JB Hi-Fi profit up 5.5 per cent in first half

Strong growth in JB Hi-Fi’s communications, games hardware, audio, fitness and connected technology categories over the first half of FY19 drove a 5.5 per cent year-on-year increase in net profit after tax to $160.1 million.

Group earnings per share reached $1.39 cents per share, a 5.4 per cent increase, while total sales grew 4.2 per cent to $3.8 billion for the six months ended 31 December 2018.

JB Hi-Fi group chief executive Richard Murray noted both the Australian and New Zealand arm of the business delivered sales and earnings growth, as well as recently acquired The Good Guys.

The Australian business grew its online sales 21 per cent to $144.4 million, accounting for 5.6 per cent of total sales, while its low cost of doing business of 14 per cent remains a “competitive advantage” which is maintained through a “continued focus on productivity, minimising unnecessary expenditure and leveraging scale.”

The retailer’s solutions offering recorded double digit sales growth and remains on-track to deliver the aspirational sales target of $500 million per annum.

In New Zealand, JB Hi-Fi’s sales grew 5.8 per cent to $125.55 million (NZ$131.8 million), while comparable sales rose 12.6 per cent. Online sales jumped 65.4 per cent to $7.53 million (NZ$7.9 million), contributing 6 per cent of total sales and benefiting from the improved online platform launched in August 2017.

“We are encouraged by the improved performance in New Zealand, particularly the strong comparable sales growth which is evidence that our offer is resonating with customers,” Murray said.

The Good Guys comparable sales grew 1.5 per cent, pushing total up 2.8 per cent sales to $1.13 billion, driven by growth in refrigeration, laundry, floor-care, televisions, communications and computers.

While website sales saw strong growth, a drop in third-party marketplace sales led to online sales falling 2.4 per cent to $70.7 million.

However, the group saw some mixed results at the beginning of 2019, with JB Hi-Fi Australia seeing sales growth of 3 per cent, and The Good Guys 1.8 per cent, though JB Hi-Fi New Zealand saw sales fall 1.8 per cent.

The group blamed this on increased volatility in the Christmas quarter and January, as well as a bias in customer purchasing toward key promotional period – likely a reference to the increasing focus on pre-Christmas sales events such as Black Friday and Cyber Monday.

Looking toward the remainder of the financial year, the group expects total group sales of $7.1 billion, and an NPAT of between $237 and $245 million – an increase of 1.6 to 5.1 per cent on FY17.

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