Strong April sales trigger 30% increase in Harris’ share price
Harris Technology Group Limited (ASX:HT8) provided a promising trading update on Tuesday, resulting in its shares increasing more than 30%.
In 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 the Pro-Hygiene range of products including facemasks, hand sanitiser gels and alcohol wipes.
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.
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.
Revenue from the Pro-Hygiene range for the June 2020 quarter was estimated to be $400,000.
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.
E-commerce business also tracking while
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.
Harris had another record-breaking month, generating substantial sales growth through its IT/CE e-commerce business in April 2020. Unaudited sales revenue was $1.68 million.
Management will be providing a profit update in the coming weeks, which based on recent developments could be a share price catalyst.