Premier Investments shareholders will pocket a bumper dividend for 2021-22 and a small buyback as well after the owner of the Smiggle and Peter Alexander brands reported record sales of $1.5 billion for the year to July 31 as it overcame the considerable disruption from Covid lockdowns.
The sales figures for the year are more than double of what Premier posted before the pandemic.
Premier reported that net profit for the year edged up nearly 5% to $285.2 million.
“This is testament to the seamless leadership transition to [chief executive] Richard Murray, the unrelenting focus on execution by our management team, and the commitment of our people,” chair, Solomon Lew said in Thursday’s statement.
The strong result has meant Premier shareholders will get a fully franked final dividend of 54 cents a share, plus a special dividend of 25 cents a share – taking the total payout for the year to $1.25 per share. That’s up a massive 56.3% on last year.
As well the company has decided to launch a $50 million on-market share buyback, which “recognises the significant market volatility at present and will allow Premier to opportunistically and flexibly acquire shares which will in turn deliver earnings per share accretion”, Premier explained in the statement to the ASX.
News of the higher dividend and the buyback saw the shares shake off the recent slump and surge more than 14% to $23.69 at the close on Thursday. That’s the highest Premier shares have been since early May this year.
But shareholders will have to wait until to get the final and special dividends which won’t be paid out on January 25 2023.
So no pre-Christmas payment to help with the buying at Premier’s chains like Peter Alexander and Smiggle, the global children’s stationery chain.
Smiggle sales rebounded strongly as kids returned to school and away from Zoom, with a 24.6% increase in global sales to $261.2 million.
“Australia and New Zealand brand performance has been very strong, delivering total and like-for-like sales growth across both markets and all states for [the second half of 2022] and FY22,” Premier commented.
Premier’s other success story, sleepwear chain Peter Alexander also delivered another record result for the company, with sales up 11.4% from last year to $428.5 million.
The group’s clothing brands, which include Portmans, Dotti and Jacqui E, were hard hit by lockdowns but still saw sales rise to $807.9 million.
Premier Retail delivered earnings before interest and tax (the key retail profit measure of EBIT) of $352.5 million (including significant items). Premier Retail EBIT excluding significant items was $335.0 million, up 10.1% on 2021.
Premier Retail delivered record online sales of $340.1 million in the year to July, contributing 22.7% of total Group sales for the year, and up 14.3% on the previous record result in FY21.
“The online channel continues to deliver significantly higher EBIT margin than the retail store channel. During the year, the Group launched a Smiggle website in Singapore – the Group’s first website in Southeast Asia. The online channel is now operating 15 websites across four countries,” Premier said.
And looking to the coming year the group reports a strong start (as have other retailers as shown by the Australian Bureau of Statistics data on retail sales for July and August) with sales up strongly in the first seven weeks of the new financial year
Premier’s sales were up 46.7% on 2021, though temporary store closures hurt sales last year (so making the comparative base last year much lower and the rise much larger than it would have been).
“The strong start to 1H23 and clean inventory position has given the group confidence that it is well positioned to drive sales through the critical Black Friday, Cyber Monday, Christmas, Boxing Day Sales and ‘Back to School’ trading periods ahead,” Premier said.
