my first house.
Back early in the life of peat I didn't have enough for a house deposit so I did what Mary Holm would never do - I put what I had into Michael Hill Shares, and it quickly made me enough to top up the deposit. Of course that was ages ago and was a punt which went well and that's possibly why I have brand loyalty.

The thing is though, this company is not run by the man himself these days so its very hard to have the faith.

To answer your question yes occasionally we shop at Michael Hill for a trinket of sorts, but only once or twice a year.
But I wouldn't invest at the moment. Unlikely to show strong growth anymore.

Yes that is an emotional attachment that I can understand why one would hold as an enduring memory however I couldn't help having a bit of another chuckle on the flight back from Queenstown the other evening reading the inflight magazine advertisement about Seiko watches made since 1881....the breathtaking arrogance of the man putting his name on all watches, making them in China and trying to put them out there as quality.

What would Seiko making watches since 1881, Tag Heuer since 1860 or Omega since 1848 know about watch making right ?...lol Not one of them are any good so lets not stock them because we as the owners know better....or is it just plain corporate greed and the margins are much bigger by a factor of perhaps as much as ten so it doesn't matter if most people simply walk out in disgust...as long as there's enough stupid one's to buy our complete rubbish pitched at premium prices who cares right ?

The whole house brand thing and hoping people are silly enough to buy only a house brand has proven itself to be a flawed concept, Dick Smith a classic example.
Imagine going to your local supermarket and all their was in the whole store was various food items all with the same house brand label and all made in China...yes the concept really is that flawed.

But what would I know...if you sell just a moderate number of watches for $700 that perhaps cost just $10 to make in China there's a buck to be made and who cares about ethics and customers right to chose anyway...

[winner69]

CEOs don’t come cheap ....for MHJ probably $2m plus

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/324204/287153.pdf

[blackcap]

Wow some really sh it numbers that they put out after market on a Friday. Wonder what the price will be on Monday....

https://www.asx.com.au/asxpdf/20181012/pdf/43z6q4q3kryhpb.pdf

[percy]

Wow some really sh it numbers that they put out after market on a Friday. Wonder what the price will be on Monday....

https://www.asx.com.au/asxpdf/20181012/pdf/43z6q4q3kryhpb.pdf
Just when you thought things could not get worse for Michael Hill,they just did.

[winner69]

Wow some really sh it numbers that they put out after market on a Friday. Wonder what the price will be on Monday....

https://www.asx.com.au/asxpdf/20181012/pdf/43z6q4q3kryhpb.pdf

Double digit decline in same stores sales some effort

Seems unless they discount/have sales they are dead in the water ......is market saying the product not really that special?

[James108]

Seems like they shot themselves in the foot big time. Hopefully they fix this, sold half my holding this morning.

[winner69]

Seems like they shot themselves in the foot big time. Hopefully they fix this, sold half my holding this morning.

Hard to fix when you try to turn a slow moving train wreck around

I blame Rob Fyfe influence

[James108]

I don't buy that michael hill are a slow moving train wreck. Seems like they had 1 average to poor year in their core NZ/AUS/CAN operations now they are changing strategy.

I imagine they want to be more like Tiffany and Co. i.e. premium/desirable brand, no need to discount. I read tiffany and co suprisingly have a lower gross margin (havent looked at their statements myself) but much higher revenue/store (their assets and fixed costs work MUCH harder, they have only 1 busy store in Auckland). Unfortunately Michael Hill have 30 years of being a middle of the road brand and you are right, you cannot turn that around easily. I feel their stores look better than competition in malls (but hey, I'm no female and definitely no expert), so maybe they can do it. I am not holding my breath which is why I sold half this morning.

[winner69]

.....

Unfortunately Michael Hill have 30 years of being a middle of the road brand and you are right, you cannot turn that around easily....


That’s the big problem for them .....esp the 30 years bit

Consumers will see through the changes they are making and vote with their wallet

[whatsup]

PE still pretty HIGH @ 57 which indicated growth premium so with todays sobering sales ann where will they come from, imho PE for a retail share in this environment should be in the mid 20's , so what would that indicate as a share price for MHJ ?

[James108]

PE still pretty HIGH @ 57 which indicated growth premium so with todays sobering sales ann where will they come from, imho PE for a retail share in this environment should be in the mid 20's , so what would that indicate as a share price for MHJ ?

The p/e on continuing operations was closer to 10. Who knows what it is now, could be negative if they keep this up.

[winner69]

The p/e on continuing operations was closer to 10. Who knows what it is now, could be negative if they keep this up.

Negative assumes making a loss ......lol

[James108]

Yup, -11% sss could do that if it lasts a year. That is probably worst case scenario though.

[winner69]

Yup, -11% sss could do that if it lasts a year. That is probably worst case scenario though.

From a watchers perspective will be intriguing to see how bad this gets ...or maybe they’ll stabilise the ship (train wreck)

Michael Hill Jeweller and Tiffany in the same sentence .....that’s a bit of a stretch of the imagination.

One never knows one day this might be worth a punt ....maybe 40 cents

[whatsup]

bigger lines of shares being dumped today, some one agrees with me, could we be sub .70 before todays day end ?

[winner69]

The disclaimers at the bottom of today’s announcement may be close to the truth and an indication of the how the year going to play out

[winner69]

Approx $404 K turn over per store, high over heads and discounting could be a death sentence here , watch the next numbers closely for and worsening situation, if no up turn could be that a total restructuring is needed imo.

Bit better than that ...average store turnover about A$1.9m

Not that high really and your comments re overheads are relevant

[Beagle]

Really UGLY and going to get a LOT UGLIER in my opinion. Product offer and business case is fundamentally flawed. 3% sales by ecommerce platforms is really pathetic.
The next Pumpkin Patch ? Not at any price for me Winner because I don't punt on mutts. I like watching train wrecks however because they teach you what NOT to do in business.

[Beagle]

http://www.sharechat.co.nz/article/7ef08978/first-nz-cuts-michael-hill-earnings-forecast-after-weak-sales.html?utm_medium=email&utm_campaign=First%20NZ%20cuts%20Michael%20Hill%20 earnings%20forecast%20after%20weak%20sales&utm_content=First%20NZ%20cuts%20Michael%20Hill%20e arnings%20forecast%20after%20weak%20sales+CID_77e6 3ac0dcfb0b1776046b3b9840d28e&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle7ef08978first-nz-cuts-michael-hill-earnings-forecast-after-weak-saleshtml

Forward PE is 9 on FNZC forecast but I reckon their forecast is "brave"

[whatsup]

Looks like .74 is the bottom for now, late flurry of buying atm.

[winner69]

Retail expert says it’s good to see a retailer cutting back on discount ...good being an expert who knows everything eh

The comments under the article probably a better indicator of the uphill battle Michael Hill has

https://www.stuff.co.nz/business/107874467/michael-hill-shares-drop-after-company-reveals-new-tactics-not-paying-off-yet

[Beagle]

Why would one pay a forward PE of 9 for a retailer that's swiftly contracting and there are real questions over the validity of their business model when one can buy a highly successful retailer on a pathway of solid growth with excellent stock turn like HLG for a forward PE of about 11 ?

[James108]

Well an argument could be made for taking more than last years earnings into consideration. In which case the 'average' p/e of HLG is considerably higher.

In any case I hold more HLG than MHJ.

[winner69]

Hard to fix when you try to turn a slow moving train wreck around

I blame Rob Fyfe influence


Rob must have been upset with my comment

Bought 700,000 shares

BUY WHEN DIRECTORS BUY

[blackcap]

Rob must have been upset with my comment

Bought 700,000 shares

BUY WHEN DIRECTORS BUY

I think the other director bought some as well, but not as many as Rob. Yeah a buy signal if I ever saw one.

[whatsup]

Rob must have been upset with my comment

Bought 700,000 shares

BUY WHEN DIRECTORS BUY


any idea at what price ?

[Balance]

any idea at what price ?

72 cents.

Well, gotto to say that 700,000 shares buy a lot of credibility so time to have a close look at this one!

[percy]

Well they certainly do not use charts to time their share purchases.
Business model looks broken to me.

[whatsup]

Well they certainly do not use charts to time their share purchases.
Business model looks broken to me.

Why do you say that , these guys are not mugs, imo the current " failed " business model can be changed and Im picking that is why they are there.

[percy]

The fizz is out of the bottle.
Their business model was based on discounting? Discounting bringing the price back to what I would call the normal retail price.
As is in the case of most failed retail models rebranding costs a great deal and more often than not fails.
Same store sales are flat or negative while overheads are increasing.
Finally waking up years too late to online sales ,means that they are behind the pack here too.
My own view is LOV have taken the low end of the market leaving either the middle or upper end to MHJ,and I doubt they will survive in either of those.
A lot of clever people have lost a great deal of capital in the changing retail market.
Different this time.?

[LAC]

Totally agree, my family (especially mom) is a jewellery person and have really moved away from MHJ stores which they did like initially (15 years or so ago) but their "normal" prices of jewellery is ridiculous, they priced themselves in the "unique" "one off" "custom made" market on their higher end products which was basically stuff off the catalogue (they would even open the suppliers catalogue and show you the options and then charge to MHJ pricing. Family have all moved to smaller retailers who have better 18ct and 22ct jewellery and manufacture very small number of items which is what you want when spending 5-10k on jewellery IMO.
The other part that really annoyed me with MHJ was their useless "life guarantee" on their pieces, yet whenever u have a problem there is ALWAYS a BS fine print about why they cant fix it without extra charges. There is ALWAYS an extra charge even though item is used less than 30 days.
I personally didnt like some of their sales reps, too pushy for my liking.
I just think they lost the plot along the way, products were just not in line with prices - our insurance company agreed on their valuations as well, hence they made use get external ones at our cost.

[winner69]

LAC said — I personally didnt like some of their sales reps, too pushy for my liking.


No pushy pushy no going to Vegas. Some even get into the Gold Club (not that Sir Michael looks too impressed in one photo)

Pages 16 and 17 Celebrating Success
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/324470/287529.pdf

[winner69]

Pretty rousing speech by Emma

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/325708/289088.pdf

[percy]

Fell flat with me.
Not convinced at all.
Imagen Rod Duke at Briscoes coming out and saying no more sales,however, we intend to engage more with our customers.Utter drivel.

[winner69]

Fell flat with me.
Not convinced at all.
Imagen Rod Duke at Briscoes coming out and saying no more sales,however, we intend to engage more with our customers.Utter drivel.

I was seduced by the aspirational words and ra ra etc and didn’t concentrate on the content / detail

Percy, sounds like they going back to discounting and lots of promotions. From the CEO speech (from sharechat)


"We have now moved to adjust our promotional activity for the balance of the financial year," he said. Hill said that management has implemented a "range of initiatives" to ensure strong performance during the key Christmas trading period.

"We are in the mid-market and are up against strong discounting in all markets," Taylor said. "As such we will continue to have great offers and competitive pricing so our stores can continue to compete on a day to day basis,"

http://www.sharechat.co.nz/article/97fb0a3f/michael-hill-rejigs-strategy-for-rest-of-year.html?utm_medium=email&utm_campaign=Michael%20Hill%20rejigs%20strategy%20 for%20rest%20of%20year&utm_content=Michael%20Hill%20rejigs%20strategy%20f or%20rest%20of%20year+CID_b86cf9b1b3c98f8146853366 5ba35d77&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle97fb0a3fmichae l-hill-rejigs-strategy-for-rest-of-yearhtml

[percy]

[QUOTE=winner69;734914]l

Percy, sounds like they going back to discounting and lots of promotions. From the CEO speech (from sharechat)

It is that or die.
And it must be great product at a GENUINE discounted price.
Challenging,in a very tough retail market.

[blackcap]

This is some serious insider buying...

https://www.asx.com.au/asxpdf/20181101/pdf/43zy63bnv9nhhv.pdf

[DarkHorse]

Indeed - not often a director spends $245K to more than triple her holding.

[winner69]

Indeed - not often a director spends $245K to more than triple her holding.

.....don’t forget Rob Fyfe bought half a million or so last week

Buy when directors buy big they say

[Balance]

.....don’t forget Rob Fyfe bought half a million or so last week

Buy when directors buy big they say

Rest of market does not quite agree yet?

[whatsup]

Rest of market does not quite agree yet?

They eventually recognise that the new broom ----- ---. !

[percy]

They eventually recognise that the new broom ----- ---. !

Can't get the fizz back into the bottle.

[McGinty]

Can't get the fizz back into the bottle.

Looking at the MHJ chart, it looks like someone shock the bottle mid Oct before it was opened, but I'm sure Rob knows what he's doing. After all I remember when he was on the Trilogy (Ecoya) board, he got his directors fee paid in shares (mostly between $0.5- $1 ).

Too bad he left the company before we could see when he sold :D

[winner69]

New exec

Suppose being ‘globally relevant’ actually means something in the context of jewellery retailing

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/329289/293462.pdf

[winner69]

Things looking good (or encouraging) at Michael Hill with good Xmas period sales

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/329482/293672.pdf

[Hectorplains]

Things looking good (or encouraging) at Michael Hill with good Xmas period sales

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/329482/293672.pdf


Better than expected perhaps? Not actually that good though. Revenues significantly down, again. Two okay months out of the six and we're back on track. Well that's the spin...

[Balance]

Sp at 81c - 42% increase from low of 57c reached before results announced.

Always right to follow when insiders (directors) buy in volume - especially when you can buy in even cheaper than them!!!!

https://www.nzx.com/announcements/325606

700,000 shares bought at 72c

https://www.asx.com.au/asxpdf/20181101/pdf/43zy63bnv9nhhv.pdf

363,815 bought at 67c

[clearasmud]

Nice increase eh.
Now if it can only get back to my average :90c

[limmy]

They used to be a good long term hold until they entered the USA market.

[percy]

311 stores producing a revenue of $315 mil,or just over $1mil revenue per store.NZ stores are well over $1mil while Canadian stores are well under $1mil per store.That figure reduces when we take off the $9.5mil generated from online sales.On line sales at 3% of total sales have a lot of ground to make up.
Net profit after tax is $19.5mil or $62,700 per store,or $1,200 per store per week.
Still very early days repositioning the brand from discounter to good value store.
Their store fit out is a lot more expensive than Lovisa's which means their pay back time is in years rather than months.
Looking at Lovisa store compared to a Michael Hill store, it is easy to note which is busy and which is not.
So I remain of the opinion LOV is the better company to invest with.LOV has a proven model that works worldwide.

[bull....]

10% company traded?

[sb9]

10% company traded?

All at $0.70c a piece....something up?

[blackcap]

All at $0.70c a piece....something up?

Either the number one share holder selling a piece, or otherwise its a portion of NZCS whoever that may be....

Hoglett Hamlett Limited* 148,330,600 38.28
New Zealand Central Securities Depository Ltd 60,370,705 15.58

http://investor.michaelhill.com/static-files/efb5d976-14e3-4b9b-a038-ade3d088276a from the annual report.

We will find out soon enough who the seller is and potentially who the buyer is if it is one parcel.

[percy]

Paying for the boat?

[Balance]

Either the number one share holder selling a piece, or otherwise its a portion of NZCS whoever that may be....

Hoglett Hamlett Limited* 148,330,600 38.28
New Zealand Central Securities Depository Ltd 60,370,705 15.58

http://investor.michaelhill.com/static-files/efb5d976-14e3-4b9b-a038-ade3d088276a from the annual report.

We will find out soon enough who the seller is and potentially who the buyer is if it is one parcel.

Looks like Fisher Fund exiting their whole stake to me.

Right way to do it - in fact, only way to do it.

[sb9]

Looks like Fisher Fund exiting their whole stake to me.

Right way to do it - in fact, only way to do it.

Correct, its Fisher Funds who sold down...

https://www.nzx.com/announcements/332291

Wonder who bought them though.

[Balance]

Correct, its Fisher Funds who sold down...

https://www.nzx.com/announcements/332291

Wonder who bought them though.

Simple rule I have followed over the years - buy when they first disclose and then, sell when Fisher Fund buys, and buy when Fisher Fund sells. Watch your exit though - they will buy and keep on buying so sell close to the top to them.

As close as I can get to a sure fire 'win win' you will ever get!

[blackcap]

Time to keep buying methinks:

https://www.asx.com.au/asxpdf/20190325/pdf/443r9rpz0q0qzh.pdf

[Jim]

Time to keep buying methinks:

https://www.asx.com.au/asxpdf/20190325/pdf/443r9rpz0q0qzh.pdf

Time to load up

[MauroNZ]

I've been thinking of topping up given the low current price is.

[percy]

311 stores producing a revenue of $315 mil,or just over $1mil revenue per store.NZ stores are well over $1mil while Canadian stores are well under $1mil per store.That figure reduces when we take off the $9.5mil generated from online sales.On line sales at 3% of total sales have a lot of ground to make up.
Net profit after tax is $19.5mil or $62,700 per store,or $1,200 per store per week.
Still very early days repositioning the brand from discounter to good value store.
Their store fit out is a lot more expensive than Lovisa's which means their pay back time is in years rather than months.
Looking at Lovisa store compared to a Michael Hill store, it is easy to note which is busy and which is not.
So I remain of the opinion LOV is the better company to invest with.LOV has a proven model that works worldwide.

Above post on 12th March 2019.
At that time MHJ share price was 78 cents.................Today 58 cents,down 25.5%
while LOV's share price was $9.62.............................Today $11.40 up 18.5%.
I expect both copmpany's share price trend to continue.

[winner69]

Time to keep buying methinks:

https://www.asx.com.au/asxpdf/20190325/pdf/443r9rpz0q0qzh.pdf

Plenty underwater to date

Might need to get heaps more to average down

[percy]

Brave buyers at 54 cents.!

[MauroNZ]

Brave buyers at 54 cents.!

Another lesson here for me. Bought at $1.28 almost 6 years ago and is funny how it had dropped in the last few years. I must acknowledge I was late to learn when to exit.

[percy]

The pain continues.

[carrom74]

I remember rob fyfe bought huge lots of MHJ after getting into this trainwreck for 70 cents...

This goes to show that not all director purchases should be viewed as positive...(at least momentarily)

[Lease]

The pain continues.

Performance has improved quarter by quarter.

[percy]

Performance has improved quarter by quarter.

Not so.Margin reducing ,huge staff back pay.Millions.

[Lease]

Not so.Margin reducing ,huge staff back pay.Millions.

I focus on sales. We don't know margin yet until annual report released. Staff pay back is one-off cost. MHJ valuation has been down to multi-year low should be a good buy.

[percy]

I focus on sales. We don't know margin yet until annual report released. Staff pay back is one-off cost. MHJ valuation has been down to multi-year low should be a good buy.

They have stated margin contraction.
That means margin contraction.
That means to get the same profit, you need to "greatly" improve sales.That is not happening.
11 store closures come at a cost.
10 new stores will take years to recover their fit out costs.
In plain language it is a disaster.
Only positive is increase in online sales.But comes off an extremely low base and now only accounts for approx 3% of sales.

[Lease]

They have stated margin contraction.
That means margin contraction.
That means to get the same profit, you need to "greatly" improve sales.That is not happening.
11 store closures come at a cost.
10 new stores will take years to recover their fit out costs.
In plain language it is a disaster.
Only positive is increase in online sales.But comes off an extremely low base and now only accounts for approx 3% of sales.

Half year operating profit margin down to 9%. Market has been fully aware the margin contraction, and has act accordingly. I don't think there will be further margin contraction. SP has down from 80C to 55C. I estimate EPS at around 8C. MHJ both PE and PB have be down to historical low.

[winner69]

They have stated margin contraction.
That means margin contraction.
That means to get the same profit, you need to "greatly" improve sales.That is not happening.
11 store closures come at a cost.
10 new stores will take years to recover their fit out costs.
In plain language it is a disaster.
Only positive is increase in online sales.But comes off an extremely low base and now only accounts for approx 3% of sales.

Yes percy they did mention margins - a full year gross margin of 61.1%, compared against 62.8% for the prior year.

That’s 1.7% points gross margin drop

On $560m that’s nearly a $10m margin hit ...aussie dollars ...straight through to bottom line.

Once a trend starts (during transformations) it usually continues or at best it’s hard to arrest a down trend

[Balance]

The pain continues.

Sigh - tough space to be in - bricks & mortar retailing of a semi-luxury discretionary product in today's retailing environment.

Very painful indeed.

[Lease]

Yes percy they did mention margins - a full year gross margin of 61.1%, compared against 62.8% for the prior year.

That’s 1.7% points gross margin drop

On $560m that’s nearly a $10m margin hit ...aussie dollars ...straight through to bottom line.

Once a trend starts (during transformations) it usually continues or at best it’s hard to arrest a down trend

Every quarter they mention gross profit margin. It's not news.

[clearasmud]

They said the margin drop was due to getting rid of old stock.
They also previously said that they were targeting up to $10m in overhead savings.

[clearasmud]

This $10-25 million back pay issue better not affect our dividends or well see below 40c

[percy]

The fizz is out of the bottle.
Their business model was based on discounting? Discounting bringing the price back to what I would call the normal retail price.
As is in the case of most failed retail models rebranding costs a great deal and more often than not fails.
Same store sales are flat or negative while overheads are increasing.
Finally waking up years too late to online sales ,means that they are behind the pack here too.
My own view is LOV have taken the low end of the market leaving either the middle or upper end to MHJ,and I doubt they will survive in either of those.
A lot of clever people have lost a great deal of capital in the changing retail market.
Different this time.?

Above posted 23/10/2018.
About right too.

[clearasmud]

The Hill family must have most of their wealth invested in this business.
They won't want to see that destroyed.

[Jim]

The Hill family must have most of their wealth invested in this business.
They won't want to see that destroyed.


The Hill family own nearly 50% of MHI

[percy]

The Hill family must have most of their wealth invested in this business.
They won't want to see that destroyed.

Share price has halved in the past year.
So like us. they can see it being destroyed on a daily basis.
Not good for any shareholder,large or small.

[Lease]

No doubt MHJ operate in a tough industry, and they haven't done well in the past a few years. But the Company have no going concern issues. For half year ended 31/12/2018, the company have $7.7m cash on hand and over $220m inventory, with only $28m bank loans. Assets very easily cover liabilities. With net tangible asset backing of 0.49 AUD per share. The Company is extremely safe and largely undervalued. Shareholders only need patience to wait share price rise from current level.

[percy]

No doubt MHJ operate in a tough industry, and they haven't done well in the past a few years. But the Company have no going concern issues. For half year ended 31/12/2018, the company have $7.7m cash on hand and over $220m inventory, with only $28m bank loans. Assets very easily cover liabilities. With net tangible asset backing of 0.49 AUD per share. The Company is extremely safe and largely undervalued. Shareholders only need patience to wait share price rise from current level.

Consider their huge ongoing lease commitments.They are liabilities.
Mall rentals are savage.Only way out is at renewal, or at the end of the lease.
So huge liabilties to be funded from a broken business model.?
Stock valuations .Take extreme care. Depends on a lot of variables.
When a business is under pressure, stock loses value very quickly.
Fixtures and fiitings become near worthless.

[Lease]

Consider their huge ongoing lease commitments.They are liabilities.
Mall rentals are savage.Only way out is at renewal, or at the end of the lease.
So huge liabilties to be funded from a broken business model.?
Stock valuations .Take extreme care. Depends on a lot of variables.
When a business is under pressure, stock loses value very quickly.
Fixtures and fiitings become near worthless.

Their performance actually has improved. The Q4 same store sales up 0.1%, reverse the last three quarters downward trend.

[percy]

Their performance actually has improved. The Q4 same store sales up 0.1%, reverse the last three quarters downward trend.
Good effort,but too little too late.Lower margin means they are still behind.


ps Have to go to the dentist at Papanui tomorrow.Will try and find time to check out the Lovisa [new store ] and MHJ stores at Northlands Mall.

[Lease]

Good effort,but too little too late.Lower margin means they are still behind.


ps Have to go to the dentist at Papanui tomorrow.Will try and find time to check out the Lovisa [new store ] and MHJ stores at Northlands Mall.

Well, you view everything on MHJ is negative. That's fine. I agree MHJ is not good. But we buy/sell shares for the purpose of making money. At current level of SP, I think the majority of negative matters, if not all, have already been reflected. I don't think there are huge room for SP drop. Buy now and most likely can make profit.

[percy]

Well, you view everything on MHJ is negative. That's fine. I agree MHJ is not good. But we buy/sell shares for the purpose of making money. At current level of SP, I think the majority of negative matters, if not all, have already been reflected. I don't think there are huge room for SP drop. Buy now and most likely can make profit.

Very negative.
Was very negative on Postie Plus years before they fell over and were brought out of admistration.Shareholders lost everything.
Been very negative on Smiths City for years.
Been negative on MHJ for awhile now.
Sitting on the fence with Briscoes and Hallensteins.
Never liked KMD's business model.
Still like Lovisa,but currently am avoiding retail ,building, and retirement sectors.
Live in hope my Turners will turn around.
Buy MHJ now ?...No.

ps If you search Sharetrader threads you will see my posts on retail stocks.Every year or so a guy used to post a new thread."The King buys Postie."No sure which one you will find,but they all ended in sadness.

[Lease]

Very negative.
Was very negative on Postie Plus years before they fell over and were brought out of admistration.Shareholders lost everything.
Been very negative on Smiths City for years.
Been negative on MHJ for awhile now.
Sitting on the fence with Briscoes and Hallensteins.
Never liked KMD's business model.
Still like Lovisa,but currently am avoiding retail ,building, and retirement sectors.
Live in hope my Turners will turn around.
Buy MHJ now ?...No.

I'm just doing the opposite. I'm jumping into retail ,building, and retirement sectors. :)

[percy]

I'm just doing the opposite. I'm jumping into retail ,building, and retirement sectors. :)

No surprises there.!!!..lol.

[winner69]

I'm just doing the opposite. I'm jumping into retail ,building, and retirement sectors. :)

KMD look exceptional value current prices

[Lease]

KMD look exceptional value current prices

Oh, I'll have a look. Ta

[blackcap]

This has to be very good news for MHJ. Same store sales up 11.9% per previous quarter. and positive sales across the board with Canada up 16%.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/342456/309533.pdf

[percy]

Canada is proving the be very successful.
The 40 year promotion has been very successful too.
However,margin compression continues,as does competition.
Also I take it as a warning,[sensible] .;"Negotiations of existing leases,renewals and refurbishments remain a key priority for the business."
I feel this year's Christmas trading will be the test of whether MHI will survive, or manage to put the fizz back into the bottle.

[blackcap]

Canada is proving the be very successful.
The 40 year promotion has been very successful too.
However,margin compression continues,as does competition.
Also I take it as a warning,[sensible] .;"Negotiations of existing leases,renewals and refurbishments remain a key priority for the business."
I feel this year's Christmas trading will be the test of whether MHI will survive, or manage to put the fizz back into the bottle.

Agree, I am too concerned about the leases. But if Canada can kick on and NZ/Aus remain stable... an entry point at these prices could do well.

[Lease]

Well, there are always challenges(for any business and any companies). I put my faith on MHJ as it is one of very few of NZ retail companies profitably expand to overseas.

[jg8512]

Canada is proving the be very successful.
The 40 year promotion has been very successful too.
However,margin compression continues,as does competition.
Also I take it as a warning,[sensible] .;"Negotiations of existing leases,renewals and refurbishments remain a key priority for the business."
I feel this year's Christmas trading will be the test of whether MHI will survive, or manage to put the fizz back into the bottle.


the statement about leases can be read two ways. I read it as suggesting they are looking for better terms as other retailers are negotiating (eg, KMD referenced this). so an opportunity, rather than a risk?

[Lease]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12169959

"Before Michael Hill, Bracken was chief executive of ASX-listed retail company Specialty Fashion Group, which operates retailers City Chic and Millers, among others.

When he joined Specialty Fashion Group, its market capitalisation was A$20m, and when he left the business in October it was over A$250m."

MHJ current CEO is a genius. He made SFG share price up twelvefold within less a year!

[percy]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12169959

"Before Michael Hill, Bracken was chief executive of ASX-listed retail company Specialty Fashion Group, which operates retailers City Chic and Millers, among others.

When he joined Specialty Fashion Group, its market capitalisation was A$20m, and when he left the business in October it was over A$250m."

MHJ current CEO is a genius. He made SFG share price up twelvefold within less a year!

You must have missed winner69's post #590. page 40, posted on 21/9/2018.

[Lease]

You must have missed winner69's post #590. page 40, posted on 21/9/2018.

What that suppose to mean, percy? A person who is able to increase shareholders value by twelvefold is worth over $2M!

[percy]

What that suppose to mean, percy? A person who is able to increase shareholders value by twelvefold is worth over $2M!

The date of the article you gave a link to was 8/12/2018..
The date today is 16/10/2019.

[Lease]

The date of the article you gave a link to was 8/12/2018..
The date today is 16/10/2019.

Well, I just give some more background information in regards to this CEO, which MHJ announcement didn't give more details.

Since the CEO was on board, MHJ branded collection sales have been up from 20% of total sales to 38% of total sales. E-commerce sales are up nearly 40% compared to same quarter last year. I'm very impressed the new CEO's ability of execution. Now I have known more about him and am confident MHJ SP will be over $1 in near future.

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12169959

"Before Michael Hill, Bracken was chief executive of ASX-listed retail company Specialty Fashion Group, which operates retailers City Chic and Millers, among others.

When he joined Specialty Fashion Group, its market capitalisation was A$20m, and when he left the business in October it was over A$250m."

MHJ current CEO is a genius. He made SFG share price up twelvefold within less a year!

Think that story needs rewriting

The transformation stuff at Specialty had already been done when Bracken started ...and he only stayed 9 months ...hmm

Specialty is now City Chic (CCX)

[winner69]

Well, I just give some more background information in regards to this CEO, which MHJ announcement didn't give more details.

Since the CEO was on board, MHJ branded collection sales have been up from 20% of total sales to 38% of total sales. E-commerce sales are up nearly 40% compared to same quarter last year. I'm very impressed the new CEO's ability of execution. Now I have known more about him and am confident MHJ SP will be over $1 in near future.

Rate Shareprice increasing it’ll be 2 bucks before most realise it.

[Lease]

Think that story needs rewriting

The transformation stuff at Specialty had already been done when Bracken started ...and he only stayed 9 months ...hmm

Specialty is now City Chic (CCX)

Surely we can't give all credits to Bracken for Specialty's recovery. But as per the article: ""The board gave me almost a white piece of paper and said 'do whatever you think is necessary to deliver the best possible outcome for our shareholders". It showed it was his decision to sell off $31M non-performing brands to make Specialty turnaround.

https://www.ragtrader.com.au/people/daniel-bracken-from-burberry-to-a-31-million-sell-off

[clearasmud]

Big interest in MHJ today.
Getting close to break even now, ha ha.
Someone believes MHJ has nailed it?

[Lease]

Xmas Trading must be going very well.

[MauroNZ]

Closest day with similar volume was on 04/12.

[winner69]

Things heading in right direction

Even giving $100,000 to bushfire fund

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/347135/315278.pdf

[percy]

Things heading in right direction

Even giving $100,000 to bushfire fund

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/347135/315278.pdf

Online sales still very modest at 3% of total sales.
Right direction? Perhaps,however more treading water to me,as margin and business model issues remain challenging.
Landlords are never easy to talk to.Only time they seem to listen is when negotiating new leases.
Interesting noting the NZ stores seem to be trading the best.
Do not know which country is giving them the online growth.
HLG are getting their's from Australia.

[Lease]

Well, at least they are progressing. Impressed.

Margin issue is not only for MHJ but for the entire industry. It's tough for retailers in this world but MHJ are going to take high-end market. I went to Westfield newmarket during the holiday and paid a visit to MHJ store there. The products are very sharp and surely expensive. Everyday the store only need one or two transactions then sales will easily go over $30k p.w.

[MauroNZ]

I like the brand, but as a shareholder I'm a bit disappointed on how it turned down in the last few years with even decreasing dividends. My holding is not that big so I still can live without worrying it but thinking of being down from $1.28 makes me think if I'm better off it.

Percy I agree with you, 3% of sales is just the online makes me think. Many other retailers have a better online sale. Though I have to say I bought a pair of earrings for my wife near Xmas and she wanted to see in-store how they look on her, hence maybe online sales are not strong. I have to say she didn't want to go to MHJ knowing I'm a shareholder :(. Pascoes was busier than MHJ that day in Lambtom Quay.

[percy]

Well, at least they are progressing. Impressed.

Everyday the store only need one or two transactions then sales will easily go over $30k p.w.

Cant help thinking should they everyday have one or two fewer transactions then sales will be $30k p.w.less...!!!

[winner69]

Wonder how good their man made diamonds are?

Sorry - grown in the lab ...but still synthetic to me

[Lease]

Monday: no sales
Tuesday: no sales
Wednesday: One Prelude $4,699
Thursday: One Prelude $4,699, One Evermore $6,999
Friday: One Solitaire $8,299
Saturday: One Solitaire $10,999
Sunday: One Prelude $4,699

Total Weekly Sales: $40,394. Everyday one or two transactions with two days no sales.

@percy

[Lease]

Based on two quarters trading update, I roughly worked out 1H 2020 EBIT should be $1m more.

10947
10948
10949
10950

[golden city]

Competition is still the problem to sort out

[MauroNZ]

It's interesting how many retailers aren't doing well:

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12300768

Should we expect the whole retailing to be more challenged?.

[percy]

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/aM6hBFraX892fFw6Nehq763jQQ/tMwvAPAXN58mij0CIzQz892Q

[MauroNZ]

https://sendy.tarawera.co.nz/l/J6oLVth2f3f6IXNYvUBQEg/aM6hBFraX892fFw6Nehq763jQQ/tMwvAPAXN58mij0CIzQz892Q

Yes I read that one as well.

[MauroNZ]

Seems a decent result, thoughts?

Key Financial Results
* Statutory net profit after tax increased by 19.6% to $21.4m (FY19H1: $17.9m*).
* Statutory earnings before interest and tax increased by 34.6% to $35.3m (FY19H1: $26.2m*).
* Group operating revenues increased by 4.4% for the half to $329.5m (FY19H1: $315.4m).
* Underlying earnings before interest and tax pre‐AASB 16 increased by 6.9% to $31.6m (FY19H1: $29.6m).
* Group same store sales were up 6.3% at $317.7m (FY19H1: $298.9m).
* Group gross margin reduced to 61.7% (FY19H1: 64.2%), predominantly due to FX and gold price impacts.
* Active inventory management, delivering ~10% reduction to $200.1m (FY19H1: $220.2m).
* Net positive cash position of $0.4m against net debt position of $20.7m at close of FY19H1.
* Interim dividend of AU 1.5 cents per share, unfranked and fully imputed with conduit foreign income.
Operational Performance
* e‐commerce sales on the Michael Hill website (excluding Emma & Roe product) increased by 44.3% to $9.7m.
* Branded collection sales represented 35.4% of total sales for the half.
* FY19 cost‐saving initiatives now annualising across FY20, with the second tranche of $5m savings starting to be
realised in FY20. Additional cost‐out initiatives are also being pursued.
* Loyalty program Brilliance launched online in November 2019, with in‐store launch to follow in FY20H2.
* One Michael Hill store opened (Canada) and three under‐performing stores were closed (Australia) during the
period, giving a total of 304 stores trading at 29 December 2019.

[Lease]

Except gross profit margin dropped, which is well expected, all others are quite good. MHJ have strong capability to execute.

[peat]

looks good but some % gains are exaggerated by extra costs incurred last year
But this shows that they can come back I reckon, and in the meantime yield is acceptable
none held but getting interested again

[Lease]

Operating profit margin now close to 10%, and last year it was only 3.7%. Now MHJ is at net cash position. Impressed.

[MauroNZ]

Operating profit margin now close to 10%, and last year it was only 3.7%. Now MHJ is at net cash position. Impressed.

Yes that was a surprise!.

[whatsup]

MHJ getting slaughtered with the covid bottom atm is .23 now @ .25, retail is not a good business model .

[MauroNZ]

MHJ getting slaughtered with the covid bottom atm is .23 now @ .25, retail is not a good business model .

I think is not the only one, if you look around most of the business are suffering.

[whatsup]

I think is not the only one, if you look around most of the business are suffering.

Agree, but this heading is for MHJ.

[Jim]

Agree, but this heading is for MHJ.

ACC picked up some cheap shares and increased it's holding

[Lease]

Agree, but this heading is for MHJ.

MHJ is at net cash position and now defer to pay interim dividend. With government subsidy, MHJ should be able to go through if Covid-19 can pass at next a few months.

Probably a buying opportunity as now SP/NTA=0.57. Normally the ratio is >1

[Sideshow Bob]

MHJ is at net cash position and now defer to pay interim dividend. With government subsidy, MHJ should be able to go through if Covid-19 can pass at next a few months.

Probably a buying opportunity as now SP/NTA=0.57. Normally the ratio is >1

At this time it probably shouldn't be Net Tangible Assets, but Net Realisable Assets.

Although don't expect will get to that stage.

[blackcap]

At this time it probably shouldn't be Net Tangible Assets, but Net Realisable Assets.

Although don't expect will get to that stage.

Ahem cough... shouldn't it always be Net Realisable Assets? and never NTA? I find NTA to be an accounting construct that is mostly unhelpful.

[allfromacell]

Deep value play here anyone?

[percy]

This is the Michael Hill thread.
Please delete the other one Timesurfer,or post your posts here.

[Timesurfer]

This is the Michael Hill thread.
Please delete the other one Timesurfer,or post your posts here.
That is a job for above my pay grade, I don't have them permissions.
Maybe this thread could be more appropriately named so it shows up at the top of searches for the MHJ ticker.

[percy]

Send a PM to ST.MOD or Vince.


You will note the rest of us have found the right thread for nearly 16 years.!!..............lol.

[Sideshow Bob]

https://www.nzx.com/announcements/356348

RETURN TO TRADE DEMONSTRATES RESILIENT BUSINESS WELL POSITIONED FOR THE FUTURE Fourth Quarter Trading and Business Update
15 July 2020 Having temporarily closed all stores in late March 2020 due to COVID-19 restrictions, with a staggered reopening of stores since May 2020, Michael Hill International Limited (ASX/NZX: MHJ) today announces its fourth quarter trading results, along with a business update.

KEY POINTS • Robust return to trade during staggered reopening of stores – Adjusted1 same store sales for the quarter were down 4.1%, against prior year, underpinned by initiatives gathering momentum across the business.

• Digital sales reach new highs – For the quarter, online sales were up 193% against prior year, delivering some of the highest weeks in the Company’s history. In the quarter, a number of digital initiatives were accelerated and delivered. For the year, digital channels represented 4.6% of total sales (FY19: 2.8%).

• Margin improvement – FY20Q4 margin up 200 bps against prior year, to deliver flat profit dollars for the quarter on an adjusted1 same store sales basis.

• Full year sales – Adjusted1 same stores sales for the year were up by 2.7%, against prior year. For the nine month period to FY20Q3, adjusted1 same store sales were up 3.6%, against prior year.

• Resilient balance sheet – Net debt lower than FY19 close, through controlled working capital management and inventory levels in line with prior year. • Branded collection sales growth continues – Branded collections represented 39.9% of total product sales for the quarter, resulting in 37.3% of total product sales for FY20 (FY19: 32.5%).

• Continued store portfolio management – 11 under-performing stores were permanently closed during the quarter (7 in Australia, 3 in New Zealand and 1 in Canada), with a network total of 290 stores across all markets.

Decisive Fiscal Management
The Company took clear and decisive action to preserve cash with an absolute focus on cost disciplines, inventory and capital management during the crisis and recovery period. - All discretionary operating spend was paused with planned capital expenditure cancelled or deferred, other than the completion of our cloud enabled ERP platform and one flagship refurbishment.
- Across the three markets the business stood down all retail team members from late March, with a gradual return to work as stores reopened. In addition, over 100 support office team members were stood down. The Company moved swiftly to access government wage subsidies across the three markets. Michael Hill recognises and appreciates the ongoing support of these national programs for both our business and the wider community.
- Following on from the margin improvements in the first nine weeks of FY20Q3, management’s focus on margin continued through FY20Q4. As the business reopened, strategies across loyalty, digital-first and retail fundamentals underpinned margin improvement in the business.
- Furthermore, the Company has taken decisive action to emerge with a modernised agile operating structure. Reflecting on lessons learnt during COVID-19, and the ongoing transformation to a digital omni-channel retailer, the business has undertaken a restructure, delivering a leaner support office. The Company acknowledges the impact on our team members and customers during these unprecedented times and thanks all members of the Michael Hill community for their continued support and understanding.


Digital First The Company’s intense focus on digital channels accelerated through FY20Q4.
- During the quarter, the online channels delivered significant sales growth of +193%, with margin growing at an even faster rate.
- This increased performance was supported by the accelerated delivery of a number of digital initiatives, including enhanced website and user experiences; launch of virtual appointments and virtual selling; advancements of our WeChat platform.
- The Michael Hill loyalty program Brilliance initially launched digitally in October 2019, and continues to go from strength to strength with membership now exceeding 165,000. Members receive exclusive membership pricing, welcome, birthday and anniversary rewards, as well as exclusive early access to company promotions. Following the completion of our ERP upgrade, planning is now underway for further omni-channel enhancements enabling click and collect, ship from store, drop ship and marketplace functionality.

Global Store Network In early May 2020, based on Government health guidance, the Company started progressively reopening stores with the majority of our global network open by early July.
Australia: From 9 May 2020, the Company trialed store openings to test instore safety protocols and gauge customer demand. Following the trial, a number of store tranches swiftly opened across Australia, with most stores open by the end of May 2020. Unfortunately, the recent outbreak of COVID-19 in Victoria has required the Company to temporarily close 7 stores – further monitoring is continuing.

New Zealand: In mid-May 2020, our New Zealand stores opened in two tranches over two consecutive weekends.

Canada: From 30 May 2020, based on local provincial guidance, the Company progressively reopened stores, starting initially in the Western provinces, then moving across the country. With Ontario more heavily impacted by COVID-19, many of the stores did not reopen until the first weekend of July. The Company has long and established relationships with landlords in all markets and values the support received in returning to trade. Through the strength of these relationships, the Company has negotiated rental abatements and deferrals with many landlords. Negotiations continue with a number of landlords, and the Company remains confident that appropriate commercial outcomes will be reached. The company is constantly reassessing our global store network, and monitoring lower foot traffic, which in time could see further store closures.

Commenting on the result, Michael Hill International Limited, CEO Daniel Bracken said: “Michael Hill has emerged from the pause in store trading as a leaner, stronger and more focused business. I’m very proud of the professionalism demonstrated by all our people over the last four months as we navigated the complexity of a global pandemic - whether it be the health and safety of our team and customers, new instore protocols, the unwavering focus on costs or our resilient and robust return to trade. I’m particularly pleased with our digital performance over this period, as well as the continued success of our loyalty program, Brilliance. With the implementation of the new ERP platform, together with the executives I am excited by the opportunities to enhance our omni-channel offering. “The reopening of our store network has seen very pleasing sales and margin performance despite lower foot traffic. This reflects the dedication of our team members, the continued engagement of our loyal customers and the importance of the strategic progress we have made over the last 12 months. “Additionally, we have continued to evaluate and assess our business, the learnings from which have been reinforced by some aspects of the global pandemic. This has allowed us the opportunity to reimagine and modernise our operating model to become a more relevant omni-channel retailer of the future. These decisions have been necessary and appropriate to ensure the health and resilience of the business and to put us in a stronger position for the future. Sadly, this has resulted in a number of non-customer facing team members departing the business. While our aim throughout has been to preserve as many jobs as possible, those who leave us will be treated with care, dignity and respect and we will be providing as much support as we can through these challenging times. “There is no doubt that economic uncertainty will continue, given future government stimulus packages in all markets remain unclear, and ongoing volatility in consumer confidence is likely. As recent circumstances in Victoria have demonstrated, further COVID-19 outbreaks pose additional risks. With these risks in mind, Michael Hill has moved swiftly in addressing our operating model and associated cost base. Having said this, the Company has experienced a solid start to the 2021 financial year, with all markets and channels ahead of prior year.”

SEGMENT BREAKDOWN
• The Australian segment adjusted1 same store sales were down by 8.1% for the quarter. There were 155 stores trading at the end of FY20Q4 (FY19Q4: 168).
• The New Zealand segment adjusted1 same store sales were down by 10.9% for the quarter. There were 49 stores trading at the end of FY20Q4 (FY19Q4: 52).
• The Canadian segment adjusted1 same store sales were up by 38.1% for the quarter. This is largely due to strong online sales and delayed opening of stores. There were 70 of the 86 stores trading at the end of FY20Q4 (FY19Q4: 86).

Revenue for retail operations from the sale of goods and services for FY20Q4:
The following figures are in Australian dollars Last Year* This Year* % Var Total adjusted1 same stores AUD 53,783,272 51,600,088 -4.1% Total all stores AUD 133,130,618 52,504,336 -60.6%

Adjusted1 same store figures in local currency Australia same stores AUD 34,847,712 32,034,743 -8.1% New Zealand same stores NZD 14,254,100 12,695,250 -10.9% Canada same stores CAD 5,164,853 7,133,373 38.1%

All stores figures in local currency Australia all stores AUD 72,455,983 33,057,006 -54.4% New Zealand all stores NZD 28,848,872 12,975,930 -55.0% Canada all stores CAD 31,170,861 6,699,435 -78.5%

Exchange rates used for FY20Q4: New Zealand 1.06 1.07 Canada 0.94 0.92

Revenue for retail operations from the sale of goods and services for Full Year FY20:
The following figures are in Australian dollars Last Year* This Year* % Var Total adjusted1 same stores AUD 457,116,789 469,326,172 2.7% Total all stores AUD 562,549,817 485,671,362 -13.7%

Adjusted1 same store figures in local currency Australia same stores AUD 256,485,033 256,847,297 0.1% New Zealand same stores NZD 101,426,045 103,902,066 2.4% Canada same stores CAD 100,561,785 102,880,317 2.3%

All stores figures in local currency Australia all stores AUD 312,778,394 266,288,812 -14.9% New Zealand all stores NZD 119,691,433 106,665,617 -10.9% Canada all stores CAD 130,111,329 106,369,226 -18.2%

Exchange rates used for Full Year FY20: New Zealand 1.06 1.05 Canada 0.95 0.90

1 Adjusted same store sales reflect sales through store and online channels on a comparable trading day basis and are unaudited.
The above figures for all store sales represents eleven months sales results with accounting adjustments plus June preliminary sales figures prior to final accounting adjustments, and are unaudited.
Revenue figures stated above include the Professional Care Plan (PCP) revenue recognised during the period and sales through our store and online channels (for Australia and New Zealand for the full year and for Canada up to February month end, given the delayed opening of return to trade of the Canadian stores network). The PCP income recognition pattern is based on existing estimates and is subject to ongoing management review and adjusted at half-year/year-end as required.

* Commencing FY20, MHJ has adopted a retail reporting calendar. Accordingly, the figures above reflect comparable quarterly 13-week trading periods and trading days. - ENDS -

[Getty]

These results are way better than what I was expecting in the circumstances.
Well done to the team.

[percy]

These results are way better than what I was expecting in the circumstances.
Well done to the team.

Certainly doing the right things.Making the hard decisions.Still a huge amount of growth available for their online channel.

[winner69]

Certainly doing the right things.Making the hard decisions.Still a huge amount of growth available for their online channel.

I was surprised that online has only been 4% of sales .....that’s almost non-existent

Hopefully will increase .....as you say PERCY do that bit right and you’re someway to being good again.

[winner69]

Not very inspiring web site though ...maybe that’s why online sales pretty low.

[percy]

I was surprised that online has only been 4% of sales .....that’s almost non-existent

Hopefully will increase .....as you say PERCY do that bit right and you’re someway to being good again.

They were very late to the online party,and I would say they are paying the price.
4% is a start.But a great deal of work needed.I would think to survive they will need to target 30% online within a reasonable time frame of two to three years.
They will need a top site and perhaps they should get the experts, Estar on line. to do their platform.

[percy]

Pleasing seeing their online sales are now 5% of revenue.Still a very long way to go.
A very tough year,with a profit.Well down.
However the NPAT was $3.1 mil.With 290 stores that works out at $10,689.65 pa per store, or just $205.57pw per store.

[winner69]

One thing about Michael Hill no wonder what the numbers say they are always so positive about things

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/358211/328650.pdf

[Getty]

One thing about Michael Hill no wonder what the numbers say they are always so positive about things

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/358211/328650.pdf

Yep. there one to WATCH..

[nztx]

One thing about Michael Hill no wonder what the numbers say they are always so positive about things

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHJ/358211/328650.pdf


I'd be really darn positive too if I'd just decreed myself a 12 month further extension interest free on the already deferred dividend out to new revised pay date 30 September 2021 ;)

What sort of devious Aussie trick is that ?

Really MHJ ? -- Do the right thing - the already deferred dividend is from almost 5 or so months ago with no further declared past that, by looks of things

No wonder the SP is lingering where it currently is & likely to stay for some time into the future..

it would be difficult to see the SP here rise north of the equator any time soon..

[clearasmud]

I'd be really darn positive too if I'd just decreed myself a 12 month further extension interest free on the already deferred dividend out to new revised pay date 30 September 2021 ;)

What sort of devious Aussie trick is that ?

Really MHJ ? -- Do the right thing - the already deferred dividend is from almost 5 or so months ago with no further declared past that, by looks of things

No wonder the SP is lingering where it currently is & likely to stay for some time into the future..

it would be difficult to see the SP here rise north of the equator any time soon..

I agree ;disappointing.
More importantly is the management up to snuff.
They have been serial dissappointers ,haven't they?

[peat]

I actually think its a valid way of arranging things cf Seeka who werent going to and now they are.
If a profit has been made out of the period and normally a dividend would be paid then rather than just saying nah due to <shakes head > uNcErtAintY , say yeh we will pay X number of cents but we will delay payment date until we are more certain that we are out of the mysterious covid woods.

[peat]

Strong sales performance across the first three quarters and taking market share, Q1: +11.9%; Q2: +4.0%; Q3 (9wks): +3.1%


They seem to have contained costs well, and were doing well until Covid which took 80m of supposed revenue, and this has dramatically affected annual profits of course, and seemingly not helped by the new leasing adjustments as well which reduced profit by 2.1 mill down to 3.1 mill so thats quite a chunk (40%). But this is not cash they remind us.

Lease rental expenses have been replaced by depreciation on right-of-use asset and intereston lease liability-
No impact on:- Cash earnings and cashflow- Debt covenants and facility headroom


Im looking through covid here
:cool:11864:cool:

[Getty]

Spheria Asset Management's jump from less than 5% holding, to 7.46% in one bite, reveals they have bought some big names to the table:
BNP Paribas.
NAB.
JP MORGAN CHASE.
Citibank.
& others.
Should the little boys follow?

Dr JPG

Kia Kaha
KIA car huh?

[Getty]

Good endorsement of the co. by 2 directors buying in on market, (not some priveleged position) of @ $245k & $54k respectively, to add to existing holdings.

I suspect something is up...

[percy]

Good endorsement of the co. by 2 directors buying in on market, (not some priveleged position) of @ $245k & $54k respectively, to add to existing holdings.

I suspect something is up...
Think Fyfe is looking a bit ill on the 750,000 he brought at 70 cents in March 2019.

[Getty]

So he is dollar cost averaging, which means he still has faith.

No body saw Covid coming then, so I dont think what he, or anybody else did in 2019 should be viewed as a shortcoming.
Now, if he was selling...or just sitting on the fence...

[Getty]

Someone's polishing the dust off the diamond.

$2.824M gone thru today 38/39c, which is well above the 32c median pre FY ann.

[Getty]

Rob Fyfe has put another $192500 of his money where his mouth is, to top up to 2.693M shares.

Reminds me of the conviction David Mair had/has in SKL, and look what has happened to their SP.

[Lease]

Looks the insiders are quite confident on company's post-Covid 19 performance. Should we follow the insiders?:)

MHJ is the only share I am making paper loss in my portfolio.

[clearasmud]

Looks the insiders are quite confident on company's post-Covid 19 performance. Should we follow the insiders?:)

MHJ is the only share I am making paper loss in my portfolio.
Lease, I got my ave down from 80 to 38 by tripling my holding from 24c

[Lease]

Lease, I got my ave down from 80 to 38 by tripling my holding from 24c

Good on you. I still keep MHJ though on paper I make 30% loss. Other shares, like MPG, CVT, I cut loss and bought into AIA, SUM, VGL and ANZ. Now they all make profit.

I'm still confident on MHJ so I'm still holding.

[MauroNZ]

Lease, I got my ave down from 80 to 38 by tripling my holding from 24c

Good job, I thought about it but I was also concerned if the bottom was there or not.

[clearasmud]

Good on you. I still keep MHJ though on paper I make 30% loss. Other shares, like MPG, CVT, I cut loss and bought into AIA, SUM, VGL and ANZ. Now they all make profit.

I'm still confident on MHJ so I'm still holding.
Thanks guys.
I also cut my losses twice on Mpg.
Shame on me.
Sum, Hlg and Ift have been good to me.
I also tripled down on Tra and dropped my ave from 280 to 200

[winner69]

At this rate MHJ will be back to the 70's before too long

I reckon it's a good punt -- useless company but who can forgo a quick buck when punters are excited

[Lease]

At this rate MHJ will be back to the 70's before too long

I reckon it's a good punt -- useless company but who can forgo a quick buck when punters are excited

You are so optimistic mate:)

[Ltw]

At this rate MHJ will be back to the 70's before too long

I reckon it's a good punt -- useless company but who can forgo a quick buck when punters are excited

It's good to see directors loading up. Fingers crossed you are correct

[Lease]

Mr Fyfe has been MHJ director for over 6 years. He must know something good to happen thus pump nearly $200k to load up.