Beacon Lighting misses profit expectations, looks overseas for growth
Specialty retailer Beacon Lighting reported record sales in FY19, though fell short of its goal of achieving a record profit with NPAT falling 17.2 per cent to $16.2 million.
While sales grew 2.5 per cent to $246.3 million, gross profit margin fell from 65.7 per cent to 64 per cent, and operating expenses grew 2.4 per cent from $123.7 million to $126.6 million.
According to Beacon, while the company looked to new stores and smart products to drive record performance in the FY19 fiscal year, sales and profit performance was subdued in the second half of the year.
“Trading was subdued as a result of a number of factors including a number of factors including a decline in housing prices and churn rates, weak consumer confidence, the federal election and tighter credit availability within the housing sector,” the company reported in its FY19 annual report.
“All of these factors impacted upon the Beacon Lighting Group result for FY19.”
Chief executive Glen Robinson told investors he personally couldn’t remember a year with so many economic distractions.
Despite this, the business invested further into five new company stores, the purchase of two franchise stores as well as the purchase of an ex-Masters store in Parkinson, Queensland – which was subsequently transformed into a new distribution centre.
While comparable sales fell 2.3 per cent, strong sales increases were seen in Beacon’s online and international offerings.
Online sales increases 22 per cent, now reaching 5.5 per cent of total sales, while the brand launched a click-and-collect offering, as well as the ability to shop directly through social platforms.
International sales improved more than 50 per cent, with Beacon expanding further across USA and Europe.
Moving forward, the specialty business is looking to continue enhancing its online offer through the re-platforming of its website and e-commerce channel, while targeting further sales and profit growth through further optimisation of its store network.
Additionally, the business is seeking to expand further internationally into new markets – China and Canada – as well as a greater emphasis on smart lighting.
Robinson expects housing related conditions will improve during the first half of FY20, which should be positive for the group.
“We will continue to have a customer focused offer,” Robinson said.
“From the budget conscious to the aspirational homeowner.”
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