Briscoe Group more than doubles half year profits

Photo / Christchurch Star

Retailer Briscoe Group has reported a $6.52 million half year profit, more than double the result from a year earlier.

Group managing director Rod Duke said the challenge for Briscoes had been to drive profitability without relying on substantial top-line sales growth.

Initiatives implemented for inventory management and cost control had protected the company's margin and enhanced profitability, he said today.

The uncertainty of the economic environment continued to make it difficult to predict a result for the second half of this year.

The company was confident of exceeding the $8.5m net profit in last year's second half, but the percentage increase was likely to be considerably less than the increase achieved for the first half of this year, said Duke.

The result for the period from January 26 to July 26 was achieved on sales revenue from ordinary activities of $185.29m, up 1.8 per cent from the corresponding period a year earlier when net profit was $3.09m.

A fully imputed interim dividend of 2c per share is to be paid, up from 1cps last year.

Briscoe Group includes the brands Briscoes Homeware, Living & Giving, Urban Loft, and Rebel Sport.

The net profit for the latest half year included an asset impairment adjustment of $827,627 in respect of four specialty stores within the group's 58 store homeware segment, Briscoes said.

Those stores had so far been unable to achieve acceptable levels of profitability in the highly competitive and unpredictable markets in which they operated.

All other stores in the group were trading well, despite the difficult retail market.

During the six months to July 26 homeware sales fell 0.1 per cent to $126.03m, while sporting goods sales rose 6.2 per cent to $59.25m.

On a same store basis, homeware sales fell 1.4 per cent, while sporting goods sales rose 6.2 per cent.

Duke said the market continued to be very competitive with the level and frequency of discounting increasing, particularly throughout the homeware market.

"We have deliberately limited the expansion of store numbers this year, choosing to focus on getting the best from our existing store network," he said.

Since July last year the group had opened four new stores.

"We will continue with a conservative approach in relation to any further expansion of Living & Giving stores until market conditions support profitable expansion in this highly discretionary area of the homeware segment," said Duke.

Briscoes was optimistic about its performance in the second half of this year.

Inventory was in great shape and the company would continue to benefit, at a diminishing rate, from operating efficiencies generated from cost reduction initiatives made since early last year.

Briscoe Group shares were up 3c to $1.18 around 11am, having ranged between $1.20 and 60c in the past year.

- NZPA