Investors were left undecided about the interim result from JB Hi-Fi (JBH) yesterday – yes the figures showed the company had not been hit by whatever storms had brought down Dick Smith, guidance for the full year was raised and interim dividend was lifted.
But after an initial flurry and rise to a day’s high of $22.40, around $1 under their all time high of $23.50 hit a week ago yesterday, the shares were sold off and ended the day down around 0.5% on $22.
The reaction yesterday had the now familiar look of ‘buy on the rumour, sell on the facts’ – for much of this year the shares have been in demand as investors sought a well run, high performing retailer (compared with the likes of Dick Smith and Woolworths) and that demand had seen the shares run up 15% since the start of the year to last Monday’s high.
But they slowly eased over the remainder of last week and apart from the early rise yesterday, the way they ended has been in keeping with the way the shares have performed in recent days.
JBH 1Y – JB Hi-Fi lifts first half profit 7.5%
Investors had expected no surprises on the upside and it seems even the upgrades to full year sales and earnings were not enough to see the shares continuing rising.
Interim dividend was lifted 4 cents to 63 cents a share and directors said yesterday they now expected higher sales and earnings for the year to June.
JB Hi-Fi forecast net profits between $143 million and $147 million for the 2015-16 year after revealing a 7.5% increase in net profit to $95.2 million in the six months to December. It now sees full year sales reaching $3.9 billion, compared with previous guidance of $3.85 billion, implying total sales growth of 6.8% for the 12 months.
The company said the solid first half performance was due to strong sales of mobile phones, IT and fitness products and home appliances which offset pressure on margins from the widespread discounting triggered by the failure of Dick Smith.
Total sales rose 7.7% to $2.12 billion in the six months ended December 31, in line with market forecasts, thanks to seven new stores. Same-store sales rose a very solid 5.2% in the six months.
Gross profit margins eased 3 basis points to 21.7%, but the company said its costs were well controlled in the half with only a tiny 0.1% rise in the cost of doing business to 14.3%.
The net profit result was in line with consensus forecasts around $95 million.
JB Hi-Fi yesterday reported strong January sales results, despite discounting on some Dick Smith merchandise by the receivers, with topline sales up 10.2% (8.9% in January 2015) and, more importantly, same store sales growth of 6.5% (7%), which was up on the figure for the six months to December of 10.2%.
“Sales in January 2016 were pleasing given the strength in the prior year, with back to school technology purchases in both our retail and solutions businesses driving sales,” CEO Richard Murray said in yesterday’s announcement.
JB Hi Fi had 194 outlets across Australia and NZ, with 56 of those now selling whitegoods, 22 of the existing number added small appliances to the product offerings in the half year and another 15 will add the line up this half.
