Briscoe Group reports positive half-year result despite profit drop

Briscoe Group has reported a positive half-year result, but its performance is down compared to the same time last year.

The group reported a net profit after tax of $33.21 million to July 28, down from $42.75m for 1H2023.

The group did face a one-off, tax adjustment due to changes in depreciation rates to commercial buildings, which if removed meant its net profit increased to $40.58m for 1H2024, down 5% compared to 1H2023.

Total revenue for the group had a slight increase of 0.77% year-on-year, up from $369.2m in 1H2023 to $372m in 1H2024.

Looking at revenue between Briscoes (homeware) and Rebel Sport (sports goods), homeware sales contributed $230m for 1H2024 with sports goods contributing $142m for 1H2024.

The group’s earnings before interest and tax (ebit) fell from $64.2m in 1H2023 to $60.5m for 1H2024.

Briscoe Group managing director Rod Duke. Photo / Dean Purcell

Briscoe Group managing director Rod Duke said that delivering positive sales across homeware and sporting goods was an achievement.

“Like all retailers, we continue to face margin pressure as the impacts of the ongoing economic downturn are felt. Optimising gross profit while maximising sales is a constant focus for the team and they have done a terrific job this half in enhancing the promotional events for seasonal products, particularly for sporting goods, to increase sell-through and protect margins,” Duke said.

Briscoes acknowledged that its half-year result was impacted by KMD Brands’ decision not to pay an interim dividend to its investors for the year, which includes the group.

Duke said that current economic conditions are requiring retailers to remain cautious, but that he is optimistic Official Cash Rate (OCR) cuts will support consumer confidence.

“While we will not be able to replicate last year’s full-year net profit of $84.2m, I am confident about the group’s ability to deliver a strong result in what is unquestionably the most challenging retail environment we have seen for some considerable time,” Duke said.

The group also reported in its result that a settlement had been reached on land in Drury for a new distribution centre, with a final payment of $12.96m from the company’s cash reserves.

Changing retail

Back in July, Duke spoke with the Herald’s Liam Dann on the Money Talks podcast about how he “changed New Zealand retailing”.

“Look, we’re in the glamorous position that for the last 35 years we’ve saved a lot of money. We haven’t borrowed any money from a bank for 25 years. So we’re cash rich, we’re not indebted,” Duke said.

“We’ve got spectacular staff. We’ve looked after them, all through Covid. Look, make no mistake, it is tough. It’s very, very, very tough in the suburb, I’m not going to have a record year in terms of profit, but we’re going to go all right.”

Some things are on hold until the economy improves, Duke said.

Duke declined to reveal any specifics of his expansion plans but is very clear that he still has growth ambitions.

“It’s not over. We’ve got some big plans coming up. We’re looking to expand the business. We’re looking to acquire or establish a bigger business.”

Despite having owned and managed the business for nearly 40 years, Duke has no plans to retire.

“I can’t begin to imagine what I would do if I didn’t have the responsibility of a business that I basically gave birth to,” he said.