JB Hi-Fi's NZ stores shine in tepid first-half result

JB Hi-Fi has opened 18 new stores across Australia and New Zealand in the past year. Photo / Greg Bowker

JB Hi-Fi's New Zealand operations shone in the Australia-based electronic goods retailer's otherwise lacklustre first-half results.

While overall sales rose 5.5 percent to A$1.77 billion in the six months ended December 31, group net profit fell 9.4 percent to A$79.6 million.

The bottom-line result was dragged down by A$5.5 million in interest costs associated with its share buy-back in May last year. Per-share earnings rose slightly to 80.7 Australian cents from 80.6 cents in the previous first half.

New Zealand sales jumped 28 percent to NZ$124.9 million while earnings before interest and tax rose to a NZ$2.2 million profit from a loss of NZ$1.1 million in the same six months a year earlier.

"We are getting good traction with the JB Hi-Fi brand resonating with the New Zealand customer," the company said.

While it made solid market share gains in New Zealand, the market remained "aggressive."
JB Hi-Fi will pay a fully franked first-half dividend of 49 Australian cents per share, up from 48 cents for the previous first half.

The company said assuming second-half trading conditions are comparable with the first half it expects full-year sales will be up 5 percent at A$3.1 billion. January sales were weak but improved in February.

"While it has been a tough start to the year, we expect sales to improve as we cycle out the heavy promotional period of post-Christmas and New Year sales," it said.

"In our view, consumers were suffering from 'promotional fatigue' and therefore have not reacted as well to our post-Christmas promotional offers as in previous years."

JB Hi-Fi shares jumped as much as 56 cents, or 4.7 percent, to A$12.55 on the ASX in early trading but have since eased to A$12.41. The shares have fallen from A$20.50 in March last year to as low as A$11.10 in late December.