Briscoe profit rises 11 per cent on sales growth, fatter margins

Briscoes managing director Rod Duke says he's 'cautiously optimistic' about the company's performance in the second half of this year. File photo / Paul Estcourt

Briscoe Group, the home-wares and sports goods retailer, posted an 11 per cent gain in first-half profit and raised its dividend, saying its marketing strategy was boosting its share of a tough retail sector.

Profit rose to $10.3 million in the six months ended July 31, from $9.28 million in the same period of 2010, excluding a year-earlier tax adjustment. Sales rose 2.1 per cent to $194 million and climbed 4.4 per cent on a same-store basis.

Managing director Rod Duke, whose interests own 75 per cent of the retailer's stock, said Briscoe was able to widen its gross margin percentage to 39.97 per cent from 39.94 per cent on "a strong buying and inventory management performance given the challenges of a very late winter season and the continued competitiveness across the retail industry in general."

In dollar terms, sales growth was evenly split between homewares, which rose 1.5 per cent to $128 million, and sports goods, up 3.4 per cent to $64 million. Same-store sales rose by 4.4 per cent and 4.6 per cent respectively.

Briscoe will pay a first-half dividend of 3.5 cents a share, up from 3 cents a year earlier. The shares haven't yet traded today and were last at $1.36. They have edged up 2.2 per cent this year.

Inventory fell to $63 million at July 31 from $68.7 million a year earlier, reflecting a reduction in store numbers and a "continued strong focus on inventory management."

Duke said he is "cautiously optimistic" about the performance for the second half of the year though the uncertain economic environment made it difficult to provide a forecast.

"We believe we will see further uncertainty in consumer confidence which will result in continued difficult trading conditions for retailers," Duke said.