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Briscoe's 2nd qtr sales grow less than expected, forecasts higher first-half profit

Thursday 3rd August 2017

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Briscoe Group saw slower sales growth than expected in the second quarter, which it put down to a late winter and the Lions rugby tour, but says it is generally happy with the first half of the year.

Revenue rose 2.6 percent to $139 million in the three months ended July 30 and gained 3 percent on a same-store basis, the Auckland-based company said in a statement. Homeware sales across the group rose 0.8 percent and sporting goods sales gained 6.2 percent in the quarter.

Managing director Rod Duke, who owns more than three-quarters of the company, said the second quarter had been challenging in a number of areas, after sales of homewares, especially seasonal products in the electrical and Manchester categories, hadn't seen the expected growth due to a late start to winter. Sales rose 4.4 percent to $280.3 million in the first half, with homewares up 4.6 percent and sporting goods up 4.2 percent.

"In addition, we believe the switch of discretionary income from general retail to hospitality during the Great British and Irish Lions’ tour also impacted homeware sales during the second quarter," Duke said. "We are very pleased with the increase in sales recorded for the sporting goods segment for this second quarter as we look to optimise gross profit dollars and consolidate sporting goods sales which we have grown significantly over recent years."

Briscoe is forecasting a net profit of $28 million for the first half, which would be a record, and compares to $27.3 million in 2016. In March, the company posted another record annual profit of $59.4 million, a 26 percent lift on the year prior.

"Overall we are satisfied with the positive sales and profit growth achieved for the second quarter and our bottom line continues to track ahead of last year despite the high levels of competitiveness across the retailing sectors in which we operate," Duke said. "Sales growth through our online channel is also pleasing, growing at around 40 percent compared to last year and now representing more than 7 percent of the total group sales."

The retailer listed on the Australian stock exchange last month as a foreign exempt entity, which Duke said would lead to increased interest and a broader shareholder base, though it isn't planning a capital raising. Of the total stock, 91 percent is held by 32 of Briscoe's 3,393 shareholders.

Briscoe shares rose 0.3 percent to $4.46 on the NZX and have gained 15 percent in the last 12 months.


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