Briscoe Group owns Briscoes homeware store and Rebel Sport.
Briscoe Group owns Briscoes homeware store and Rebel Sport.
Briscoe Group managing director Rod Duke thinks the Government needs to “get their a** into gear” and “actually do something” to help the economy.
His comments come after the retailer announced its full-year result with flat revenue compared to its prior financial year.
The group’s totalrevenue decreased by 0.06% to $791.5 million, down from $791.9m in FY23.
Duke said that making nearly identical sales in the current economy was a terrific achievement.
“Three of the quarters produced positive sales growth and while there was an inevitable margin deterioration to deliver those sales, it’s important to bring context to what has been an incredibly challenging year,” Duke said.
Breaking down the segments, homeware sales slightly fell from $490.1m to $489.8m for the year, while sporting goods likewise fell from $301.8m to $301.6m.
Duke said that while the result was “fabulous”, the Government needed to step up and be more proactive.
“The closer you get to the election, the more likely they are to be doing something seriously proactive, and I just see the back half as being significantly easier than the first half.
“I think they’re of the view that up until now they’ve been able to blame the prior Government, which is typical of a lot of governments I guess, but you know the time has just about come where you’re going to have to make your own mark.
“You’ve had enough time to study, to tighten, to understand what the books look like, and now you’ve got to put some policies into place.”
He said that everyone would be aware of the situation they inherited from the previous Government, but that they had had enough time to divert responsibility.
Tough first half
Looking ahead, Duke said the group was not underestimating how tough trading would be, especially in the first half.
“We expect this will see second-half profitability exceed that produced for the first half in a return to a more normalised shape of profitability.”
One area Duke expects to have little impact on the business is the ongoing tariff war spurred by US President Donald Trump.
He explained that most of Briscoe Group’s merchandise comes from Europe and the Far East which at this point comes with no glaring impediment.
While the impacts of tariffs are affecting the sharemarket here and across the globe, Duke intends to focus inwards and hopes ongoing interest rate relief will give consumers confidence for the year ahead.
“All I can do is just be the best in class. I’ve got an economy I’ve got to deal with, I’ve got a Government I’ve got to deal with, I’ve got a situation that I can’t change, and I’ve just got to be smart about what I do. I think we’ve demonstrated that up till now.”
“We’ve lived in good times and we made plenty, and even in bad times, we still put out pretty damn good results.”
Margin pressure
Online sales for the group represented 19.7% of group sales, up from 18.7% in 2023.
However, margin pressure continued to affect Briscoes like others in the retail industry.
Gross margin percentage declined for the period from 42.40% to 40.37%.
Duke said the group felt pressure from several factors as the ongoing economic downturn had an impact, but was confident they could improve it moving forward.
“Whilst we expect margin pressure to continue, including from a weaker New Zealand dollar, our goal this year is to at least stabilise group gross profit margin percentage and we have a number of initiatives to assist with this.”
Those initiatives included lower levels of clearance products, the introduction of a deeper analysis of promotion planning and monitoring, and the implementation of a new merchandise planning tool.
Further to the business' cost-controlling initiatives, total store and overhead costs were only 1.11% higher than the previous year.
“It’s really about the cost of doing business. We think we can activate some other initiatives as well to keep it at around that sort of level.”
“At the same time, because there’s pressure in some of our supplier base, that is where we buy merchandise, we believe there’s an opportunity to buy merchandise for a little cheaper than we’d be buying it.”
New distribution centre
During the year, $58.2m of capital investment was made by the group of which $40m represented expenditure related to the new distribution centre project at South Auckland.
“Earthworks are now well under way, and the shell of the new complex should begin to take shape towards the end of this current first half,” Duke said.
“At a time when other companies may very well be looking to refrain or defer significant strategic expenditure, we remain committed to investing in the group’s future through a number of both current and new initiatives.”
Duke believes the project is a “game-changer”, with the benefits from its construction set to make the business more productive, increase profitability, and increase customer service.
Directors have resolved to pay a final dividend of 10 cents per share for the second half (cps) bringing the total dividend for the year to 22.5cps.
That is down on the FY23 dividend which was 28cps.
The final dividend will be paid on March 27.
Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.
