Mitre 10 annual sales rise 10% on back of Auckland, Christchurch activity
Mitre 10, the hardware chain, said full-year sales rose 10 percent to exceed $1 billion for the first time, driven by demand in Christchurch and Auckland.
Sales rose to $1.04 billion in the year ended June 30, the retailer said in a statement. The chain increased its distributions paid to members 11 percent to $58 million, while share capital increased 5.1 percent to $46 million.
"Our distribution to our members has grown at a higher rate than our sales number - that tells me that our margins are being maintained or improved and we have control on costs," chief executive Neil Cowie told BusinessDesk. "From that perspective we're in great shape as a business."
New Zealand is in the midst of a construction boom, as the Canterbury rebuild kicks into full swing and a bubbling housing market in Auckland, fueled by a shortage of supply, has seen increased home building to meet demand. Meanwhile, rising real estate prices in Auckland also meant more people were opting to "do-it-yourself" renovations rather than re-enter the housing market.
"We're seeing it really across the board, if you look at renovations you'll see things like bathrooms and kitchens and the typical DIY hardware stuff is also showing good growth," Cowie said. "As people feel more confident in the equity in their homes they would be more inclined to spend.
"DIY is on the up, people seem more confident and they're spending on their homes and renovations are up," Cowie said. "When times are tough you don't repaint the lounge when you don't need to, you don't paint the deck when you don't need to, you don't upgrade the garden"
Competition in the construction sector has come under scrutiny with Fletcher Building, New Zealand's largest listed company, being accused of having an effective monopoly in New Zealand, controlling both supply of building products and construction, which has been blamed for rising building costs and subsequently house prices.
However, Cowie said the sector was "incredibly competitive".
"We're optimistic in terms of our industry" Cowie said. "We still have lots of opportunity to grow, so next year we've got three stores planned around the country, we'll complete our network plan we'll keep focusing our strategies to get more efficiency through our organisation but the general outlook for us would be cautiously optimistic. Certainly if you're in Auckland and Christchurch you'd be pretty happy."