KEY POINTS:
Retailer Briscoe Group has reported a 12.3 per cent fall in half-year net profit after tax to $10.53 million as competition hit the company's margins.
The profit for the six months to July 29 compares with $12.01 million in the corresponding period a year earlier, and was generated on sales up 13.7 per cent to $190.26 million.
Gross margin percentage eased from 41.28 per cent to 41.02 per cent, reflecting the competitiveness of the retail segments within which the group operated, Briscoe said.
Additional promotional activity had generated satisfactory sales momentum, but gross profit margin was affected.
A later start to winter combined with low levels of consumer confidence in the economic outlook also contributed to tightening trading conditions.
During the six months, homeware sales increased 13.3 per cent from $113.36m to $128.39m and sporting goods sales increased 14.6 per cent from $53.97m to $61.87m.
On a same store basis, homeware sales increased by 7.3 per cent, while sporting goods sales increased 1.8 per cent, Briscoe said.
A fully imputed interim dividend of 3.5 cents per share will be paid.
Group managing director Rod Duke said the trading environment had been much tighter than for the first half of last year.
The late start to winter had an impact on heating and apparel categories in relation to both sales and inventory levels.
In addition, the highly seasonal trading patterns of new additions to the group's homewares segment, Urban Loft and Living & Giving, resulted in their profitability being heavily weighted to the second half of the year.
The group's focus on opening new stores in viable locations continued , with a further seven stores planned to open in the second half of this year, Mr Duke said.
New Briscoes Homeware stores would open in Pukekohe and Upper Hutt, two new Living & Giving stores were planned for Albany and Manukau, and Rebel Sport would open stores in Pukekohe and Timaru - adding to its latest store at Wairau Park on Auckland's North Shore, opened in August.
At July 29, $34.83m of cash was in the bank or on deposit, and there were no borrowings.
Mr Duke said that despite the first half result, the group was well placed to perform better in the second half of this year in comparison to last year.
But the uncertainty of the economic environment made it difficult to predict now whether the group would match last year's annual profit result of $26.05m.
Briscoe shares were up 1c to $1.52 at lunchtime, having ranged between $1.50 and $1.80 in the past year.
- NZPA
