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Briscoe Group Posts Record Profit

Full Year Review

Annual Sales top $600 million for the first time

Highlights for the full year ended 28 January 2018
• Total sales $603.09 million, +3.47%
• Same store sales growth, +3.11%
• Gross profit $244.17 million, +2.01%
• Gross profit margin 40.49% (Last year 41.07%)
• EBIT $83.36 million, +4.43%
• NPAT $61.32 million, +3.20%, normalised +8.16% per below
• Final dividend 11.50cents per share, +4.55%
• Total dividend for the year 19.00 cents per share, +5.56%

Providing customers with an outstanding shopping experience both in its physical stores and online, together with a close focus on inventory management, has allowed Briscoe Group to once again post record results for the year to 28 January 2018.

Briscoe Group Managing Director Rod Duke said, “Net profit after tax (NPAT) of $61.32 million for the year (52 weeks) ending 28 January 2018, a 3.20% increase on the $59.42 million for the previous year (52 weeks), was a very satisfactory result in what had been a highly challenging year.

“If you look back at the past year, we had fires in Christchurch in February; a major flood in April; a relatively late start to winter across the country, with warmer than average temperatures in Auckland and the central North Island during key promotional periods in June; intense cold, snow and heavy rain in many parts of the country during July; and then the British & Irish Lions tour, which sucked up a big chunk of discretionary spending,” said Mr Duke.

“Given this background, we are pleased with the way our in-store teams and support functions have continued to drive growth and manage inventory throughout the year,” he said. Mr Duke said, “Last year’s reported NPAT of $59.42 million included one-off benefits totaling $2.7 million in relation to property sales in Hastings. Adjusting for these one-off items gives an increase in underlying NPAT of 8.16% on the 2016-2017 year.”

2017-2018 NPAT included dividends received of $5.21 million from the Group’s 19.8% shareholding in Kathmandu Holdings Limited. Mr Duke said, “Briscoe’s Board remained an interested observer of Kathmandu’s performance and of potential opportunities in the industry more broadly”.

2017-2018 earnings before interest and taxation of $83.36 million (previous year $79.83 million) were generated on sales revenue of $603.09 million, an increase of 3.47% on the $582.84 million reported in the previous year. Mr Duke said, “The small decrease in gross profit margin was a function of the intense competition across the retail sector and other competing claims on consumers’ discretionary spending”.

Expansion and enhancement of its Briscoes and Rebel Sport stores remained an investment priority for the Group, with $5.4 million invested in developing Group-owned property in Wellington City, Petone, Mt Albert and Silverdale. $6.4 million invested in the fit-out and refurbishment of new and upgraded stores, and more than $2 million invested in upgraded security camera systems, online platform improvements, enhancements to system software and hardware upgrades.

The Group was also well advanced on improvements to its online offering, with upgrades to its web platform underway, new fulfillment hubs in Whanganui and Hamilton up and running and plans to roll out a Click and Collect service, following a successful trial through the Botany homeware store. “We still believe that using the knowledge we have of our customers and our market to give people an enjoyable instore shopping experience, complemented by an efficient online offering, will allow us to maintain a competitive advantage over overseas-based internet retailers,” said Mr Duke. Group Chair Dame Rosanne Meo said, “This year’s results have shown that giving customers quality products and services and a focus on executing the basics well, is still a recipe for success. “There is no doubt the retail sector is at the sharp end of rapid changes in technology and society which will require retailers to identify and address specific strategic issues, particularly in relation to optimising the balance between their online and bricks and mortar offerings.

“On behalf of the Board, I would like to acknowledge the great work done by all staff to maintain Briscoe Group’s status as New Zealand’s top homeware and sporting goods retailer.”

Dame Rosanne announced that the directors have resolved to pay a final dividend of 11.50 cents per share (cps). The dividend is fully imputed and, when added to the interim dividend of 7.50 cps, brings the total dividend for the year to 19.00 cps, an increase of 5.56% over last year’s total dividend of 18.00 cps.

The final dividend will be paid on 29 March 2018. The share register will close to determine entitlements to the dividend at 5 pm on 26 March 2018.

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