New Zealand Professional Investment Services Firm

Forsyth Barr

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.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<ul><li>We initiate coverage on Briscoe Group (BGP) with a NEUTRAL rating and a NZ$4.95 target price.</li><li>We recognise that BGP is a high-quality retailer and are attracted to its ability to drive strong returns through-the-cycle.</li><li>Despite this, we view the risk–reward at current levels as balanced, given: (1) domestic operating conditions are likely to remain soft through 2025; (2) competition will remain elevated as IKEA opens later this year; (3) BGP is a mature retailer with a lean operating cost base, providing limited levers to offset cyclical challenges; and (4) its investing NZ$100m into its distribution centre (DC) project, which will consume free cash flow over the next two years, with margin benefits longer-dated. </li></ul>

We initiate coverage on Briscoe Group (BGP) with a NEUTRAL rating and a NZ$4.95 target price.We recognise that BGP is a high-quality retailer and are attracted to its ability to drive strong returns through-the-cycle.Despite this, we view the risk–reward at current levels as balanced, given: (1) domestic operating conditions are likely to remain soft through 2025; (2) competition will remain elevated as IKEA opens later this year; (3) BGP is a mature retailer with a lean operating cost base, providing limited levers to offset cyclical challenges; and (4) its investing NZ$100m into its distribution centre (DC) project, which will consume free cash flow over the next two years, with margin benefits longer-dated. 

Briscoe Group - Quality Retailer at Full Price—Initiate NEUTRAL