JB Hi-Fi posts first NZ profit

Discount electronics retailer JB Hi-Fi New Zealand made a net profit of $2.6 million for the year ending June 30, after revenues jumped 18 per cent to $222.5m.

The result turned around the retailer's $1.1m loss the prior year, on revenues of $188.7m, and is the first time it has reported a positive profit since launching in New Zealand in 2007.

A spokeswoman for the ASX-listed retailer said it was too busy to comment on the financials in the lead-up to Christmas.

But in a speech to shareholders at its annual general meeting in September, chairman Greg Richards and chief executive officer Terry Smart said the retailer was making good traction in New Zealand, "with the brand resonating with consumers".

The increase in sales and profit in New Zealand was "driven by solid market share gains across most categories, improved gross margins and good operating cost leverage".

The company has 13 stores in New Zealand, and did not open any new sites in the country during the financial year. It has 168 stores across Australia and New Zealand.

Electronics retailing is fiercely competitive, and retailers have been hit by massive price reductions in recent years, particularly in flat-screen TVs. The industry is undergoing a shake-up, with both Dick Smith and Noel Leeming changing hands in the past three months.

JB Hi-Fi sales in Australia and New Zealand reached a record A$3.13 billion (NZ$3.9b) thanks to sales growth of 7 per cent, but same store sales slipped 1 per cent.

In New Zealand, inventory shrinkage - which can be due to shoplifting, employee theft and product damage en route or in store - nearly doubled to $746,000, the company said.

Richards and Smart said the company expected sales for the 2013 financial year to hit A$3.3b - helped by the opening of 16 new stores - but predicted same store sales would again fall by about 1 per cent.

Dick Smith reported an $8.9m loss for the year to June 24, reflecting rising costs - including a $10.4m impairment charge after it closed several stores in New Zealand before its sale to private equity firm Anchorage Capital in September for just A$20m.

The Warehouse bought Noel Leeming last week for $65m. Noel Leeming narrowed its loss to $615,000 for the year ended March 31 on a 7.6 per cent lift in revenues to $607.8m. Interest costs on debt of $113.6m wiped out its $10.6m operating profit.