Macpac purchase boosts earnings

ASX-listed Super Retail Group, which bought outlook equipment chain Macpac Holdings in March, says the acquisition boosted annual earnings as it lifted group profit on a surge in online sales.

In the three months it owned Macpac in the last financial year, the stores delivered A$7.8 million ($8.6m) in earnings before interest and tax on A$31.4m in sales, the company said in its annual earnings result. The group reported net profit of A$128.3m in the year to June 30, from A$101.8m in 2017, on a 4.2 per cent lift in sales to A$2.57b.

Super Retail, which operates the BCF, Rays, Rebel and Super Cheap Auto retail brands, bought Macpac in March for $144m, more than twice the $68.7m paid by Australia’s Champ Private Equity in 2015. The deal added 54 stores across Australia and New Zealand to Queenslandbased Super Retail’s suite, and was funded from existing debt. Super Retail is consolidating its remaining nine Rays outdoor equipment brand under the Macpac badge.

Yesterday’s results show basic earnings per share for 2018 was 65 Australian cents, from 51.6 cents in the prior comparable period. Sales grew 3 per cent excluding Macpac, it said.

When it announced the planned acquisition in February, Super Retail said Macpac was expected to generate sales of $95m and pro-forma earnings before interest, tax, depreciation and amortisation (ebitda) of $16m in the year ending March 31. When it confirmed the deal at the end of March, it said the business had delivered $97.3m in sales and $17m in ebitda that year. Yesterday it said that on a pro forma basis for the year to June 30, Macpac had sales of A$94.7m and ebit of A$15m. Macpac sales have risen 8 per cent in the year on a like-forlike basis, it said.

In the next three years, Super Retail is targeting revenue growth for Macpac of 14-to-18 per cent per year and capital spending of A$5m per year. Super Retail declared a 27.5 Australian cent dividend, bringing the annual dividend to 49 Australian cents, up 2.5 cents on 2017.