As previously announced by JB Hi Fi, 2020-21 was a record year – record sales, record earnings and yesterday we saw a record final and dividend for the year that some banks would envy.
And all that in a year that was badly disrupted by the Covid lockdowns.
In essence, 2021-22 is not a new year, but rather a repeat of 2021’s experience with the virus and lockdowns that have, for a second time in a row, disrupted the start to a new financial year.
The new round of lockdowns across NSW and Victoria (not to mention, southeast Queensland, South Australia, and from now on parts of the Northern territory and Canberra) are cutting sales for the county’s premier consumer electronics group.
The lockdowns in Melbourne and greater Sydney and now all of NSW, have seen the company’s sales to fall nearly 15% through July and early August despite a bumper full-year result at the company.
JBH told shareholders on Monday revenue at its Australian operations had dropped 14.6% in the six weeks since the start of July, a fall the company attributed to lockdown-based “disruption”.
Sales at The Good Guys also fell 8.1% for the period.
And yet investors lifted the shares by more than 2.5% to $49.53 after being lower at the opening.
JBH said that when compared over a two-year period, sales were up nearly 20% for the start of the new financial year, reflecting the overall growth JB Hi-Fi has experienced over the last 24 months, largely thanks to the online boom seen during COVID-19 pandemic and then the surge in shop sales once the first lockdowns had eased.
The company has already revealed the nitty gritty of its 2019-20 sales performance in an earlier post June 30 trading update – sales for financial year up 12.6% to a record $8.9 billion, and earnings up 67% to just over half a billion dollars.
Online sales made up $1.1 billion of JB’s total sales, growing 78.1% over the year. That sort of growth won’t be repeated this year and investors will want to know soon how online sales growth have gone during the current lockdowns in NSW, Melbourne and Canberra.
JB declared a record $1.07 a share final dividend, an 18.9% increase on last year’s 90 cents a share. With the $1.80a share interim paid earlier this year, the $2.87 full year payment is a record and well above the $1.89 paid for 2019-20.
Sales last year depended heavily on government stimulus spending such as JobKeeper, the accessing of superannuation savings as well as people spending money they would have used to travel overseas.
However, most of that stimulus is now absent and the vast majority of Australians already set up for at-home working, recent lockdowns have not given JB the same boost.
Terry Smart, the former CEO who will replace JB’s longstanding chief executive Richard Murray at the end of the year, said while the retail environment remained uncertain the retailer would not be providing guidance for the 2022 financial year, though stressed JB was on strong footing.
“The combination of our passionate and knowledgeable team members, our multichannel offer, including quality store locations and established online offerings, and our ongoing investment in our supply chain gives us confidence in the outlook for the business,” Mr Smart said.
