Page 7 - NZPM Annual Report 2020

coming from sales being more heavily weighted to complemented our existing pwGO App to support our
the competitive urban centres, and from general mobile device and on-line trading capability when the
market pressures. Our strategy to offset these long- alert level was lowered.
term downward influences continues through growth
of our own brand and exclusive products where It has been great to receive feedback about our
we capture both an import and wholesale margin ‘people first’ approach adopted during the Alert Level 4
as well as incremental gains from procurement, lockdown, and the effectiveness of the adaptions that
category management and targeted customer pricing were implemented as the business moved back to a
adjustments. new way of working with all our stakeholders.

While currently modest in terms of our overall product BUSINESS REINVESTMENT
portfolio, the growth of our own brand and exclusive
products was again approximately twice the growth NZPM continues to reinvest across the company and
of our overall sales. This growth strategy is a core in a range of initiatives to improve the quality and
value proposition for both the co-operative and capability of our business network.
our customers through increased margins to both Plumbing World continued its network expansion by
parties and a differentiated product offering to the opening new branches in Kumeu (Auckland), Bream
market. The smooth transition of both the Metrix and Bay (Northland), Onehunga (Auckland) and Twizel,
Plumbing World teams into a larger shared warehouse and the Queenstown branch was relocated into a new
facility at Wiri during the year is a further enabler purpose-built property with a premium showroom and
for future expansion of our LeVivi and Metrix import an expanded trade area. These branches are all in high
programmes, and will allow us to accelerate our new growth zones which improve our ability to efficiently
Tiva branded back-of-wall products.
service existing and new customers. We are also
The ongoing growth of the co-operative meant that nearing completion of a major upgrade of the property
our cost base also needed to expand. Costs continue that we purchased in Kingsland, Auckland. When
to be very well controlled and are regularly reviewed for complete, the property will replace our leased premises
effectiveness and value to the business. that we have occupied for over 50 years in Grey Lynn.
The consolidation of our Metrix and Plumbing World
IMPACT OF COVID-19
distribution facilities into a single larger property in Wiri,
Like most companies, NZPM was heavily impacted Auckland supports our strategy to grow NZPM’s imports
by the actions required to combat the COVID-19 programme to adjacent new products and to expand
pandemic. During the 20 business day Alert Level 4 into new categories.
lockdown from 26 March to 28 April 2020, NZPM only We continued to embrace digital technology, and
supplied essential services. Based on our average having delivered the pwGO mobile App during the
daily sales for the preceding two months and the year, the on-line pwGO.co.nz portal was released
month after the lockdown period, NZPM estimates that immediately after year-end. These new technologies
revenue was reduced by $18 to 20 million.
are designed to support efficient customer services
We were able to partially offset the margin loss by including ordering, pricing and invoicing. We will
decreasing a range of variable costs and through progressively add new services into these and other
negotiation of rent reductions for most of our leased technology tools to bring further productivity and
properties. We were also eligible for and received efficiency gains to both NZPM and our customer supply
a government wage subsidy which allowed us to chains.
continue to pay all our staff at full contracted rates.
Planning and testing are well advanced to move our
Our modern technology infrastructure allowed a branch network from our current ProStix software to the
large portion of our staff to work remotely during the newer Windows based Frameworks system during the
lockdown to serve our customers for essential services, first half of this financial year. This upgrade will provide
operate our support and development functions, a range of opportunities to drive further operating
communicate with customers, suppliers and staff and efficiencies.
operate a substantial staff training programme. The
release of the pwGO.co.nz website during lockdown

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NZPM GROUP LIMITED ANNUAL REPORT 2020