JB Hi-Fi shares hit an all-time high of $46.09 yesterday in the wake of better than expected interim results and higher dividend before a touch of reality was introduced and some of the excitement leaked from the momentum.
JBH shares ended the day at $44.71, still up a very solid 11.4% after the result and upgraded sales and earnings forecasts for the full year.
Investors loved the news of the interim dividend of 99 cents a share which is the highest ever dividend declared by the electronics retailer.
Earnings before interest and tax (EBIT) for the company beat market expectations, coming in at $255.6 million, up 8% on the prior corresponding half and well above analyst predictions of 3.9%.
Statutory net profit after tax rose a solid 6.6% to $170.6 million for the December six months.
Revenue for the six months jumped 3.9% to $4 billion for the half, ahead of expectations of 3.4% growth, helped by a “strong” Christmas quarter.
That saw the company revise up its full-year guidance upwards – it now expects sales for the 2020 financial year to be $7.33 billion, an increase of 1.1% from its previous $7.25 billion forecast.
Net profit after tax for the group is now expected to come in between $265 million to $270 million, an increase of 6.1% to 8.1% on last year.
The interim dividend of 99 cents was up 8.8% from 91 cents last year, will be paid to shareholders on March 6.
Comparable sales grew across all divisions, up 4.4% at the company’s core Australian stores, thanks largely to higher online sales and increased sales in its communications, audio, and computers divisions.
The company’s appliances and whitegoods division, The Good Guys, also managed positive comparable sales growth, up 0.6% despite previously struggling to grow sales.
New Zealand was the only weak spot for January trade, with comparable sales at the company’s 14 stores dropping 1.6%, a sharp slide when compared to the 4.1% growth seen in January 2019.
“We are pleased to deliver positive sales and strong earnings growth in the first half of [the 2020 financial year], with sales improving throughout the half and culminating in a strong Christmas quarter,” chief executive Richard Murray said in yesterday’s statement.
“In a competitive environment, we remained focused on growing sales and market share in a sustainable manner whilst continuing to evolve the business.”
Chairman Greg Richards also announced his retirement, with current board member and former Myer and David Jones executive Stephen Goddard to take his place at the end of the June financial year.
