Briscoes reports record sales revenue, shaking off pandemic blues

Briscoes posted record profits as post-pandemic shoppers pushed up revenue and bottom-line profits for the company.

Briscoe Group operates homeware and sports chains Briscoes and Rebel Sports. The retailer’s sales revenue for the last year at $785.9 million was up 5.56 per cent on the previous year.

Group managing director Rod Duke said: “We’re delighted to have produced a second-half performance which has not only made up the narrow profit deficit from [the prior] half-year but also enabled us to post another full-year record sales and profit performance.”

He said the result was “an outstanding achievement” considering low consumer confidence and retail spending last year.

Net profit for the group was up 0.6 per cent at $88.4m, with earnings before interest at $135.5m, down 0.7 per cent on the previous year.

Duke said the group expects it will be difficult to replicate this year’s record profit result.

“We expect New Zealand retail in general to remain highly sensitive to ongoing uncertainty in relation to deteriorating economic conditions, customer sentiment, cost pressures, higher interest rates and political uncertainty given the upcoming general election,” he said.

The company progressed with new stores and existing store refurbishments throughout the year.

In the second half, refurbishments were completed at Briscoes Homeware Te Rapa and Briscoes and Rebel Sport stores in Dunedin and Whangārei.

The group is upgrading stores in Manukau, due to be completed later this year, along with a new Rebel Sport store and relocation of an existing Briscoes store in Ashburton in the works.

Briscoes’ focus on inventory has been “relentless”, Duke said. Inventories added up to $117.8m, down $1.7m on the previous period.

He said: “While the value of inventory has decreased around 1 per cent, the volume of inventory we are holding has actually decreased by around 11 per cent.”

Briscoe Group posted record sales revenue for the last year driven by shoppers returning to their stores post-Covid. Photo / NZME

“This lower level of inventory is a significant advantage for the business as we enter a more subdued retail cycle than we have seen for a number of years,” Duke said.

Briscoe’s gross margins increased by $5.3m, up 1.6 per cent for the period with gross margin percentage down from 46 per cent to 44 per cent.

“We are seeing margin pressure as the impacts of the economic downturn are felt and the tightening of the retail sector squeezes margins in order to be more competitive,” Duke said.

The company posted an interim dividend of 28 cents per share (cps), adding up to full-year dividend of 28 cps, up 3.7 per cent.

Briscoe’s dividend policy is to pay out at least 60 per cent of net profit on a full-year basis.

Board chairwoman Roseanne Meo said: “We were delighted to be able to reward our shareholders by increasing our interim dividend earlier this year and also now with this final dividend announcement.”

Briscoe’s result included $2.1m of dividends from their investment in KMD Brands, up from $1.7m in the previous period.

Meo said the company had “risen brilliantly” to the challenges faced during this latest year.

She said the results highlighted the group’s ability to perform and deliver strong performance during difficult trading conditions.

“However, we are acutely aware that these challenges remain ongoing and there continues to be a high level of uncertainty in the trading environment.”