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G3 ahead of margin targets in third qtr

NZ Newswire logoNZ Newswire 29/01/2017 Sophie Boot

G3 Group, the NXT-listed mail operations and document manager, was ahead of its annual margin targets in the third quarter of its financial year, though it remains behind on its inventory turnover target.

The Auckland-based company reported gross margin of 26.5 per cent and an operating margin of 23.8 per cent in the three months ended December 31.

The firm provides quarterly updates on particular operating measures relevant to its business under the NXT market's disclosure regime, which is less onerous than for the NZX's main board.

That took year-to-date gross margin to 24.2 per cent, and the operating margin to 22 per cent, both above G3's annual target of 22 per cent and 20.2 per cent respectively.

"As in Q2, margins in Q3 are strong due to the favourable mix of higher margin document management revenues vs lower margin business mail," G3 said.

"We expect to meet all key operating milestone (KOM) targets for the year ended March 31, 2017."

G3's inventory turnover, its third KOM, was 43.1 days in the quarter, an improvement from the second quarter's 63.5 days. For the year to date, sales are taking 34.8 days, slower than the 22 days targeted for the 2017 year.

In the six months to September 30, 2016, G3 reported net profit rose 45 per cent to $1.7 million, on a 37 per cent lift in sales to $29.9 million.

The stock recently traded at 62 cents and has fallen 25 per cent in the past year.

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