Beacon Lighting reported a nearly 10 per cent year-on-year increase in its first-half net profit after tax on Tuesday, despite a still sluggish housing market, subdued consumer confidence and unrelenting bushfires affecting many of its customers across the country.
The specialty retailer’s profit was driven largely by one-off events, including the $28 million sale and leaseback of its Parkinson distribution centre outside Queensland last month, which resulted in a $5.4 million profit after tax, and the implementation of a new lease accounting standard last year, which resulted in a $500,000 profit after tax.
These gains were partially offset by the closure of the company’s solar energy business, Beacon Energy Solutions, which resulted in a $2.3 million loss after tax in FY20, compared to a $100,000 profit in FY19.
Excluding these one-off events, however, Beacon’s underlying net profit fell more than 20 per cent from $11.5 million in the first half of FY19 to $9 million in the first half of FY20.
The retailer attributed this to a weaker Australian dollar relative to the US dollar, and its inability to immediately adjust prices during a period of soft consumer confidence.
While Beacon said trading conditions have shown some improvement in FY20, said they remain inconsistent, with consumer confidence still subdued, bushfires and varied weather conditions continuing to impact customers and a slow but improving housing market.
“The Beacon Lighting Group continues to hold the dominant position in the Australian lighting market and is well placed to benefit from improved housing conditions in H2 FY2020,” the company said in a statement to the ASX.
The company’s net debt was $7.7 million at the end of the first half of FY20, down from $32.6 million at the end of FY19.