Solid quarter for Briscoe Group
RETAILER Briscoe Group has delivered a solid fourthquarter performance, despite a tough preChristmas period for the sector.
It is predicting another full year of profit growth — which would make it the ninth in a row.
But investors remain hohum about the stock.
Briscoe Group, which owns the Briscoe’s homewares and Rebel Sport chains and a minority stake in outdoor chain Kathmandu, reported a 5.8% rise in fourthquarter sales and samestore, or stores open 12 months or more, growth of 5.1%.
Net profit after tax for the year ended January 27 is expected to be around $63 million — a new high, Briscoe Group managing director Rod Duke said.
Annual group sales were $631.9 million, up 4.4% on last year, and gross profit margin is expected to be up slightly.
Mr Duke said bad weather before Christmas had been ‘‘challenging’’ for retailers, both in terms of people buying homewares gifts and summer sportswear.
‘‘It’s been a little difficult, but we’ve come through it. Full year, it’s been a record for sales and profitability.’’
Online sales were up 27% on the 2017 year, Mr Duke said.
‘‘We’ve been thrilled with our online business.
We’re hitting a new customer base, selling into spots where we haven’t got shops.’’
Online revenues are now 9.5%10.5% of total revenues, he said.
‘‘I didn’t expect it to be so fast.’’ Carolyn Holmes, head of equity research at financial service provider ShareClarity, has been covering Briscoes for several years.
She said doing well in a challenging market was a testament to Mr Duke’s many years of retail experience.
And next year could be another ‘‘interesting’’ one, she said. A weakening dollar will make importing more expensive, and any slowdown in the economy will hit the company’s customers.
‘‘The Briscoes store market is related to people replenishing their homes; the Rebel Sport spend is also discretionary.
‘‘However, Rod Duke does a good job. He’s been through these cycles before.’’
However, a series of recordbreaking results — this could be the ninth in a row for Briscoes Group — is not impressing investors.
Mr Duke himself owns 78% of the company, meaning trading is not particularly liquid, but the share price has gradually headed south since highs of $4.50 in March 2017.
Yesterday’s positive result led to the stock edging up 1.5%, or 5c, to $3.29.
Ms Holmes said Briscoe Group is vulnerable because it is a retail stock.
Mr Duke said it was frustrating that retail is out of favour, and other companies have been hit too — The Warehouse’s share price fell 30% in 2017 and has not recovered, and Michael Hill International is worth only a third of what it was in early 2017, though with more fundamental reasons for the fall.
Would Mr Duke consider leaving the stock market altogether?
Maybe one day, he said, but it was not on the cards at the moment.
‘‘When we listed in 2001, we needed access to capital. But now we’ve got money in the bank. . . right now we are very happy to be listed. Delisting is not on the agenda.’’ — BusinessDesk