Record for Briscoes of $33.6m

LAURA WALTERS
Last updated 05:00 07/03/2014

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Briscoe Group has navigated treacherous retail market conditions to post a record profit at a time that key competitors are struggling to make headway.

Increased sales and higher-quality products drove group profits to $33.6 million after-tax for the year to January 26 - up 10.2 per cent on the previous year.

The owner of the Briscoes, Rebel Sport, and Living and Giving chains reported revenue of $483.6m, an increase of 6.8 per cent.

In contrast, rival The Warehouse Group posted a 12.5 per cent drop in half-year net profit after allowing for significant one-off gains in the prior year.

The two retailing giants have converged on each other since The Warehouse last year shifted its focus by moving upmarket with an expanded range of better quality products.

Briscoes said it would pay a final dividend of 8 cents a share, taking the total dividend for the year to 12.5c a share, to be paid on March 31.

Group managing director Rod Duke said the record profit was achieved in a challenging retail market.

"The focus we have continued to place on managing and developing our retail brands has been significant in generating this result and underpins our strong profit growth of recent years," he said.

The result was in line with the company's forecast in January of at least $33m for the year.

Same-store sales grew 5.2 per cent compared to the previous year.

However, the company was not immune to margin pressures facing Australasian retailers.

Duke said the group's gross profit margin for the year fell from 38.9 per cent to 38.5 per cent, reflecting the "extraordinarily challenging" start to the year because of the late start to winter sales and competition throughout the year.

"The competitiveness of the market has necessitated more aggressive promotions, which has slightly eroded our gross margin percentage," Duke said.

"But by continuing to improve the quality of products we sell and increasing the average sale and transaction numbers, our gross-margin dollars have increased by nearly 6 per cent over the previous full year."

On a same-store basis the homeware and sporting goods segments increased sales 4.6 per cent and 6.6 per cent respectively.

The company invested $16.2m in property purchases in Invercargill and Petone, the fit-out of a new store, five store refurbishments, and improving store layouts.

The group planned larger projects involving new stores over the next three years, Duke said.

The company was "cautiously optimistic" about the year ahead.

Briscoes shares closed down 1.2 per cent to $2.53.

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