Solomon Lew’s Premier Investments has boosted interim dividend 35% to a record 46 cents a share after meeting upgraded guidance for revenue and earnings for the six months to January 29.
The Melbourne-based retailer told the ASX on Friday that while revenue rose 0.6% to $770 million for the half, earnings fell 13% to $163.6 million for the six months to the end of January.
Group online sales hit record highs at $195.4 million, while sales at the Peter Alexander chain also hit a record, up 11.4% to $227.4 million.
Meanwhile, stationery business Smiggle saw a 5.6% increase in sales as schools started to reopen from COVID shutdowns, booking $146 million in revenues.
The results met the upgraded guidance issued on January 27.
Retail earnings before interest and tax (EBIT) a key measure for retail performance, rose 5.5% to $212 million which, given the disruptions from Covid Delta and Omicron in the half year, was a solid outcome.
The results and the strength of the company’s balance sheet with more than $1.5 billion in cash and investments (if it sold its Breville stake) will restart speculation about takeover interest, with Myer front and centre.
The opportunity for “new opportunities’ was noted in the company’s outlook commentary.
Premier retail CEO Richard Murray and chairman Solomon Lew both highlighted the very challenging bricks-and-mortar retail conditions throughout the half, with the company losing more than 42,000 trading days across its stores due to COVID lockdowns.
“The Group has had to pivot rapidly during 1H22 to combat numerous logistical challenges in the face of lengthy government mandated lockdowns and the emergence of the Omicron variant during the latter part of the half. This result has been delivered through rigorous planning and execution across all areas of our business,” Mr Murray said in the ASX release.
In a presentation to shareholders, the company said it remains confident that Premier can perform strongly against competitors during tough market conditions.
“The Board also notes that the environment, whilst challenging for many businesses, may present new opportunities for the group given the strength of its balance sheet,” management said.
Premier pointed out that its investment in Breville had a market value of over $1 billion at the end of January against a balance sheet value of $289.3 million.
The company also said all its operating debt was repaid during half with cash on hand at end of half of $468.6 million
Premier said it also had a $68 million stake in Myer – the total cost is more than $120 million.
