Some glimmers of what is expected to be a flood of good news from the booming retail sector.
Fashion and homewares retailer Country Road said yesterday that first half pre-tax profit will be materially higher than last year, after sales grew by 35%.
Country Road told the ASX that its total sales for the six months ended December 31 rose to $145.6 million, from $107.9 million.
The company had said three months ago that it expected profit before tax for the first half to "grow" on the previous corresponding half year.
Now it says that "given the strong trading performance in November and December, the company now anticipates that profit before tax for the six months to 31 December 2007 will be materially higher than for the previous corresponding half year".
Its first half result will be released in mid-February.
Country Road said first half sales had benefited from the replacement of wholesale sales with retail sales, under new concession arrangements in Myer and David Jones department stores.
But retail store sales alone grew by 21.5% to $110 million, a performance that was well above the market average for the period, while concession sales were $35.6 million.
"The sales performance is a continuation of the strong growth achieved over the previous 18 months," chief executive Ian Moir said in the statement.
"The combination of lower prices and improved fashionability is proving a winning combination.
"It is particularly pleasing that every division of the business delivered double digit sales growth for the half," he said.
Country Road is controlled by South African interests with a small holding retained by Solomon Lew.
And in a different segment of the market, the leading "carbo retailer", Retail Food Group Limited issued an upbeat upgrade for itself after an active few months of acquisitions.
RFG said that based on unaudited accounts, the company's net after tax profit "for the six months ending 31 December 2007 will significantly exceed (by greater than 15%) the NPAT result achieved for the FY2007 corresponding period.
"The Company's NPAT increase on the previous corresponding period is directly attributable to the previously announced acquisitions in the second half of last calendar year, comprising Brumby's Bakeries and Michel's Patisserie.
"Contributing to this result has also been a significant increase in total network franchise outlet revenue due to strong organic new outlet growth and same outlet sales increases across the Donut King, bb's cafe, Brumby's Bakeries and Michel's Patisserie franchise systems."
CEO Tony Alford was quoted as saying "the company's business and franchise systems are performing well, with the first half results consistent with expectations and previous guidance. Of particular note, 41 new outlet commissioning's were achieved during the period across the Donut King, Brumby's Bakeries, Michel's Patisserie and bb's café franchise systems – representing in excess of 50% of the full year new outlet growth forecast – whilst at the same time completing two significant acquisitions.
"Based upon the trading and operational performance to date, we maintain a positive full year outlook for RFG as the Company progresses the physical integration process of the Michel's Patisserie business and franchise system during the second half of FY2008."
Results for the six month period ending 31 December 2007 will be announced to the market in late February 2008 at which time further commentary will be provided with respect to the provisional TMGA results for the 1HFY2008 as well as the allocation of earnings between pre and post acquisition.
As at 17 January 2008, RFG had 4 franchise systems and 1050 franchised outlets.
And Radio Rentals Australia says it is on track to meet its annual year guidance for a 50% rise in net profit, after strong trading in the December quarter.
Although the company rents electronic products and household items, it seems to be benefiting form the strong demand for such products that has helped drive the sales of JB Hi-Fi and Harvey Norman higher in the past year.
In a trading update to the ASX yesterday, it said "The company is well positioned to produce a solid full year result, which is consistent with analyst expectations, being around $10 million after tax, some 50 per cent above the 2006/07 year".
Managing director John Hughes reaffirmed that the company was expanding with stores opening in Adelaide under the Rentlo brand.
"We see South Australia as a very strong potential market for expansion and our first store is due to open in April in Elisabeth," he said.
Mr Hughes said a reduction of customer arrears by 15% and ensuring customer affordability had helped the firm's bottom line and that higher interest rates were not likely to hurt Radio Rental customers.
"Whilst most of our customers are financially constrained, the impact of any interest rate rise is expected to be minimal given that the majority of them do not have a mortgage," he said.
"… Any downturn in the economy should produce further positives for us by creating growth in our market segment."
Mr Hughes said Radio Rentals was in a strong position to develop other strategic initiatives over 2008/09 because of its strong cash flow of about $20 million and low net debt.
One of those is planned for launch during the second half of the 08/09 financial year is a full scale retail internet site which will leverage off current system and logistic capabilities.
"This will be aimed at the broader consumer electronics market and will enable RRA to capture credit card sales as well as providing a platform for the introduc
