Record sales for Briscoe Group, but net profit dips
Briscoe Group defied an “uncertain” retail market with record sales over the year to the end of January, but has experienced a dent in after-tax profit.
The company, which is behind retail chains Briscoes and Rebel Sport, had a fullyear after-tax profit of $84.2 million, down from last year’s record of $88.4m, it reported yesterday.
Total sales for the year increased by 0.8% to $792m on the previous year’s $785.9m, with online sales representing 18.7% of all sales. But the company’s gross margin percentage declined for the period, from 44.0% to 42.4%.
In a market update, group managing director Rod Duke said that like all retailers the company faced margin pressure from a number of factors as the impacts of the ongoing economic downturn were felt.
But it had differentiated itself by protecting a significant portion of the margin percentage increase achieved during the Covid pandemic, at 47% of the 633 gross margin basis points gained, he said.
“The group’s full year gross profit margin immediately prior to Covid, the year ended January 2021, was 39.4% compared to this year’s margin of 42.4% – a significant achievement which we have worked hard to deliver.”
Duke said the company had produced another year of record sales against a macro retail environment in which many retailers have struggled to hold their ground.
“It’s significant that the group was able to grow sales across both the first and second halves as well as across each of the trading segments, homeware and sporting goods.
“The combination of a strong core business and the execution of strategic initiatives by an extremely talented team has again proved to be a great formula for success – delivering a bottom line equal to 95% of last year’s record net profit after tax.”
Shareholders will be paid a final dividend of 16.5c a share, taking the full year dividend to 29c a share – a 3.57% increase on last year’s payout.
The value of the company’s inventories was $104.9m at the end of the year, down $12.9m from the $117.8m reported last year.
Duke said inventory improvements had been critical in delivering sales growth and meeting gross profit goals.
As local and international supply chains returned to more normal, reliable and cost-effective levels of service compared to the disruption of recent years, the team had been able to tighten the levels of inventory held, he said.
Despite difficult trading conditions, Briscoe Group had made progress on several store development projects over the year. There had also been significant progress on the establishment of a new distribution centre in South Auckland.
Duke said the company was cautious about the outlook for the retail environment because of ongoing uncertainty in economic conditions, customer sentiment and cost pressures. “We do not underestimate just how challenging trading could be, but are very confident in relation to the group’s ability to continue to perform and deliver superior results.”