JB Hi-Fi lifts first-half profit

JB Hi Fi Home 1Consumer electronics retailer JB Hi-Fi has lifted first-half net profit 15.99 per cent (31.7 per cent on the prior corresponding period) to $110.4 million.

The retailer says total sales revenue for the six months to December 31 has also risen, by 23.59 per cent to $2.6 billion from $2.1 billion in the same period the previous year.

JB Hi-Fi will pay a fully franked interim dividend of 72 cents per share, up nine cents.

Hardware and services sales were up 15.8 per cent comparable sales up 12.6 per cent driven by communications, audio, cameras, accessories, computers and home appliances.

Online sales for HY17 grew 40.4 per cent on the pcp to $80.8 million – representing 3.8 per cent of total sales.

Software sales decreased 9.4 per cent

JB said it “it continues to focus on growing gross profit dollars, maintaining gross margin but not at the expense of sales”, with gross profit increasing 13.2 per cent to $496.5 million.

EBIT was up 21.5 per cent on the pcp to $165.6 million, driven by the strong sales growth and profit.

The electronics chain said its cost of doing business was down 13.9 per cent, down 26 bps on the pcp.

The results weren’t as rosy across the ditch for the retailer, with total sales down 1.7 per cent to NZ$125.1 million, with comparable sales down 11.2 per cent.

JB Hi-Fi’s management is keeping an eye on the New Zealand business after first-half earnings halved on this side of the Tasman as rising costs eroded the firm’s margins.

New Zealand earnings before interest and tax fell to $1 million in the six months ended December 31 from $2m a year earlier, the Melbourne-based company said on Monday.

“The overall performance in New Zealand is an ongoing focus for the management team,” JB Hi-Fi said.

Government figures show New Zealanders spent $3.1 billion on electrical and electronic goods retailing in the 2016 March year, up from $2.81b a year earlier.

The New Zealand arm has 16 stores, one of which was opened in the period, making it a small player for the wider group’s network of 302 stores. Net profit for the group rose 16 per cent to $A110.4m ($NZ118m) on a 24 per cent increase in sales to $A2.62b, which included about a month’s contribution from JB Hi-Fi’s recently acquired The Good Guys division.

The local division’s margins lagged behind the larger Australian division business with gross margins of 22.22 per cent and a cost of doing business ratio of 13.93 per cent.

The Good Guys business saw total sales rise 0.7 per cent to reach $263.1 million in December with comparable sales down 0.7 sales.

JB said it expects total group sales to be around $5.58 billion, with the electronics chain contributing $4.33 billion and The Good Guys $1.25 billion, with underlying NPAT to be in the range of $200 million to $206 million – an increase of 31.4 per cent to 35.4 per cent on the pcp.

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