Amid trading on what was a lacklustre and at times grumpy day on the market, JB Hi-Fi stood out with a 12% rise in share price, not earnings, which surged 56%.
But that wasn't as impressive a result as that of Leighton, which was savaged by a nervous market.
JB Hi-Fi shares ended at $11.35, up $1.23, after hitting a high of $11.50.
Go figure.
And yet in the reaction to the JB Hi-Fi result, there was no recognition from the market that the Reserve Bank is taking aim at retailers like them, selling high value consumer goods, in its attempts to slow the economy and drop inflation.
JB Hi-Fi (JBH) said its 2007 net profit finished at $40.4 million from $25.8 million in 2006, which was better than company's recently upgraded guidance of a 43%-51% profit rise to the range of $37-$39 million.
Analysts expected net profit of $38.4 million, so a market-beating outcome on all counts.
EBIT was $65,534,000 up from $44,537,000 last year and the resulting EBIT margin was 5.1%, up from 4.7% for 2006.
The market's reaction was given impetus with the comment from the company that sales in the new business year to date (the first six weeks) have continued the strong momentum from the end of the June year.
JBH said it saw sales in the year to June 2008 rising 33%.
Sales in 2007 reached $1.282 billion (2006 $946 million) so if the forecast is maintained; JBH would be looking at sales hitting $1.7 billion. Same store sales growth was 11.4%.
The company said its cost of doing business fell to 16% from 17.1% in 2006, which helps explain why earnings grew so sharply: the company not only grew sales but kept selling costs firmly under control.
JB Hi-Fi chief executive, Richard Uechtritz, said the lower cost of doing business had allowed the company to shift its product mix and improve its earnings margin.
The company said that gross margin was at 22.1% (2006 22.5%) "Notwithstanding the high growth of lower margin categories like games and computers in 2007. Our lower cost of doing business has allowed us to manage this shift in product mix and support our everyday low pricing philosophy whilst improving our earnings margin".
Mr Uechtritz said. "Whilst we believe we have the lowest cost base in the industry, we continue to focus on ways of improving even further".
"We are delighted with this strong result. Our unique and technology-focused retail model is performing strongly,'' Mr Uechtritz said in a statement accompanying the profit report.
"We should continue to benefit from strong comparable store sales, many new store opportunities, a lower cost of doing business and better buying power this year.''
Mr Uechtritz said the company's recent move into the computer and telecommunications markets should ensure that the company has many more years of strong growth.
JB Hi-Fi said it expects to open about 16 new stores in Australia and four in New Zealand in fiscal 2008. It had 77 stores in Australia and 12 in New Zealand at the end of June.
The company said sales in all product categories were solid; with games, DVD, visual, portable audio and computers driving strong comparable store sales growth, together with the maturing of recently opened stores.
The company has declared a fully franked dividend of 6.0 cents per share (2006 final 4 cents) an increase of 50%, to be paid on 11 September 2007.
