Premier profit in the jeans

Conglomerate defies Brexit to hit 12-month high

SHARES in Premier Investments have surged more than 22 per cent to a fresh 12-month high as a stellar sales performance by Peter Alexander and Just Jeans helped the company counter a wider retail malaise.

The Solomon Lew-chaired conglomerate increased its full-year net profit by 27.7 per cent to $106.8 million as total income rose by 7.3 per cent to $1.28 billion in the 12 months to July 27, a figure that would have been even higher were it not for $26 million pre-tax charges against its UK Smiggle stores. Premier said it brought forward depreciation charges as it breaks lease options amid Brexit uncertainty.

“Recent political developments in the UK ... have added further political and economic uncertainty to an already distressed retail and landlord environment,” the company said yesterday.

Premier’s retail chief executive Mark Mcinnes (pictured) said the company’s overall result was particularly impressive considering rival retailers had struggled during a wider economic slump.

“Companies with good strategies are doing well ... companies with poor strategies aren’t doing well, and that’s the nature of the market,” he said.

Mr Mcinnes was cautiously optimistic the company was well-placed to cash in on the all-important Christmas sales season, while strong Father’s Day sales and a back-to-school campaign in the UK and Ireland had given it a boost in the first few weeks of FY20.

He said the company was, however, yet to see any benefit from the Reserve Bank’s dual rate cuts in June and July, or the Federal Government’s recent tax stimulus.

“It feels like (consumption) should be good ... record low interest rates ... house prices going up,” he said. “But it doesn’t seem like it’s coming through to the economy.”

Nonetheless, the company yesterday increased its final dividend by four cents to 37 cents, fully franked.

Shares in the company were up 22.34 per cent to $19.23 by 1327 AEST, the highest since September last year. Revenue from Smiggle hit a record $306.5 million as sales in Asia remained strong – though the stationery chain’s 4.6 per cent sales growth was well down on 22.7 per cent in FY18.

The company’s Peter Alexander sleepwear chain lifted its full-year sales 13.3 per cent to $247.8 million to almost reach its 2020 growth target a year ahead of schedule.

Total sales at Premier’s apparel range – which includes Just Jeans, Jay Jays, Dotti and Portmans – grew by 6.9 per cent to $716.7 million.