JB HiFi reports sales up to 36 percent

Audio visual retailer, JB Hi-Fi has reported a record full year net profit of $40.4 million (2006 $25.8 million) from $1.282 billion of sales (2006 $946 million) for the year ended 30 June 2007.

According to a statement the retailer released to the ASX, the results exceeded the company’s recent profit guidance in June of $37 to $39 million.

Comparable store growth for the 12 months was 12.6 percent for JB Hi-Fi stores and 2.7 percent for Clive Anthonys stores, resulting in consolidated comparable store growth of 11.4 percent. The statement also said sales since March 2007 have been very robust with consolidated comparable store growth in the second half of 18.0 percent, JB HiFi stores 18.3 percent and Clive Anthonys stores 15.7 percent.

Sales in all product categories were solid; with games, DVD, visual, portable audio and computers driving strong comparable store sales growth, together with the maturing of recently opened stores.

Gross margin was steady at 22.1 percent (2006 22.5 percent) notwithstanding the high growth of lower margin categories like games and computers in 2007. Although the cost of doing business was down at 16.0 percent while in 2006 it was up at 17.1 percent.

JB HiFi CEO Richard Uechtritz said the company has declared a fully franked dividend of 6.0 cents per share (final FY06 4.0 cents) an increase of 50 percent, to be paid on 11 September. The record date for determining the entitlement is 21 August.

The group had 77 Australian and 12 New Zealand stores at year end. During the financial year the company acquired the 11 store Hill & Stewart chain in New Zealand, opened 13 new JB HiFi stores and closed one store. JB expects to open approximately 20 stores (16 Australia and 4 NZ)in FY08.

“Our recent move into the computer and telecommunications markets sees us move into two of the largest markets that we operate in, which should also assist in driving sales in our existing categories,” said Uechtritz.

Sales for FY08 to date have continued the strong momentum experienced going into the end of the 2007 financial year, with consolidated comparable store growth for the first 6 weeks of trading being 23.4 percent, he said.

“We do not expect this comparable stores sales figure to be as high going forward, as we have had unusually strong trading conditions and we will cycle stronger past year sales in the newer categories of games and computers. We expect sales in FY08 of circa $1.7billion or a 33 percent increase,” said Uechtritz.