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JB Hi-Fi's NZ stores profitable again as sales grow 5.8%

Monday 11th February 2019

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JB Hi-Fi's New Zealand unit is back in profit, and the company has raised its guidance for sales this side of the Tasman. 

The discount consumer electronics retailer generated earnings before interest and tax of $1.1 million in the six months ended Dec. 31 - up from from zero a year earlier. Sales rose 5.8 percent to $131.8 million. JB Hi-Fi forecasts New Zealand revenue of $240 million in the year ending June 30, up from a previous forecast of $220 million. 

The retailer closed a loss-making store in New Zealand in the period and has appointed a new managing director - Cherie Kerrison -  to help focus the drive for profitability. JB Hi-Fi started repositioning the Kiwi business in 2016, pulling out of whiteware retailing, which wasn't making money. 

"We are encouraged by the improved performance in New Zealand, particularly the strong comparable sales growth," group chief executive Richard Murray said in a statement. 

The retailer's New Zealand comparable sales were up almost 13 percent in the period, with communications, games hardware, fitness, and accessories singled out as areas of strong growth. That helped shrink its cost of doing business to 15.66 percent from 16.31 percent a year earlier. 

Online sales jumped 65 percent to $7.9 million in the half, accounting for 6.9 percent of New Zealand revenue. 

Since the start of the year, New Zealand sales fell 1.8 percent, although comparable sales were up 4.1 percent. The chain doesn't expect to close any of its 14 New Zealand stores in the current period. 

Retailers have generally complained about a lacklustre Christmas and New Year trading period, although Briscoe Group - which sells homeware and sporting goods - today reported 5.1 percent same-store sales growth in the three months ended Jan. 27. 

JB Hi-Fi's group sales rose 4.8 percent to A$3.8 billion in the half, for a 5.5 percent increase in net profit to A$160.1 million. The board declared an interim dividend of 91 Australian cents per share, payable on March 8 with a Feb. 22 record date. 

The group expects to report annual revenue of A$7.4 billion and a net profit of $237-245 million, an increase of 1.6-5.1 percent from a year earlier. 

The ASX-listed shares were recently up 2.4 percent at A$23.13, 

(BusinessDesk)

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