JB HiFi NZ unit profits; sales up

JB HIFI’S New Zealand unit is back in profit, and the company has raised its guidance for sales this side of the Tasman.

The discount consumer electronics retailer generated earnings before interest and tax of $1.1 million in the six months ended December 31 — up from from zero a year earlier. Sales rose 5.8% to $131.8 million. JB HiFi forecasted New Zealand revenue of $240 million in the year ending June 30, up from a previous forecast of $220 million.

The retailer closed a lossmaking store in New Zealand in the period and has appointed a new managing director — Cherie Kerrison — to help focus the drive for profitability. JB HiFi started repositioning the Kiwi business in 2016, pulling out of whiteware retailing, which was not making money.

‘‘We are encouraged by the improved performance in New Zealand, particularly the strong comparable sales growth,’’ group chief executive Richard Murray said in a statement.

The retailer’s New Zealand comparable sales were up almost 13% in the period, and communications, games hardware, fitness, and accessories were singled out as areas of strong growth. That helped shrink its cost of doing business to 15.66% from 16.31% a year earlier.

Online sales jumped 65% to $7.9 million in the half, accounting for 6.9% of New Zealand revenue.

Since the start of the year, New Zealand sales fell 1.8%, although comparable sales were up 4.1%. The chain did not expect to close any of its 14 New Zealand stores in the current period.

Retailers have generally complained about a lacklustre Christmas and New Year trading period, although Briscoe Group — which sells homeware and sporting goods — yesterday reported 5.1% samestore sales growth in the three months ended January 27.

JB HiFi’s group sales rose 4.8% to $A3.8 billion ($NZ4 billion) in the half, for a 5.5% increase in net profit to $A160.1 million. The board declared an interim dividend of A91c per share, payable on March 8, with a February 22 record date.

The group expected to report annual revenue of $A7.4 billion and a net profit of $237 million to $245 million, an increase of 1.6%5.1% from a year earlier.

The ASXlisted shares were recently up 2.4% at $A23.13. — BusinessDesk