Dick Smith has reported a $92 million rise in sales but its profits have been hit by a $5.5 million restructuring cost following the redundancy of 80 support staff in March.
In its second full year since spinning off from Woolworths, the retailer announced sales up 7.5 percent to $1.3 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) were also up 7.3 percent to reach $79.8 million.
However, net profits only grew 3.1 percent to $43.4 million, in part due to the cost of job cuts; however, the company expects these to create $12 million of savings its 2016 financial year.
New Zealand was an under-performer, with EBITDA was down 67.5 percent to just $4.4 million. Dick Smith chief executive Nick Abboud cited “patchy consumer sentiment and challenging trading conditions" across the Tasman.
In its recent 2015 annual results, rival JB Hi-Fi also reported difficult conditions in New Zealand with sales declining slightly to $211 million.
Home market
Dick Smith is following JB Hi-Fi’s lead with a plan to enter the small appliances market next year. 'Connected Home' by Dick Smith will launch in 100 stores, replacing under-performing categories. JB Hi-Fi already has 43 of its small appliance stores in Australia.
The biggest growth area for Dick Smith was in private label products, including TVs, audio and wearable accessories, which now account for 12.5 percent of sales.
Abboud told CRN that Dick Smith would continue opening in-store kiosks for recently acquired Apple reseller Mac1, with plans to have 10 kiosks open before Christmas.
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