It’s a super cheap shot at state
WEAK consumer spending in Queensland has put the brakes on Supercheap Auto’s profit, and the retail chain partly blames the State Government.
But questions have been raised about the accuracy of the claim, with consumer confidence in Queensland at a two-year high.
The Super Retail Group yesterday said a sales decline in the Sunshine state had offset strong same-store sales growth of more than 3 per cent in other states to slow overall auto same-store sales growth to 2.2 per cent.
Group managing director Peter Birtles said the company had more stores in Queensland than in other parts of the country, which proved to be a drag during fiscal 2015.
“Queensland has pulled us back. It represents 30 per cent of our auto business sales,” he said. “I think (the sales declines) reflect the general mood in Queensland and the lack of clarity over investment.
“We need the Queensland Government to start investing in the economy.”
Queensland University of Technology lecturer Gary Mortimer questioned the claim of the Government being responsible for lower spending.
“It would be a long bow to draw,” he said. He said Supercheap, with its large weighting in Queensland, might be cannibalising its own stores.
SUPER Retail shares bounced higher yesterday despite posting a 25 per cent slump in full-year profit.
The Brisbane-based retail group, which owns the Supercheap Auto, Rebel Sport and BCF chains, posted a net profit of $81.1 million for the year to June 30, down from $108.4 million the year before.
The result was weighed down by $12.8 million in costs linked to the restructure of the group’s Ray’s Outdoors and Workout World businesses and a $16.2 million loss from the closure of FCO Fishing Camping Outdoors. Revenue rose 7.1 per cent to $2.239 billion.
CEO Peter Birtles said the result, while solid, reflected the weaker performance and restructuring costs in Super Retail’s smaller businesses, as well as investments to drive the company forward.
“Our strategy is delivering pleasing results,” he said. “The auto and sports retailing divisions experienced strong like-forlike sales growth during the year, underperforming businesses were restructured or closed as part of a strategic review to drive long term growth, and we continued to advance multichannel capabilities.”
The market liked the news, sending Super Retail shares 11¢ higher to $9.77.
Super Retail warned that overall retail growth in its market was likely to be modest given “patchy” consumer confidence and the company’s higher exposure to the Queensland economy.
The company also plans to open between 20 and 30 stores across the group and continue with store refurbishments.
Super Retail will pay a final fully-franked dividend of 21.5¢.