Announcement
HALFYR: BGP: HY to 29/07/2018 $29.34M ($28.58M) +2.7% Int Div 8.00cps
10:19am
BGP
20/09/2018 10:19
HALFYR
PRICE SENSITIVE
REL: 1019 HRS Briscoe Group Limited
HALFYR: BGP: HY to 29/07/2018 $29.34M ($28.58M) +2.7% Int Div 8.00cps
BRISCOE GROUP LIMITED
Results for announcement to the market
Reporting Period; Half-Year 29 January 2018 to 29 July 2018
Previous reporting period; Half-Year 30 January 2017 to 30 July 2017
Amount (000s); Percentage change
Sales revenue from ordinary activities
$293,200 +4.3%
Profit from ordinary activities after tax attributable to shareholders
$29,342 +2.7%
Net profit attributable to shareholders.
$29,342 +2.7%
EPS: 13.3cps 13.0cps
Interim Dividend
Gross amount per share 8.00 cents
Imputed amount per share 8.00 cents
Record Date: 04/10/18
Payment Date: 11/10/18
Imputation tax credit: $0.031111
Half Year Review
Highlights for the 26 week period ended 29 July 2018:
o Total sales $293.20 million, +4.31%
o Same store sales growth, +2.46%
o Gross profit $120.00 million, +5.21%
o Gross profit margin 40.93% vs 40.58% last year
o EBIT $40.62 million, +3.80%
o NPAT $29.34 million, +2.68%
o Interim Dividend 8.00 cps increase from 7.50 cps last year, +6.67%
The directors of Briscoe Group Limited (NZX/ASX code: BGP) announce a record
net profit after tax (NPAT) of $29.34 million for the half-year ended 29 July
2018. This compares to last year's $28.58 million half year result. The
half-year results are unaudited.
The directors have resolved to pay an interim dividend of 8.00 cents per
share (cps). This compares to last year's interim dividend of 7.50 cps. Books
will close to determine entitlements at 5pm on 4 October 2018 and payment
will be made on 11 October 2018.
The earnings were generated on sales revenue of $293.20 million compared to
the $281.08 million generated for the same period last year. On a same store
basis the Group's sales for the half year ended 29 July 2018 were 2.46% ahead
of the same period last year.
Earnings before interest and tax (EBIT) of $40.62 million were generated for
the six months to 29 July 2018. This compares to $39.13 million for the same
period last year and represents an increase of 3.80%.
Gross margin dollars has increased 5.21% for the period with gross margin
percentage increasing from 40.58% to 40.93%.
The increase in gross margin percentage reflects improvements in stock-loss
measurements as a result of improved loss prevention initiatives as well as
operational strategies focused on optimising inventory availability in
relation to online fulfilment stores and promotional programmes.
In the period under review, homeware sales increased 4.58% from $178.53
million to $186.70 million and sporting goods sales increased 3.85% from
$102.55 million to $106.50 million.
On a same store basis, homeware sales increased by 2.28%, while sporting
goods sales increased by 2.80%.
The recent introduction of accounting standard NZ IFRS 15: Revenue from
contracts with customers now means sales revenue reported by the Group will
include delivery fees charged to online customers for the delivery of
products purchased directly online. The corresponding cost incurred by the
Group for delivery of product to customers will be included in the total cost
of goods sold. Previously these amounts were offset and the net-cost shown as
a store expense. The reclassification will have the effect of increasing
sales revenue and cost of goods sold, while decreasing gross profit and store
expenses. There is no impact on the Group's reported net profit after tax.
The table below shows the effect of the reclassification on selected Group
reported amounts for the first half of both this year and last year.
(Refer table in attachment).
Inventory levels have been well controlled and as at 29 July 2018 were $85.01
million, only slightly higher than the $84.95 million at the same time last
year. This total includes the impact of three additional stores opened by the
Group since July last year - the Briscoes Homeware stores in Rangiora
(September 2017) and Glenfield (December 2017), a Rebel Sport Store in
Kerikeri (February 2018) and the closure of the Living & Giving store at
Riccarton in March 2018.
Rod Duke, Group Managing Director, said: "Despite the ongoing competitiveness
of the retail environment and increasing negative economic indicators testing
consumer confidence, overall we are satisfied with the record sales and
profit achieved for the first six months.
"We're delighted to welcome Fiona Stewart to our senior executive team as GM
Marketing and Strategy. Fi has a strong marketing background and will
definitely help us to improve the way we focus on, and communicate with, our
customers.
"We have progressed and completed a number of store projects during this
first half. February saw the opening of a new Rebel Sport store in Kerikeri.
Situated alongside our Briscoes Homeware store the new store was well
received by the local community and has performed well since opening.
"During this half we completed a full refurbishment of our Briscoes Homeware
store in Rotorua. This included online fulfilment capability which was also
established at the Rotorua Rebel Sport store and the Glenfield Briscoes
Homeware store in Auckland.
"Work continued on some major Group owned property projects during the half.
Excellent progress is being made on the build to replace the Group's Support
functions in Taylors Road, Auckland. The new offices and retail space are on
track for the support office to relocate by September 2019 before the
temporary relocation of the existing Briscoes Homeware store to allow for its
complete rebuild.
"Resource Consent has been obtained for our project to establish Briscoes
Homeware and Rebel Sport stores at Silverdale, north of Auckland. A building
consent has been lodged and we are hopeful of being able to open for trade
early in 2020.
"During the second half of the year the existing Briscoes Homeware store at
Northlands in Christchurch will relocate to the new North Link Retail Centre
at Papanui where a new Rebel Sport store will also open before Christmas
2018.
"A lease agreement has been signed to establish new Briscoes Homeware and
Rebel Sport stores on a site in Mt Roskill, Auckland. We anticipate these
stores opening by the end of 2019.
"During the six months we received a dividend of $1.71 million from our
investment in Kathmandu Holdings Limited. An additional tax expense has been
incurred for this half compared to last year as a result of this interim
dividend not being fully imputed for New Zealand shareholders.
As a result of our participation in the recent equity raising and the
subsequent share purchase plan, our investment in Kathmandu now represents a
shareholding of 18.90%. As the largest single shareholder we continue to
note the significant improvement in Kathmandu's trading performance, in
particular its most recent full year result.
"We remain focused on initiatives which we believe will continue to ensure we
are the first choice for homeware and sporting goods in New Zealand. Several
examples of these include; an innovative research project to help us better
understand the rapidly changing markets in which we operate and the customer
behaviour within those markets, continuing to build the knowledge base of our
teams and ensuring we continually offer a safe working environment for our
staff and customers, and the extended trial of the 'Click and Collect'
initiative to ensure customers can shop with us however they choose to.
"We continue to experience excellent growth through our online channels
which are now approaching 9% of total Group sales. Continuing to increase the
number of fulfilment stores has helped to improve online capacity and further
additions are planned for later in the year. We are excited with our
initiative to replace our online platform this year and we are progressing
well to have this completed by the end of our financial year. This is a major
project for the business which will deliver improved online process,
functionality and customer experience as we look to maintain the impressive
sales growth currently being achieved.
"The economic outlook for the second half remains uncertain with flagging
consumer confidence, increased industrial action, record-high fuel costs,
increased wage pressures and a lower New Zealand dollar, all factors which
will test retailers' ability to maintain margins. We are obviously addressing
any additional costs as they arise, including any employee entitlements and
provisioning appropriately. Despite these challenges we are confident that we
have the right programmes in place to continue to maintain market share and
to deliver the quality products, service and shopping experience to ensure
improved bottom line profit and returns to shareholders."
Thursday 20 September 2018
Contact for enquiries:
Rod Duke
Group Managing Director
Tel: + 64 9 815 3737
End CA:00324133 For:BGP Type:HALFYR Time:2018-09-20 10:19:46
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