Bunnings profits skyrocket yet again

Bunnings store, Hastings. Photo / File

Bunnings, the home improvements product chain owned by Australian Wesfarmers, has more than doubled annual net profit in New Zealand for the second year in a row as it benefits from a construction boom stimulating demand for building, hardware and garden supplies.

Net profit after tax for the year ending June 30 was $27.2 million, compared to $12m the year prior. Revenue lifted to just over $1b from $898m in 2015.

Related party loans increased to $305,000 from $313,000 the prior year, and that figure includes a royalty and expense reimbursement charge of $14.9m to its Australian parent, compared to just $140,000 the prior year.

Bunnings' profit bump matches similar improved results from its main Kiwi rivals this year.

Mitre 10 paid shareholders $5.8m in dividends, its biggest in at least 17 years, as profit soared to $3.2m in the June 30 year from just $106,000 in 2015. Growing consumer demand lifted network sales 9 percent to $1.24b.

Fletcher Building doesn't break down its numbers for the Placemakers hardware and building products franchise, though it said revenue was up 10 percent in the June 30 year. The distribution division Placemakers sits within reported revenue of $3.1b, up 3 percent on the prior year while earnings before interest, depreciation, and amortisation rose 14 per cent to $180m.

Bunnings has been expanding its footprint in New Zealand and Australia and its website lists 62 stores in this country, mostly in the North Island.

Last month Wesfarmers released sales results for the first quarter of the 2017 financial year, showing Bunnings Australia and New Zealand extended their strong performance with sales growth of 7.4 percent to A$2.7b. Although the conglomerate doesn't break down the quarterly figures for Bunnings NZ, it noted "pleasing growth experienced in New Zealand".

Bunnings made its first foray outside of Australia and New Zealand this year after Wesfarmers acquired UK-based DIY chain Homebase. Home improvement division boss John Gillam said good progress was being made to reshape the Homebase business with sales of 320 million pounds for the quarter, in line with expectations.

The first Bunnings Warehouse pilot store is due to open at an existing Homebase site in the UK in mid-February and at least another three Bunnings UK pilot stores are expected to open before the end of June 2017.