Briscoe buoyant in spite of December jolt
Briscoe Group says a record annual net profit of $30 million-plus is on the cards, despite a stuttering start to December slowing sales growth.
The retailer, which owns Briscoes, Living and Giving and Rebel Sport, is forecasting net profit for the year ending January 27 to leap at least 9 per cent on the previous year, on a 3.4 per cent sales increase to $452.7m.
Managing director Rod Duke said that in dollar figures net profit would probably come in at about $30.4m - continuing the company's trend of reporting solid sales and profit growth in a tough retail environment.
The company signalled the full-year result, which will be confirmed to the market on March 7, in its update on trading for the fourth quarter yesterday. Sales rose 3.1 per cent year-on-year to $150.5m.
Same-store sales growth rose 2.6 per cent for the year, but just 0.73 per cent in the quarter.
Duke said trading in November and January was "pretty good".
"The week before and after Christmas were very good," Duke said. "But the first two weeks of December were very bloody ordinary."
Other retailers had hit the same problem. "I don't know what happened, I think it's one of those really peculiar trends."
But he was reasonably pleased with the numbers for the quarter, and in particular Rebel Sport's performance for the year - which bested the previous year when the Rugby World Cup delivered a significant but one-off sales boost.
Same-store sales at Rebel Sport grew 2.1 per cent in the quarter and 0.49 per cent for the year.
"I had some reservations Rebel would jump the hurdle but they did."
The group said same-store homeware sales for the year rose 3.6 per cent.
Duke said he was pleased annual growth in profit had significantly outstripped that of sales.
However, he disagrees with reports of increasing consumer confidence and improving retail conditions.
"It's still particularly difficult out there.
"For my business it's going to be more of the same, but just doing it smarter."
Morningstar analyst Nachi Moghe said the slowdown in same-store sales growth - after reaching 6.8 per cent in the first half of the year - was likely to be due to the effect of the Rugby World Cup in 2011 and the weak start to December.
He expected same-store sales growth would tick along at 2.5 per cent to 3 per cent.
But he said that could increase if major rival The Warehouse failed to execute its strategy to revamp stores and improve product range and quality.
Plans to increase the size of existing stores and build in new catchment areas will be detailed at next month's release of the audited full-year results.
Shares in Briscoe Group closed unchanged yesterday at $2.50.
BY THE NUMBERS
Fourth-quarter sales up 3.1 per cent year-on-year to $150.5m, with same-store sales up 0.73 per cent. Full-year sales up 3.4 per cent to $452.7m, with same-store sales up 2.6 per cent. Same-store homeware sales up 3.63 per cent for the year, same-store sports sales up 0.49 per cent. Full-year net profit expected to be up at least nine per cent to more than $30m