FYI | May 19 2020
–The below is a company sponsored announcement–
If there is one company the COVID-19 pandemic looks to have been kind to it is Harris Technology Group Limited ((HT8)).
The long-standing online retailer more than doubled its sales in March as it became a preferred company to fit out home offices and homeschooling setups as daily life shifted was now undertaken at home, and for the most part at home only.
Between its own e-commerce site and its presence on Amazon Australia, Catch, Kogan and eBay, Harris generated $1.6 million in sales in March 2020, compared to $716,000 in March 2019.
“Total revenue for the March 2020 quarter is $3.4 million compared to the March 2019 quarter of $2.3 million,” said Harris CEO Garrison Huang.
“Management attributes the increase in sales to strategically leveraging off the marketing and distribution power of the major e-commerce platforms such as Amazon Australia, [and] higher demand driven by the establishment of home offices and homeschooling by consumers as a result of the current government requirements.”
Huang said the company “will continue to improve sales with all the major line platforms and also from our own website.”
While the company was able to capitalise on the shift to homeschooling and employment, it also had its sights set on another essential service during this pandemic.
By mid-April, Harris announced that unaudited revenue for the March 2020 quarter had significantly increased and was expected to be sustained at similar levels for the foreseeable future.
It was at that time that the group established its Pro-Hygiene range of products including facemasks, hand sanitiser gels and alcohol wipes.
The company sold an initial 30,000 face masks in March, and a new shipment of 200,000 TGA approved face masks were imported for sale in late April.
Sales of Pro-Hygiene products alone for April 2020 were $1.05 million (unaudited) with strong gross margins of 20%.
Consequently, in just one month Pro-Hygiene sales have exceeded the June quarter guidance by 150%.
Harris has expanded its product range by securing the non-exclusive Australian distribution rights for the “Tender Kiss” brand of alcohol tissues from Guangzhou Baihua Sanitary Products Co.
The tissues are being imported from China and sales of the brand will commence this month.
Harris is confident that supplies of products in China should continue, and the distribution rights are ongoing with no specific termination date.
A national network of sales agents to sell Pro-Hygiene products has been established, and one agent has been appointed for each state of Australia.
Revenue from the Pro-Hygiene range for the June 2020 quarter was estimated to be $400,000.
Revenues could be further strengthened as Harris has been authorised by China’s Jointown Pharmaceutical Group (one of the leading medical supply and distribution companies in China) to distribute its Jointown and Aumacom face masks.
E-commerce business tracking well overall
Sales revenue for April 2020 for both the IT/CE (Consumer Electronics Division) and the Pro-Hygiene division was just over $2.7 million.
This compares with sales revenue (unaudited) for the full March 2020 quarter of $3.4 million and sales for the April – June 2019 quarter (audited) of $2.23 million.
Having already eclipsed June 2019 quarter sales, as well as sales generated in the March 2020 quarter in just one month, Harris is positioned to finish the fiscal year strongly.
Management will be providing a profit update in the coming weeks, which based on recent developments could be a share price catalyst.
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