As expected, JB Hi-Fi (JBH) confirmed its warning last week of a solid profit for the six months to December 31, but a surprise from retailing, was the sharp rise in earnings and a return to paying dividends by the South African controlled Country Road (CTY).
That improvement in sales and earnings, and the resumption of dividends was due to the impact of two acquisitions in 2012 appearing to have an impact for the full six months to December 31.
The solid reports from Country Road left the market unmoved – because there are only a few shares listed (as a result of an impasse between the South African owners and Solomon Lew, which controls Premier Investments). The shares were quoted at $4.83.
By way of contrast, JB Hi-Fi shares jumped more than 3%, or 53c to $18.53 after news of the five cents a share lift in interim dividend (to 55c a share) was released, along with confirmation of a solid trading outlook for the rest of the financial year.
JB Hi-Fi is forecasting full-year net profit boost of up to nearly 11% (to $129 million for the year to June), thanks to an expected 6% to 8% rise in topline sales for the period.
That was after the company confirmed that net profit for the six months ending December rose 10% to $90.3 million, a 6.8% rise in topline sales.
JBH 1Y – JB Hi Lifts dividend, confirms outlook, shares rise
JB Hi-Fi had released its interim sales and profit details last week in an attempt to distance itself from a series of profit downgrades in the retail sector from the likes of SuperCheap Auto and The Reject Shop.
That didn’t really work because the shares fell 15% in January (The Reject Shop’s shares plunged 35%), but at least they started February on the front foot.
Chief executive Terry Smart expects full-year net profit to rise at least 8.3% to $126 million and as much as 10.8% to $129 million.
“We are very pleased with the results for the half year, which again highlight JB Hi-Fi’s ability to continually leverage the power of the brand and adapt to the ever changing retail landscape,” Mr Smart said yesterday.
“We have seen positive comparable sales across the majority of our hardware categories, the successful introduction of home appliances and strong growth in our commercial division,” he said.
Same store sales rose 2.8% in the December half and the rate of growth accelerated in January to 3.8%, according to the company’s release yesterday.
The company opened five new JB Hi-Fi stores and one new HOME appliance store and converted seven existing stores to HOME stores. The chain expects to open another two JB Hi-Fi stores and convert another six stores to the HOME format in the current half year period.
Online sales rose 15.4% and now represent 2.2% of total sales.
