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Half Year Profit up 51%

Half Year Profit up 51%

Thursday, 1 September 2005,

1 September 2005

Half Year Profit up 51%

The directors of Briscoe Group Limited announce a net profit after tax (NPAT) of $10.15 million for the six months ending 31 July 2005. This compares to $6.72 million for the corresponding period a year ago and represents an increase of 51.11%. The half year results are unaudited.

The directors have declared a fully imputed interim dividend of 3.00 cents per share. Books will close to determine entitlements at 5pm on 19 September 2005 and payment will be made on 26 September 2005.

The earnings were generated on sales of $154.37 million, an increase of 11.33% on the $138.66 million generated in the same period last year. Gross margin percentage rose from 33.20% to 35.19%, continuing the enhancement to margin experienced last year through the previously reported reduction in the frequency and depth of discount events, as well as operational improvements with regard to stock levels, product ranging and shrinkage.

In the period under review, sales at Briscoes Homeware increased 10.69% from $92.51 million to $102.41 million and sales at Rebel Sport increased 12.61% from $46.15 million to $51.97 million.

On a same store basis, Briscoes Homeware sales increased by 6.49%, while Rebel Sport sales increased by 5.62%.

Rod Duke, Group Managing Director, said: “The strategic marketing changes implemented last year are now impacting significantly for us, in a market which remains intensely competitive.

Initiatives, including Rebel Sport’s continued sponsorship of Super 12 Rugby, the introduction of additional quality branded product in both Briscoes and Rebel Sport, together with our continued commitment to growing both of the existing brands through new store opportunities, have all helped to deliver improved sales growth and margins at higher and more acceptable levels.”

The opening of the Briscoes Homeware store in Ashburton late in July brought the number of Briscoes Homeware stores to 34 and increased total store area to 70,348 sq.m. Rebel Sport numbers and area remained unchanged for the half year at 20 and 40,985 sq.m, respectively.

Further stores will be opened in the second half of this year. Briscoes Homeware will open new stores in Te Rapa, Hamilton and Lyall Bay, Wellington during September and October respectively. Rebel Sport will relocate its Hamilton store to new premises in September.

Since July 2004, the Group’s financial position has remained strong and at 31 July 2005 there was cash in the bank or on deposit of $40.32 million, and no borrowings.

Inventory levels at 31 July 2005 were $48.37 million, representing an increase of $2.12 million on the same time last year. The increase reflects the five new stores opened by the Group in the previous twelve months but also represents the significant operational focus on improved stock management during the past year.

Rod Duke, said: “We are delighted with the start we have made to the year with this first half result and remain cautiously optimistic in terms of the second half. The first half of last year was a particularly disappointing period for us so we expected significant improvement on that this year. While we are confident of further improvement to the bottom line, we don’t expect the increase over last year for the second half to be as significant as that achieved for the first six months.

Thursday 1 September 2005

ENDS

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