Dick Smith's demise boosts JB Hi-Fi

By Frank Chung

The collapse of Dick Smith has shown up as a lot of black ink on JB Hi-Fi's balance sheet. Photo / Greg Bowker
The collapse of Dick Smith has shown up as a lot of black ink on JB Hi-Fi's balance sheet. Photo / Greg Bowker

The collapse of Dick Smith has shown up as a lot of black ink on JB Hi-Fi's balance sheet.

Announcing its full-year result on Monday, Australian electronics retailer JB Hi-Fi said the closure of Dick Smith contributed to an increase in sales of computers, visual, audio and accessories.

The sales boost, combined with a tax-time splurge, contributed to a strong finish to the year, with the electronics retailer reporting an 11.5 per cent lift in its full-year profit to A$152.2 million.

Total sales were up 8.3 per cent to A$3.65 billion for the year ended June 30, with comparable sales up 5.4 per cent.

The headline result masked a 5.4 per cent drop in music, movies and games sales, which was offset by a 10.8 per cent rise in income from hardware and services.

"We had a great finish to the financial year and are proud to deliver both net profit and earnings per share up 11.5 per cent," JB Hi-Fi chief executive Richard Murray said.

"Particularly pleasing was how we cycled a strong June in the prior year, with good sales driven by tax time buying."

Online sales, which represent 3 per cent of the retailers total sales, were up 35.8 per cent.

"We anticipate [the closure of Dick Smith] will continue to drive sales growth in the first half of FY17, however the impact will moderate as we cycle through their decline and eventual market exit," he said.

Last week, the competition watchdog announced it would not intervene in any potential purchase by JB Hi-Fi of whitegoods retailer The Good Guys, which is mulling either a sale or potential float on the stock exchange.

JB Hi-Fi said it continues to participate in the sale process but had made no decision nor entered into any agreement.

The retailer is launching an A$11.8m share buyback following the strong result.

- news.com.au

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