The benefits of marketing yourself
By Murray Brown, Senior Portfolio Manager, New Zealand
05 September, 2016
Many of you will know that our NZ Growth Fund has been a long term investor in the jeweller — Michael Hill International. Whilst we’ve been delighted with their overall long term performance, their shares had languished until recently, performing below the broader NZ equity market for the past two years.
Cue a potential listing on the Australian Stock Exchange (ASX). The company decided to market itself the way other listed companies do. It’s commonplace now to see post results conference calls, subsequent group meetings with smaller institutions, and one-on-one meetings with more informed managers (like Fisher Funds). Typically the CEO and CFO make themselves available to answer questions about the results and will repeat this exercise in Australia and often in other offshore markets as well. It is a commitment made by the company to keep current and potential investors fully informed, and is repeated every six months.
With Michael Hill International seeking shareholder approval to change The Main Board listing from NZX to ASX, the company actively visited Australian and New Zealand institutions in the lead up to the shareholder vote to make current and potential investors aware of its many attributes. Further, it made a commitment to make this a feature of its investor relations programme going forward.
The end result is that the shares are up a staggering 60%+ since the end of March this year. Whilst some will argue that the re-rating of its shares are a function of deciding to list in Australia, we believe it is because it has finally marketed itself properly to a wider group of investors and made sure that existing shareholders fully understood the company. As meaningful shareholders in Michael Hill International, we are delighted with the outcome and always knew that this is a gem of a company.