Markets wrap: Briscoe trumpets first-quarter sales increase

Thursday, 4 May 2023

Sales may have gone backwards in real terms, but even positive nominal sales growth is a victory in retail in 2023.

Briscoe Group managed to increase sales in its first trading quarter of the year.

But the sales increase of 2.82% on the first quarter of 2022 was less than the rate at which inflation has eroded the spending power of each dollar earned since the end of April last year.

Rod Duke, group managing director, said Briscoe Group sold $181.2 million of goods in the 91 days ending April 30, compared to $176.2m a year earlier.

He forecast a tough year for the retail sector as the economy worsens.

* Briscoe Group pays special 6c per share dividend after repaying $11.5m wage subsidy

Reserve Bank governor Adrian Orr says it's seeing what it hoped to see.

* Briscoe third-quarter sales rise 15%; retailer upbeat heading into Christmas

“We’re pleased with the sales we’ve produced for this first quarter. To achieve positive sales growth given the continued negative economic factors impacting consumer confidence and retail spending is a solid start to the year for the group,” he said.

Turbines in the northern section of Mercury's Turitea Wind Farm partially disappear in the clouds.

Global business news service Bloomberg rates New Zealand’s chance of hitting recession at 70%. Only the United Kingdom has a higher chance of going into recession, Bloomberg estimates.

Australia had just a 40% chance.

Duke expected to see margins on sales fall.

Briscoe’s share price is down just under 23% over the past 52 weeks, NZX data shows. Briscoe ended the day up 1.35%. The NZX50 was up just 0.51% over the day.

Energy Minister Megan Woods cut the ribbon at New Zealand’s biggest wind farm.

Mercury’s Turitea Wind Farm in Manawatū adds 2% additional renewable energy to the country’s national grid.

That was enough to power 120,000 households or 375,000 electric vehicles, Mercury told investors.

Mercury’s chief executive Vince Hawksworth said the company had invested nearly half a billion dollars in in the Turitea Wind Farm.

“Turitea is a site of exceptional wind quality,” he said.

Turitea’s 33 northern turbines have been generating to the grid since December 2021. The southern 27 turbines would be operating fully by June.

The ceremonial opening was not news to investors on the NZX, where the company’s share price barely shifted during the day’s trading. Mercury’s shares are up 9.13% over the past 52 weeks.

The biggest bit of news from the Australian ASX relating to New Zealand business was National Australia Bank’s half-year profits announcement.

NAB is headed by New Zealander Ross McEwan, who joined it from Royal Bank of Scotland.

McEwen told investors: “Today we have delivered a strong financial performance.”

Its New Zealand subsidiary Bank of New Zealand (BNZ) did rather better, delivering a 13.5% rise in its half-year after-tax profits.

Investors responded positively, with NAB’s shares trading up modestly over the day.

NAB has been the worst-performing of the big four banks in Australia, with ASX’s peer analysis showing Commonwealth Bank of Australia, owner of ASB, had seen its share price fall least in the past 12 months.

ANZ will report on its half-year results on Friday, and Westpac will report on Monday.

The profitable Australian banks and their New Zealand subsidiaries may not be loved by their customers, data released by National Bank of Australia on Thursday shows, but at least people are not playing the nerve-wracking game of trying to spot the next one to fail like depositors in the United States.

After the failures of Silicon Valley Bank, First Republic, and Signature Bank, US eyes are on the Californian PacWest bank.

BNZ chief executive Dan Huggins thought the public’s reaction to the 13.5% increase in BNZ’s profit would be that they would feel pleased the country had a strong, and stable banking sector, especially as there had been banks failing overseas.