Myer shares closed at their highest level in two years after a better-than-expected performance in the year to July.
But it was a bit rough for some business commentators to point out yesterday that there was no dividend from retailer after it confirmed its August guidance of a return to profit in the 2020-21 financial year after four years and millions of dollars in losses.
After all the profit was a surprise when the guidance upgrade was produced last month and the lack of any outlook for the coming year because of the current lockdowns, which should have told the media that things are still pretty tough for the company in the weak department store space.
Myer posted a $51 million profit for the 2021 financial year but that was history, the new story is the way current lockdowns continue to hit sales at the start of the 2021-22 financial year, meaning the company is again falling behind.
The shares though reacted strongly to the news – the absence of a dividend wasn’t a worry as they closed at 59.5 cents, a gain of 1.16% and the highest they have been since September, 2019.
But Myer’s July 31 result was ahead of the company’s own guidance given to shareholders in August.
Myer did say on Thursday it would continue to withhold any dividend because of the uncertain outlook.
The department store group reported its best result in the past four years, with sales up 5.5% to $2.65 billion, thanks to the 28% surge in online sales to $539.5 million for the year which was more than 20% of total sales for the year.
Myer warned current sales “remained subdued” due to Melbourne and Sydney’s lockdowns, though it stressed the company was well-placed for an eventual re-opening and the following Christmas period.
CEO John King said in Thursday’s release that the result was a testament to the business’ strength during the pandemic and a demonstration that the business’ growth-focused ‘Customer First’ plan was getting traction.
“Despite the on again, off again nature of physical retail over FY21, when combined with continued growth in the online business, we delivered solid sales growth when not impacted by lockdowns, particularly in 2H21,” he said.
“As we have consistently said over the past three years our focus has been on profitable sales, growing the online business, disciplined management of costs, cash, and inventory, space optimisation and the deleveraging of our balance sheet.
Myer said it received $50.7 million of JobKeeper and the New Zealand wage subsidy during the year, of which $19.1 million was paid to workers. If this was excluded, the company said its net profit after tax would have been $29.6 million.
