Briscoe raises profit forecast a second time, predicts better second half

Friday 21st August 2009

Briscoe Group, the owner of homeware, Rebel Sports goods, Urban Loft and Living & Giving chains, raised its first-half profit forecast for the second time in a month and predicted a stronger second-half result.

Shares of the retailer climbed 3.5% to $1.19 after managing director Rod Duke said profit in the year ending July was about $6.5 million, including an impairment charge of $820,000 against four under-performing homeware stores. Profit more than doubled from the year-earlier $3.1 million and exceeded the company's July 31 prediction of $6 million.

"While we are optimistic that our second half performance will exceed the $8.5 million NPAT achieved for last year, it would be premature and over-optimistic to expect the same level of increase as achieved for the first half of this year," Duke said.

The company will report its detailed first-half results on Sept. 9. Briscoe has responded to the economic downturn by streamlining its tiers of management and reducing inventories. It has cut costs in the past 12 months by removing a tier of regional managers and installing its most experienced people back into stores, with profit incentives tied to their outlets.

The impairment charge is against four stores that "to date been unable to achieve acceptable levels of profitability in the highly competitive and unpredictable markets in which they operate," Duke said. "All other stores in the Group are trading well notwithstanding the challenges of the difficult retail market."

By Jonathan Underhill

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