New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Briscoe Group's (BGP) 2Q26 sales update was solid from a sales perspective, but gross margins remained under significant pressure.</li><li>Management commentary suggested that margin pressure continues to be a key challenge.</li><li>We view the earnings risk from here as skewed to the downside, and with BGP trading on a 20x 12-month forward PE multiple — more than three standard deviations above its long-run average — the risk of a material de-rating remains elevated.</li></ul>

Briscoe Group's (BGP) 2Q26 sales update was solid from a sales perspective, but gross margins remained under significant pressure.Management commentary suggested that margin pressure continues to be a key challenge.We view the earnings risk from here as skewed to the downside, and with BGP trading on a 20x 12-month forward PE multiple — more than three standard deviations above its long-run average — the risk of a material de-rating remains elevated.

Briscoe Group 2Q26 Trading Update — The Gross Profit Game

<ul><li>Briscoe Group (BGP) has been downgraded from NEUTRAL to UNDERPERFORM following a significant rally in its share price, driven by its inclusion in the NZ50.</li><li>The current valuation of BGP is unsustainable, as it trades at a high forward PE ratio, requiring earnings to increase significantly to justify this valuation.</li><li>Risks are skewed to the downside due to a challenging domestic consumer environment and potential competitive pressures from IKEA's upcoming entry into the market.</li></ul>

Briscoe Group (BGP) has been downgraded from NEUTRAL to UNDERPERFORM following a significant rally in its share price, driven by its inclusion in the NZ50.The current valuation of BGP is unsustainable, as it trades at a high forward PE ratio, requiring earnings to increase significantly to justify this valuation.Risks are skewed to the downside due to a challenging domestic consumer environment and potential competitive pressures from IKEA's upcoming entry into the market.

Briscoe Group Nothing on Sale; Down to UNDERPERFORM

<ul><li>Briscoes Group's annual shareholder meeting outlined key medium-term initiatives tied to the distribution-centre project.</li><li>Execution risk and costs of the distribution-centre project are not included in current estimates but present potential upside.</li><li>Near-term operations remain challenging with a projected 10% decline in 1H26 NPAT compared to the prior year.</li></ul>

Briscoes Group's annual shareholder meeting outlined key medium-term initiatives tied to the distribution-centre project.Execution risk and costs of the distribution-centre project are not included in current estimates but present potential upside.Near-term operations remain challenging with a projected 10% decline in 1H26 NPAT compared to the prior year.

<ul><li>Briscoe Group reported a mixed 1Q25 trading update, with slightly softer sales but a better gross margin outlook than anticipated.</li><li>A target to maintain gross margin and profitability at similar levels to FY25, with a slight recovery in gross margins noted.</li><li>Upcoming annual shareholder meeting on 15 May 2025 expected to provide a strategic update, including on the NZ$100m distribution centre in Wiri.</li></ul>

Briscoe Group reported a mixed 1Q25 trading update, with slightly softer sales but a better gross margin outlook than anticipated.A target to maintain gross margin and profitability at similar levels to FY25, with a slight recovery in gross margins noted.Upcoming annual shareholder meeting on 15 May 2025 expected to provide a strategic update, including on the NZ$100m distribution centre in Wiri.

Briscoe Group - 1Q26 Trading Update—Cooling Down

<ul><li>Accent Group has entered a strategic agreement with Frasers Group to launch and operate Sports Direct in Australia and New Zealand, potentially impacting Briscoes Group's Rebel Sport business.</li><li>EPS impact on Rebel Sport NZ is estimated to be -3% to -7% by FY33, with store roll-outs beginning in Australia.</li><li>BGP is trading slightly above its long-run average with a 14x 12-month forward PE, under a NEUTRAL sentiment.</li></ul>

Accent Group has entered a strategic agreement with Frasers Group to launch and operate Sports Direct in Australia and New Zealand, potentially impacting Briscoes Group's Rebel Sport business.EPS impact on Rebel Sport NZ is estimated to be -3% to -7% by FY33, with store roll-outs beginning in Australia.BGP is trading slightly above its long-run average with a 14x 12-month forward PE, under a NEUTRAL sentiment.

Briscoe Group - Sports Direct Stepping on Toes

New Zealand

Briscoe Group Limited owns and operates the Briscoes Homeware chain of retail stores and the Rebel Sport chain of retail sporting goods stores throughout New Zealand, under a limited franchise agreement with Australian company Rebel Sport Limited.

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Briscoe (BGP NZ)

Briscoe Group 2Q26 Trading Update — The Gross Profit Game

Briscoe Group's (BGP) 2Q26 sales update was solid from a sales perspective, but gross margins remained under significant pressure.

Forsyth Barr

Briscoe Group Nothing on Sale; Down to UNDERPERFORM

Briscoe Group (BGP) has been downgraded from NEUTRAL to UNDERPERFORM following a significant rally in its share price, driven by its inclusion in...

Forsyth Barr

Briscoe Group - Scanning Ahead

Briscoes Group's annual shareholder meeting outlined key medium-term initiatives tied to the distribution-centre project.

Forsyth Barr

Briscoe Group - 1Q26 Trading Update—Cooling Down

Briscoe Group reported a mixed 1Q25 trading update, with slightly softer sales but a better gross margin outlook than anticipated.

Forsyth Barr

Briscoe Group - Sports Direct Stepping on Toes

Accent Group has entered a strategic agreement with Frasers Group to launch and operate Sports Direct in Australia and New Zealand, potentially...

Forsyth Barr

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