14 Sep 2021

Briscoes Group posts record half-year profit

2:54 pm on 14 September 2021

Homeware and sports goods retailer Briscoe Group has posted a record half-year profit, on the back of strong consumer demand and measures to protect its supply chain.

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Photo: RNZ

The company's managing director Rod Duke said after the strong post-lockdown recovery experienced following last year's lockdown, it was pleasing to produce such a strong result.

Key numbers

(For the six months to August 2021 against 2020)

  • Net profit after tax $47.5m vs $27.9m
  • Revenue $358.4m vs $292m
  • Net debt $93.9m vs $98.6m
  • Cash flow $58.8m vs $48m
  • Final dividend 11.5 cps vs 9 cps

Revenue from the Briscoes homeware business increased by 20 percent on a year ago to $222.6m, while earnings from Rebel Sport rose by a quarter to $135.8m.

Duke said the company had benefitted from its focus on three key strategic areas, enhancing the shopping experience, improving its supply chain and developing new revenue streams over the period.

This included in-store kiosks, development of its online store and the development of new product lines which are shipped direct from suppliers.

The company's inventory levels were now at $101.1 million, compared with $86.67 a year ago, as it looked to insulate itself from product shortages.

"The majority of the increase reflects significant work undertaken by our merchandise team to secure inventory in advance of traditional timings, to minimise potential international supply chain disruptions as a result of ongoing impacts of Covid-19," Duke said.

"We're in great shape for the second half to avoid being hindered by shortages we have already seen occurring across the wider retail market. Having sufficient inventory in the current retail environment is a distinct competitive advantage."

Duke said it was also increasing the hourly wages of its in-store staff by 6.4 percent to retain them in an extremely competitive labour market.

Lockdown impact

Duke said the lockdowns and subsequent store closures had resulted in a $17m hit to its sales.

He said its modelling assumed that Auckland would be at alert level 4 or 3 for the remainder of September, with the rest of the country at level 2.

"Under these assumptions we estimate September sales could be negatively impacted by around the same level as August."

The company was still forecasting a full-year profit above last year's record of $73.2m and up to $85m.