Investors loved the news that shareholders in consumer electronics retailer JB Hi-Fi (ASX: JBH) will get a $250 million ‘gift’ via a buyback to help make up for a lower interim dividend.
The company revealed in its interim results on Monday that it will run the $250 million off-market buyback after a 9.4% slide in interim after tax net profit to $287.9 million.
JBH will pay an interim dividend of $1.63 per share, down from the record $1.80 a year earlier.
The shares jumped more than 5% to end at $52.71 as investors liked the ‘bonus’ of the buyback. That was after they hit a session high of $52.75.
Analysts said it was a solid result compared with last year’s record half-yearly profits and was above market expectations and in line with guidance given by the retailer in an update in late January.
Group sales eased 1.6% to $4.86 billion as the company guided to in the update last month.
JB Hi Fi also pointed out in that update that online sales surged 62% for the half to over $1.1 billion because of the Covid related lockdowns across major markets in NSW, Victoria, the ACT and parts of southern Queensland.
Online sales now make up nearly a quarter of JB Hi-Fi’s total revenue and the company said online sales still grew 14% outside of lockdown periods.
“We are pleased to report strong sales and earnings for HY22. We continued to see elevated demand across all of our sales channels, particularly online which our customers seamlessly transitioned to during the various lockdowns demonstrating the strength and trust in our brands,” CEO Terry Smart said in the release on Monday.
JB Hi Fi Australia saw total sales dip 1.9% to $3.29 billion, with comparable sales down 2.5%. Earnings before interest and tax (EBIT, the key profit measure in retailing) fell 11.3% to $292.4 million. The New Zealand arm saw sales down 4.5% to $NZ138.4 million, with comparable sales down 4.5%. EBIT was up 6.0% to $NZ7.3 million.
The Good Guys, JBH’s white goods division, saw its strong performance continue through the half, with sales only 0.9% to $1.44 billion. EBIT eased 4.3% to $121.1 million
JBH says it was less affected by the recent supply chain disruptions that had plagued the rest of the industry thanks to its diverse supplier base, however, Mr Smart noted logistics delays had worn on the business through the new year.
Despite this, sales through January rose across most of the business’ divisions, with JB Australia up 4.3% and The Good Guys up 2.5%t. The New Zealand stores’ revenue fell 1.8% as lockdowns persisted in around Auckland.
Given the current uncertain environment due to the pandemic, JB did not provide its usual earnings guidance. “While it remains an uncertain retail environment, we will continue to stay focused on what we can control,” Mr Smart said.
“Our highly engaging in-store and online shopping experiences delivered by our passionate and knowledgeable team members, and our continued focus on leveraging our scale to deliver great value will ensure we meet our customers’ needs during these challenging times,” he added.
