Record result from Briscoe Group

12/3/2019, 10:40 am

Briscoe Group Limited (NZX/ASX code: BGP)

Results for announcement to the market
Reporting Period; Full year 29 January 2018 to 27 January 2019
Previous Reporting period; Full Year 30 January 2017 to 28 January 2018
Amount (000s); Percentage change
Sales revenue from ordinary activities
$631,919 +4.4%
Profit from ordinary activities after tax attributable to shareholders
$63,393 +3.4%
Net Profit attributable to shareholders.
$63,393 +3.4%
EPS:
Basic EPS 28.7cps 27.8cps
Diluted EPS 28.3cps 27.3cps
Final Dividend:
Gross amount per share 12.00 cents
Imputed amount per share 12.00 cents
Record Date: 26/03/2019
Payment Date: 29/03/2019
Imputation tax credit: $0.046667
Briscoe Group Posts Record Profit
Highlights for the full year ended 27 January 2019
• Total sales $631.92 million, +4.43%
• Same store sales growth, +3.10%
• Gross profit $253.36 million, +4.74%
• Gross profit margin 40.09% (Last year 39.97%)
• EBIT $86.00 million, +3.16%
• NPAT $63.39 million, +3.37%
• Final dividend 12.00 cents per share, +4.35%
• Total dividend for the year 20.00 cents per share, +5.26%

The directors of Briscoe Group Limited announce a record net profit after tax (NPAT) of $63.39 million the year (52 weeks) ending 27 January 2019, a 3.37% increase on the $61.32 million for the previous year (52 weeks).

Group Managing Director, Rod Duke, said “We are pleased to announce another record profit for Briscoe Group in a challenging retail market which continues to contend with erratic consumer confidence and economic indicators making customers even more determined than ever to seek true value for money. The commitment and focus of the entire Briscoe Group team, both at Support Office and throughout the retail operations network, has enabled us to remain focused on delivering our unique value proposition which clearly resonates strongly with customers.”

The earnings were generated on sales revenue of $631.92 million, an increase of 4.43% on the $605.14 million generated for the previous year.

Gross Margin dollars increased 4.74% for the period with gross margin percentage increasing from 39.97% to 40.09%. The increased gross margin percentage reflects improvements in stock-loss measurements from improved loss prevention initiatives as well as targeted operational and buying strategies designed to optimise the availability of product in relation to online fulfilment stores and for specific promotional events.

As previously reported for the half-year result, the introduction of accounting standard NZ IFRS 15: Revenue from contracts with customers, now means sales revenue reported by the Group includes delivery fees charged to online customers for the delivery of products purchased directly online. The corresponding cost incurred by the Group for delivery of product to customers is included in the total cost of goods sold. Previously these amounts were offset and the net cost shown within store expenses. The reclassification has the effect of increasing sales revenue and cost of goods sold, while decreasing gross profit and store expenses. There is no impact on the Group’s reported net profit after tax. The table below shows the full-year effect of the reclassification on selected Group reported amounts, for both this year and last year.

(Refer table in attachment)
During the year $21.59 million of capital investment was made by the Group of which $16.11 million represents predominantly development of property owned by the Group in Auckland and Silverdale. The balance of capital investment was for the fit-out of new and relocated stores, online platform improvements, security system upgrades and enhancements to system software and hardware.
Inventories totalled $81.02 million at year-end, $6.53 million higher than the $74.49 million reported for last year, reflecting the impact of the two additional Rebel Sport stores opened during the year, the increased demand for online shopping as well as a higher mix of imported inventory this year compared to last year’s year-end position.

Mr Duke said, “Economic uncertainty had certainly tested consumer confidence; increased wage pressures, erratic fuel prices and a challenging New Zealand dollar, all factors which have and will continue to impact retailers’ ability to maintain margins.

“Providing customers with an exceptional shopping experience whether it be through a physical store, via online - or both, is a major focus for us and critical in defending our market position against new and emerging competition.
“Our development programme progressed well during the year with two new Rebel Sport stores; in Kerikeri during February 2018 and also at the new North Link Retail Centre at Papanui, Christchurch in November. The Northlands Briscoe Homeware store relocated to the North Link Retail Centre also during November.
“Progress has continued at pace on the build to replace the Group’s Support functions in Taylors Road, Auckland. The new offices and retail space are on track for the Support Office to relocate by September 2019 before the temporary relocation of the existing nearby Briscoes Homeware store, to allow for its complete rebuild.

“Our online business continues to produce excellent sales growth, finishing the year around 27% up on the previous year and we look forward to the launch of our new online platform later this year. We constantly review the size and location of our fulfilments hubs to optimize the service level and cost to serve from this important sales channel.

“We will continue to focus on our online offering while maintaining our proven strategy of adding stores to our network as and when we identify suitable opportunities. Leveraging customer data and our own knowledge and experience, provides a rich platform for us to deliver an outstanding shopping experience for customers to access the best brands at the best prices.”
The 2018/19 NPAT includes dividends received of $6.40 million from the Group’s 18.9% shareholding in Kathmandu Holdings Limited. Mr Duke said, “As the largest single shareholder, Briscoe’s Board remains an interested observer of Kathmandu’s performance.

Group Chair Dame Rosanne Meo said, “This year’s results continue to show that customers recognise and support a quality value proposition based around product, price and service.
“On behalf of the Board, I would like to acknowledge the great work done by all staff to maintain Briscoe Group’s status as New Zealand’s top homeware and sporting goods retailer.”

Dame Rosanne announced that the directors have resolved to pay a final dividend of 12.00 cents per share (cps). The dividend is fully imputed and, when added to the interim dividend of 8.00 cps, brings the total dividend for the year to 20.00 cps, an increase of 5.26% over last year’s total dividend of 19.00 cps.
The final dividend will be paid on 29 March 2019. The share register will close to determine entitlements to the dividend at 5pm on 26 March 2019.
Tuesday 12 March 2019

ends

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