Australian discount consumer electronics chain JB Hi-Fi's New Zealand [ASX: JBH] sales edged up 0.9 percent in the 2014 financial year, lagging the group's gains, though local earnings still climbed 35 percent.
New Zealand sales rose to $211.4 million in the 12 months ended June 30 from $209.4 million a year earlier, and were up 0.8 percent on a comparable sales basis, the Melbourne-based company said. That lagged the 5.3 percent increase in group sales to A$3.48 billion for a 10 percent increase in net profit to A$128.4 million, or A$1.284 per share.
Still, the New Zealand unit boosted earnings before interest and tax 35 percent to $3.1 million, fattening its Ebit margin by 37 basis points to 1.5 percent, "as we continue to build the JB Hi-Fi brand" and widening the gross margin 33 basis points to 18 percent by lifting market share, it said in a statement to the ASX.
In recent years New Zealand's consumer electronics market has been characterised by tight competition and cheap imports driving down prices. Goverment data shows consumer prices for telecommunication equipment fell 25 percent in the year ended June 30, while audio visual equipment prices were down 9.8 percent. Separate retail trade figures show the value of consumer spending on electrical and electronic goods rose 7.6 percent to $634 million in the March quarter, while the volume of goods sold climbed 16 percent.
JB Hi-Fi is still building its presence in New Zealand with 13 stores as at June 30, and plans to open another two in the 2015 financial year. That compares to 61 stores from Australasia's biggest electronic goods retailer, Dick Smith Holdings. JB Hi-Fi's New Zealand Ebit margin is skinnier than its 5.5 percent group margin and the 4.7 percent margin Dick Smith's local network was operating in during the six months ended Dec. 31.
Group chief executive Richard Murray said overall July sales were impacted by a decline in tablet sales, though gross margins were wider than a year earlier.
JB Hi-Fi anticipates annual sales of A$3.6 billion in the 2015 financial year, with eight new stores set to open, and 26 existing outlets to be converted to JB Hi-Fi Home stores.
The board declared a total dividend of 84 Australian cents per share, payable on Sept. 5, and up from 72 cents a year earlier. The company also plans to undertake an on-market share buyback of up to 645,765 shares at a cash cost of about A$12.5 million.
The ASX-listed shares fell 1.8 percent to A$19.37 on Friday, and have shed 9.9 percent this year.