Briscoe forecasts 18% profit lift in full-year profit as 4th-qtr sales rise

Wednesday 3rd February 2016

Briscoe Group, whose hostile takeover of Kathmandu Holdings was spurned in 2015, expects to report a record full-year profit of $46.5 million, up from 2015's $39.3 million.

Managing director Rod Duke said the company expected the record profit after growth in sales and margin throughout the year was maintained with the strongest sales growth for the year in the fourth quarter, which is the 14 weeks to Jan. 31. The profit would mark Briscoe's seventh consecutive annual increase.

Unaudited sales for the fourth quarter were $193.1 million, up 15 percent from the fourth quarter in 2015, although that quarter covered 13 weeks, the company said in a statement. The longer quarter is necessary once every five to six years to realign financial and calendar year-ends, it said. On a same-store basis, and adjusted for the extra week, sales were 6.7 percent ahead of the fourth quarter in 2015.

For the full year, Briscoe sales were $552.9 million, up 9 percent on 2015. On an adjusted same-store basis, sales were 5.4 percent ahead for the year, with homeware sales up 3.8 percent and sporting goods sales increasing 8.7 percent.

"We are delighted with the group’s overall performance for the final quarter of the year," Duke said. “Gross profit margin percentage for the group continues to hold up well and will finish the financial year significantly ahead of last year.

"As the current foreign exchange cover we have in place matures, the weakness of the New Zealand dollar experienced of late will lead to pressure on margins which will need to be carefully managed by all retailers with significant import programs," Duke said.

The last time Briscoe reported a decline in annual earnings was during the most recent domestic recession and the depths of the global financial crisis in the 2009 financial year, a period when the kiwi dollar sank to about 50 US cents as investors flocked to the relative safety of the greenback.

Briscoe shares rose 2.1 percent to $2.92, and have dropped 0.4 percent this year. The company expects to report its full-year audited results on March 15.

BusinessDesk.co.nz

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