Better margins bounce Briscoe to higher profit

By Phil Boeyen, ShareChat Business News Editor

Thursday 21st March 2002

Briscoe Group (NZSE: BGR) has pleased the market by beating prospectus forecasts to record a full year net profit of $17.5 million.

The retail group had forecast a final surplus of $15.1 million in its prospectus last year but the actual result is 15% higher. The figure is also a 40% increase on the previous year's profit of $12.5 million.

In line with its policy dividend of paying out 60% of earnings the company has declared a final payout of 3.25 cents per share, up from the prospectus forecast of 2.6 cents.

The company says it experienced very buoyant trading in the last two months of the year, which are traditionally the strongest trading months.

"This, coupled with greater cost savings and lower inventories, has resulted in the improvement in profit over forecast," the company reports.

"As a result the gross margin has improved to 31.6% from 30.9% last year."

The better than expected result was immediately rewarded by the market, which pushed the company's stock higher.

As previously reported total operating revenue rose 15% from $254.3 million for the year ended January, slightly higher than the prospectus forecast of $252 million.

Revenue on a same store basis rose 11.3% at Briscoes Homeware stores but the Rebel Sport chain did even better, lifting same store sales a strong 24% compared with 14% growth the previous year.

"These figures demonstrate that the growth for the year ended January 2001 has been maintained and exceeded, especially in the case of Rebel Sport."

Group stock turn improved from 4.1 in the year ended January 2001 to 4.6 in the year ended January 2002.

The directors describe the annual result as "a very pleasing illustration of the successful transition Briscoe Group has made from a private to a publicly listed company."

"It also underlines the directors' faith in specialty retailing with its strong brands and margins."

A new Briscoe Homeware store is due to open in Hamilton at the end of the month and the company says it is close to signing contracts for new Rebel Sport stores in Whangarei, the Hutt Valley and Rotorua, in addition to the recently secured store site in Invercargill.

Comments from our readers

No comments yet