Retailer JB Hi-Fi has again confirmed why it’s Australia’s most successful retailer at the moment with its latest interim profit report.
The details of the statement, with record sales and record earnings also tells us that JB Hi Fi (JBH) is atypical when compared to other retailers.
It’s even doing better than Woolworths in trading conditions that have been pretty tough up to the December surge in retail sales of 3.8% (according to the Australian Bureau of Statistics).
The shares surged by around 17% yesterday to close up $1.60 at $10.80. A 50% lift in interim dividend also helped in these days of declining payouts from major companies.
Perhaps it’s the concentration on all things electronic and aversion to furniture and whitegoods (and a fair bit of IT stuff as well) that has seen it outrun the likes of Harvey Norman, Woolies Big W, Kmart, Target and David Jones and Myer.
With a mild recession on the cards for this year, the company still believes the rest of the half year to June will see the company reach its full year targets.
After posting net profit for the first half of fiscal 2009 up 40.8%, the company said yesterday that "sales in January and February to date have met internal expectations".
"Whilst the retail outlook is less certain than previous reporting dates, the company is cautiously optimistic that it will have another strong year and confirms its previous guidance that sales will be circa $2.35 billion or a 28% increase on the prior financial year."
“We are extremely pleased with this very strong result having traded well during what is considered to be the weakest economic climate for many years” said CEO Richard Uechtritz in a statement.
“It again shows the strength of our retail model. JB has proven to be resilient during this tough period with home entertainment becoming more of a staple category and consumers seek out JB’s large range and every day low prices.”
“We continue to grow our market share as recently opened stores mature, we open new stores, expand our offering and reduce our prices on the back of increased economies of scale and a continued focus on costs,” he said.
JB Hi-Fi said net profit for the first half of the 2008-09 financial year hit $59.04 million, on revenue for the six months to December 31, 2008, that rose 27.6% to $1.26 billion.
The company declared an interim dividend of 15c per share, up from 10c in the prior corresponding period.
Comparable store growth for the half was 11.1%, (Australia 11.3%, NZ 11.3% in NZD) and margins remained stable at 21.4% despite discounting by competitors such as Harvey Norman, Clive Peeters and small chains in the consumer electronics area, as well some aggressive price cuts by the likes of Officeworks, David Jones and Myer.
JB Hi-Fi said sales in almost all categories had been solid, culminating in a strong Christmas trading period.
"We are extremely pleased with this very strong result, having traded well during what is considered to be the weakest economic climate for many years," Mr Uechtritz said in the statement accompanying the figures.
"JB has proven to be resilient during this tough period, with home entertainment becoming more of a staple category.
"We continue to grow our market share as recently opened stores mature, we open new stores, expand our offering and reduce our prices on the back of increased economies of scale and a continued focus on costs."
The company said it expects to open seven new stores in the second half, after opening 14 new stores in the first half.
JB Hi-Fi now has 101 stores in Australia and New Zealand and is targeting 150.
The company said it renewed its debt facilities in December for another three years and said it had an ability to take advantage of any attractive growth opportunities that may arise in the current weak economic climate.
