2nd Quarter Sales to 31 July 2004

2nd Quarter Sales to 31 July 2004

The directors of Briscoe Group Limited announce that unaudited sales for the three months ended 31 July 2004 were $71.4 million, being 1.33% lower than the $72.3 million reported for the same quarter last year.

The gross margin percentage generated for the second quarter, as for the first quarter, was significantly ahead of the gross margin percentage for the same quarter of last year, however this was more than offset by higher operating costs, reflecting the impact of new stores opened.

Briscoes Homeware sales for the quarter decreased by 8.93% to $47.3 million, while Rebel Sport sales rose by 18.03% to $24.1 million. On a same store basis, Briscoes Homeware sales decreased by 11.81% while Rebel Sport sales were 1.19% behind last year.

On a same store basis, the Group’s sales for the quarter were 8.86% behind the second quarter for last year.

The relocation of the Briscoes Homeware store in Hastings to new premises in June and a new store opening in the Coastlands Shopping Centre, Paraparaumu, at the end of July, brought the number of Briscoes Homeware stores to 31 and increased total store area to 62,915 sq.m. Rebel Sport store numbers and store area remained unchanged at 18 and 37,174 sq.m, respectively.

The July quarter sales figures takes unaudited group sales for the six months ended 31 July 2004 to $138.7 million, a decrease of 1.59% on the $140.9 million reported in the first half of last year.

Rod Duke, Group Managing Director, said, “Whilst there has been a small decline in group sales, we are seeing a promising response to the strategic actions we have taken to re-position both the Briscoes Homeware and Rebel Sport brands.

“These strategic actions have included the scaling back of the frequency of discount events - replacing the sales programme with fewer but significant events, and initiating actions to improve stock ranging and improve customer service levels. The decision for Rebel Sport to obtain naming rights sponsorship of Super 12 rugby, generated tangible benefits through the quarter just ended.

“As detailed in my address at our AGM in May, profit for the first half of this financial year will be affected by reduced sales levels as well as by the additional costs associated with the nine new stores opened by the Group since the beginning of last year. The directors expect first half tax paid profit to be between $3.0 million and $3.5 million below the $9.8 million reported for the first half of last year.

“The half yearly result is scheduled for release by 6 September and this is expected to confirm that the business fundamentals remain strong despite the disappointing profit figure, which mostly occurred in the three months to 30 April.

“Recent months have shown a marked improvement in terms of the bottom line, with a particularly pleasing performance from Rebel Sport, in large part due to the strategic changes implemented.

“Gross margin percentage is significantly above last year, cash position is strong and stock levels have improved continually.

“Given that it is in the second half of the year that we generate approximately 60% of our sales and an even larger share of our annual profit, we continue to expect a satisfactory increase in sales for the full year and to recover most of the profit shortfall experienced in the first half of this year.”

ENDS

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