Smiggle, Jay Jays owner's profit up
Strong demand for colourful stationery and funky pyjamas at retail chains Smiggle and Peter Alexander has countered lacklustre sales at Jay Jays, helping Solomon Lew's Premier Investments lift first-half net profit by 12.1 per cent to A$52.1 million ($55.7 million).
Earnings before interest and tax from Premier's retail operations, which comprise Smiggle, Peter Alexander, Just Jeans, Jay Jays, Dotti, Portmans and Jacqui E, rose 9.2 per cent to A$61.5m as stronger sales and lower costs offset weaker gross margins.
The profit result was in line with market forecasts, but sales growth exceeded expectations.
Retail sales rose 5.3 per cent to A$468.4m and like-for-like sales by 4.4 per cent as six of the seven brands in the group achieved sales growth.
Just Jeans returned to positive growth for the first time in several years and Jay Jays, which is in turnaround mode, returned to growth in the second quarter.
Sales at Smiggle rose 15.7 per cent and Peter Alexander sales by 23.3 per cent.
Premier also booked an equity accounted profit of A$8.3m from its stake in appliance maker Breville, which was valued at A$318.8m.
Premier started equity accounting its share of Breville's profits after appointing a new director to the board in the second half of 2013.
However, investment earnings fell 5.7 per cent before tax, due to lower interest earnings on cash holdings of A$318m.
Sydney Morning Herald