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Briscoe Group lifts first-half profit 12 percent to $14.9 million, meeting forecast

Thursday 5th September 2013

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Briscoe Group, the homeware and sporting goods retail chain, posted a 12 percent gain in first half profit, meeting its profit guidance as sales rose.

Net profit rose to $14.9 million in the six months ended July 28, from $13.3 million in the year earlier period, the Auckland-based company said in a statement. That's in line with the company's Aug. 1 forecast for profit of at least $14.6 million. Sales rose 6.2 percent to $217.4 million.

Briscoe's first half gross profit margin slid to 39.18 percent from 39.68 percent in the year earlier period as a slow start to winter hurt demand for its winter category sales in the first quarter. However the margin recovered during the second quarter, the company said.

"Gross profit margin suffered throughout the first quarter but recovered well during the second quarter to finish slightly down on last year's rate," managing director Rod Duke said in the statement. "We look forward to a continued improvement in customer confidence and spend levels during the second half of this year and are cautiously optimistic about the group's performance on the back of improving economic indicators."

Shares in Briscoe rose 0.8 percent to $2.45, taking their gain this year to 11 percent.

Earnings before interest and tax at the company's Briscoes Homeware stores rose 9 percent to $13.4 million as sales increased 6.2 percent to $145.8 million, the company said. Earnings at its Rebel sporting goods stores increased 29 percent to $5.8 million as sales rose 6 percent to $71.6 million.

Briscoe said it will continue to focus resources on growing its online business. Inventory levels rose 7 percent to $69.2 million, reflecting additional stores, stock held for online sales, more products directly imported by the company and the build-up of stock for a new Briscoes Homeware store to open in Kerikeri in October.

The company is progressively changing the service counters at both of its chains to improve the counter configuration and allow extra selling space for additional merchandise.

The company will pay an interim dividend of 4.5 cents a share on Sept. 30, up from 4 cents in the year earlier and accounting for 65 percent of net profit.

Briscoe Group said it has changed the way it records costs to show costs relating to the distribution of a product from the central warehouse to stores will be recorded as cost of goods sold, rather than as store expenses and administration expenses, bringing its practices into line with other New Zealand retailers.

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