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Briscoe Reports Half Year Profit $9.86 million

Half Year Profit $9.86 million

The directors of Briscoe Group Limited announce a net profit after tax (NPAT) of $9.86 million for the six months ending 31 July 2003. This compares to $9.61 million for the corresponding period a year ago. The half year results are unaudited.

The earnings were generated on sales of $140.90 million, up 10.00% on the $128.09 million generated in the same period last year.

The directors have declared a fully imputed interim dividend of 2.75 cents per share. Books will close to determine entitlements on the 19th September 2003 at 5pm and payment will be made on the 25th September 2003.

The directors consider the NPAT for the first six months to be satisfactory, having regard to the increased competitiveness in the retail sector compared to last year, lower levels of interest income at $0.82 million ($1.03 million same period last year), the provisioning of a $0.18 million tax expense against the amortisation since April 2003 of the final franchise fee payment to Rebel Sport Australia, and the lower number of trading days in the first half of this year.

The interest income reflects lower levels of cash held through the current period as a result of property purchases made through the second half of last year and also the final franchise fee payment made to Rebel Sport Australia in April.

The payment of A$3 million to Rebel Sport Australia was the final franchise fee payment covering the two year period ending 31 March 2005 and is being amortised over the same period. At the end of this two year period the Group will own the rights to the “Rebel Sport” name and trademarks within the New Zealand territory and there will be no further licence fees payable. As a result of the move to calendar month end reporting, the first half this year comprised four fewer trading days than last year’s first half.

The directors note that earnings before interest and taxation (EBIT) rose 7.38% to $14.30 million for the six months ended 31 July 2003 from $13.31 million in the previous year.

The gross margin percentage was 31.34% for the first six months (31.69% for the same period of last year).
Despite the increased competitive activity experienced in the first six months of this year, the directors are confident that the sales growth experienced in the first half will continue in the second six months.

In the period under review, sales at Briscoes Homeware increased by 7.67% from $91.41 million to $98.43 million and sales at Rebel Sport increased 15.80% from $36.68 million to $42.47 million. New Rebel Sport stores in Nelson and Hastings opened during April and July respectively, increasing the number of Rebel Sport stores to 14 and increasing the total store area to 29,581 sqm from 25,661 sqm.

Briscoes Homeware store numbers and store area remained unchanged at 28 and 56,382 sqm respectively.

On a same store, same days basis, Briscoes Homeware sales increased by 9.67%, while Rebel Sport sales increased by 7.78% over the first half of last year. Adjusting for these four days and on a same store basis, the Group’s sales for the six months ended 31 July 2003 were 9.13% ahead of the same period last year.
Rebel Sport will open a new store in Lower Hutt later this month and has recently completed an extension to its Botany store. Briscoes Homeware completed the refurbishment of its Palmerston North, Gisborne and Henderson stores during the first half period and expects to open new stores in Lower Hutt later this month and Cambridge by the end of the financial year, as well as refurbishing its Napier store.

Since July 2002, the group’s financial position has remained strong and as at 31 July 2003, the group had cash in the bank or on deposit of $26.89 million, and no borrowings.

Inventory levels were $48.34 million and accounts payable were $23.99 million (compared to $43.26 million and $23.54 million respectively a year ago) reflecting increased trading levels and also as a result of the opening of three new Rebel Sport stores since July last year.

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