Beacon Lighting Group (BLG) CEO Glen Robinson is bullish on the prospect of record sales and profit growth in FY18 as the big-box lighting retailer begins to realise the benefits of the demise of Master last year and considers an Amazon partnership.

Reporting to investors after reporting a decrease in net-profit-after-tax of 6.5 per cent to $17.8 million for the year ended 30 June, the company said that FY17 was a year of investment that had positioned it well for bumper growth in the current financial year.

“[FY17 investments] were not motivated by maximising the profit result for the Beacon Lighting Group in FY17, instead it was an opportunity to grow market share following the closure of a major competitor [Masters]…providing the foundations for future success in FY18 and beyond,” said David Speirs, chief financial officer, BLG.

Despite the profit decline and a 5.3 per cent decline in earnings before interest, tax, depreciation and amortisation (EBITDA) to $27.6 million, driven by margin pressure from Masters’ stock clearance in the first-half, sales increased by a record 11 per cent to $214.44 million on demand for high-efficiency lighting amid souring power prices.

Performance in QLD, SA and NSW helped to drive a 1.2 per cent increase in comparable sales, despite weakness in WA company stores, which were called out as “particularly challenging”.

Robinson said WA operations have begun to improve in the first weeks of FY18, but that trading was still behind other states, which are tracking comparable growth above 1.2 per cent so far.

Beacon Lighting is also investigating its options for inking a deal with Amazon, expanding the partnership it has with the e-commerce giant in other markets such as the United States.

“We’ll continue to investigate our options with Amazon, we don’t necessarily see it as a major negative,” Robinson said.

“We obviously play within the market in that middle-upper area, and we know the items that we sell on Ebay typically go to the lower price consumers … Amazon will probably be similar to that.

“We’ve got plenty of options available through our product development team, we can bring out new products to sell exclusively on Amazon if we like, [or] we can put the whole range of Beacon Lighting products up on Amazon and get the same delivery that all Amazon customers will have.

“We just really need to think about what our customers want, where they want to purchase the most and work with that strategy,” he continued.

Robinson said that Beacon’s existing online offer, which grew 54 per cent for the year and now includes services such as click and collect and After Pay, already provided free delivery to most customers and “expedient” delivery times.

He also noted that Beacon will be shielded by its emphasis on exclusive products that can’t be price matched and its physical store network, which still accounts for more than 95 per cent of total retail sales.

“I don’t believe that lighting will be the first category they focus on, there’s other items that are more exciting for them to concentrate on,” he said.

“The unique exlcusive nature of the products that we have, the fact that none of our products are available to price shop across any other channels because they are exclusive items I think we’ve got a fair protection against Amazon.”

Beacon has already opened four of the six stores it plans to open for the year, telling analysts that it had scaled back its expectations in relation to Home Consortium’s Masters sites because better freehold opportunities became available.

It expects trading from these stores, with start-up expenses already incurred in FY17, to help drive its record sales and profit forecast for FY18, alongside its solar business which grew by 142 per cent during the previous year, as retailers continue to explore off-the-grid options to offset increasing power prices.

Executive Chairman, Ian Robinson, said the increased comparables in FY18 were being driven by market-share expansion after the exit of Masters, expecting promotional intensity to normalise through the year, particularly in the first half.

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