Briscoe profit drops 48% as tough trading squeezes margins

Monday 16th March 2009

Briscoe Group, the operator of homeware, Rebel sports goods, Urban Loft and Living & Giving chains, posted a 48% drop in full-year profit and cut its dividend as the economic downturn squeezed margins.

Net income fell to $11.6 million, or 5.4 cents a share, in the 12 months ended Jan. 28, from $22.4 million, or 10.4 cents a year earlier, the company said in a statement. Sales fell 4.7% to $388 million.

The diversified retailer slowed its decline in profit to 29% in the second half from a 70% slump in first-half earnings by taking firmer control of inventory and cutting costs. Inventory management, cost control and 'in-store delivery' will be the company's key priorities this year, managing director Rod Duke said.

"We're not counting on much, if any, improvement in the retail market over the coming year," Duke said. "But with the initiatives we have taken over the last six months in particular, we have positioned ourselves to improve our operating and financial performance."

The company's gross profit margin shrank to 38.6% from 40.4%. Briscoe cut its final dividend to 3.5 cents a share from 4.5 cents, bringing payments for the year to 4.5 cents, down from 8 cents a year earlier.

Shares of Briscoe were unchanged at 62 cents and have fallen 52% in the past 12 months. That lags behind Warehouse Group, which has dropped 42% in the past 12 months.

By Jonathan Underhill

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