JB Hi-Fi cracks $2bn sales for half-year

JB Hi-Fi has cracked $2 billion in sales for the half year ending 31 December.

Half-year sales grew from $1.96 billion in the equivalent period in 2014 to $2.12 billion - an increase of 7.7 percent. Net profit was also up 7.5 percent from $88.5 million to $95.2 million.

While sales for software was down 4.6 percent, revenue was held up by JB Hi-Fi’s expansion into the small appliances and whitegoods business. During the six-month period, four new JB Hi-Fi Home stores were opened and nine existing stores were converted to JB Hi-Fi Home locations.

Hardware and services are still the biggest earner, account for 84 percent of sales.

Online sales also grew 28.9 percent to $62.8 million. Online transactions now accounts for 3 percent of JB Hi-Fi’s revenue.

The company expects sales for the full 2016 financial year to grow to $3.9 billion, an increase of $300 million from 2015. Net profit is expected to be in between $143 million and $147 million.

On an investor call Monday morning, chief executive Richard Murray touched on the recent struggles of competitor Dick Smith, which fell into administration and receivership last month.

“On the first half, it’s difficult to see and it didn’t feel like it had much of an impact,” said Murray. “I really feel for the staff but it’s hard for us to make more of a comment. We haven’t factored much in either way because it’s unclear.”

Murray added that while there may be some opportunities to expand into former Dick Smith stores, JB Hi-Fi isn't interested in any major acquisition.

"We weren't interested in the business. If [Dick Smith] falls over, there'll be some property opportunities but it's very small. Their stores aren't really suitable for our needs."

While JB Hi-Fi has remained tight-lipped on its managed services business JB Hi-Fi Solutions, Murray was willing to shed some light on how the business operates.

"We run things through [JB Hi-Fi Solutions] to maximise opportunity. The last thing we want is for someone to buy three laptops when they could be buying 100," said Murray.

"The concept around back-to-school education sales drives retail and [JB Hi-Fi Solutions], so it’s conceivable that parents are asked to buy a tablet for their child and they can walk into a store and buy it outright.

"Then there are other schools will put laptop on a payment plan so a parent might pay over two years and a school provides finances for a break-fix solution. That’s more likely to run through [JB Hi-Fi Solutions]."