Convenience chain The Reject Shop saw net profit jump 46.5 per cent to $16.3 million during the last six months despite sales remaining sluggish, falling 0.3 per cent to $434.3 million.
Comparable sales stayed flat during the half year to December, ignoring the stores that were forced to close due to ongoing virus restrictions across Victoria, New South Wales and South Australia during the period.
“The [first half] result and the progress made during the ‘fix’ phase is pleasing, particularly given the strategic and operation change that has occurred in the business over the past 12 months within an uncertain operating environment,” said The Reject Shop chairman Steven Fisher.
The business hasn’t received any JobKeeper support, and is aiming to complete “fixing” the business by the end of FY21, largely through cost reduction driven by business simplification and operational efficiency.
“There is further work to be done to ‘fix’ The Reject Shop and, once the cost base is optimised, we expect to be well-place to pursue longer-term growth via store network expansion and by growing our online presence,” said chief executive officer Andre Reich.
“While the profit growth achieved during the first half is pleasing, the operational environment remains uncertain for the second half with ongoing challenges associated with Covid-19 and the international supply chain.”
The business said it will continue to focus on reducing its costs in the second half, but that the continued impacts of the Covid-19 virus are impacting store footfall in CBD locations and shopping centres, with two underperforming stores shuttered during the period.
The business aims to open a further four stores by the end of the financial year.