A rare sector of retailing that didn’t sink into the slough of despond in 2009-10 and that’s car bits and leisure, judging by the record result from market leader, Super Cheap Auto.
The group, which is an auto accessories and leisure retailer, lifted net earnings 18.4% to $38.053 million in the year to July 3, from the $32.14 million earned in the 2009 year.
The company told the ASX yesterday that revenue from continuing operations grew 13.2% to $938.76 million.
Much of that gain came from a 23% rise in sales of its outdoor leisure businesses, consisting of Ray’s Outdoors and BCF (Boating, Camping and Fishing), to more than $253 million.
That helped offset weaknesses in some areas of the auto side of the business.
The Group says it plans to open 10 to 15 new auto stores and 20 new leisure stores in the coming 12 months to go with the 267 stores across the country.
Super Cheap chief executive officer Peter Birtles said in yesterday’s statement that, “During a tough period for Australasian retail businesses, Super Cheap Auto Group has delivered another record sales and profit result.
"This reflects our strong focus on delivering the right offer (centered on the right range at great value) to our target customers across the Group,” Mr Birtles said.
“At the same time, we continue to improve our business operations.
"The progress we have made in category and supply chain management over the past few years has been a major driver of like for like sales growth, gross margin improvement and a reduction in working capital per store.”
Supercheap Auto reported like-for-like sales grew by 5% in 2009-10, driven by product innovations, marketing and promotion and improved sales presence.
"Sales growth was strong in the electrical, interior, tools and storage, car care, and lubricants categories," Mr Birtles said.
"A market-wide decline in demand and retail prices for car audio/visual, navigation, and performance products impacted sales for these categories."
He said the company expected market confidence to continue to grow in the current year.
"While we expect the general outlook for retail trading to remain uncertain in the lead up to Christmas, we also expect that increasing confidence will start to drive retail spending in the second half of the coming year," Mr Birtles said.
"Over the past few years, our businesses have grown at a faster rate than the markets in which they operate and we expect this to continue in the coming years.
"Each of our businesses has a number of retail, product and marketing initiatives underway to drive sales and margin growth in the future.
"We continue to have a full store development agenda, so anticipate opening between 10 and 15 new stores in the Auto and Cycle Retailing division and around 20 stores in the Leisure Retailing division in the coming 12 months.
"We also expect to refurbish another 30 Supercheap Auto stores (including three as Superstores), close two Supercheap Auto stores, and relocate a number of Goldcross Cycles stores.
"We remain confident in the strength of our business model and we see continued growth opportunities for our businesses in the coming year," Mr Birtles said.
Sales in the auto division rose 9.9% to $684.8 million, while EBIT at $48.2 million was 13.5% higher than the prior comparative period.
Sales in the Leisure division rose 23.2% over the prior comparative period to $253.2 million. EBIT at $21.3 million was 30.2% higher.
Mr Birtles said Goldcross Cycles experienced a challenging period following a market-wide decline in sales for bicycles and accessories.
Sales in its 11 Melbourne stores fell 10%, although this was countered by a 37% jump in sales in Queensland.
Super Cheap Auto Group will pay a final dividend of 13c per share, fully franked, up from 11.5c a share for 2009. Total for 2010 year is 21.5c a share.
Super Cheap shares rose 6c to $5.70, which was no mean achievement yesterday.
And so was the performance yesterday by the shares of Pacific Brands, the troubled Melbourne-based clothing and shoe maker which had a miserable 2009.
Its shares jumped 12.4%, or 11c, to 99.5c in yesterday’s sour market after it revealed an improvement in profitability, with more to come in the 2011 financial year.
Net profit was $52.7 million for the 12 months to June 30 compared with a loss of $234.5 million in the 2009 year, the company told the ASX yesterday .
Revenue rose 11% to $1.74 billion.
Earnings before interest, tax and amortisation was $181.4 million, in line with guidance.
"Second-half earnings were up 13.7% despite lower hedged exchange rates and more challenging retail conditions than in the previous year," the company said in yesterday’s statement.
"Margins were maintained, due principally to the savings from the Pacific Brands 2010 transformation program which is running ahead of plan while underlying sales for F10 were down by 5.9%.
"Cash flow was exceptionally strong and net debt was reduced substa
