Briscoe posts record first half profit

Online channels are approaching 9% of total sales for New Zealand's largest listed retailer Briscoes Group, who have announced a record half-year net profit after tax of $29.34 million.
Managing director Rod Duke says despite the competitiveness of the retail environment, the retailer is satisfied with the sales and profit achieved for the first six months.

New Zealand's largest listed retailer, Briscoe Group, has announced a record net profit after tax of $29.34 million for the half-year ended July 29.

That record comes from strong sales growth across its homeware and sports goods stores and online –  a $760,000 rise on last year’s $28.58m half-year result.

Earnings before interest and tax increased 3.8% to $40.62m compared to $39.13m for the same period last year.

The earnings were generated on sales revenue of $293.2m compared to the $281m last year. On a same-store basis, the group’s sales for the half-year were 2.46% ahead of the same period last year.

Homeware sales increased 4.58% to $186.70m, and sporting goods sales increased 3.85% to $106.5m. On a same-store basis, homeware sales increased by 2.28%, while sporting goods sales increased by 2.8%.

Managing director Rod Duke says, despite the competitiveness of the retail environment, the retailer is satisfied with the sales and profit achieved for the first six months.

“We continue to experience excellent growth through our online channels which are now approaching 9% of total group sales.”

The directors have resolved to pay an interim dividend of 8cps, up on last year’s interim dividend of 7.5cps.

Briscoe Group shares fell 2c to $3.48 after the announcement.

Testing environment

Mr Duke acknowledges the economic outlook for the second half remains uncertain, with flagging consumer confidence, increased industrial action, record-high fuel costs, increased wage pressures and a lower New Zealand dollar, all factors which will test retailers’ ability to maintain margins.

He says the company is addressing any additional costs as they arise, including any employee entitlements and provisioning appropriately.

“Despite these challenges we are confident that we have the right programmes to continue to maintain market share and to deliver the quality products, service and shopping experience to ensure improved bottom line profit and returns to shareholders.”

Focus on Kathmandu

During the six months, it received a dividend of $1.71m from its investment in Kathmandu Holdings.

Due to its participation in the recent equity raising and the subsequent share purchase plan, its investment in Kathmandu now represents a shareholding of 18.9%.

“As the largest single shareholder, we continue to note the significant improvement in Kathmandu’s trading performance, in particular, its most recent full-year result,” Mr Duke says.

Kathmandu shares last traded at $3.19 and have gained 48% in the past year.

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