Briscoe scores 80pc profit rise

Interest in the Super 14 helped Rebel Sport recover from a difficult 2008. Photo / Getty Images

Briscoe Group has powered its way through the past year, delivering an 80 per cent jump in profit to $21 million, although it is cautious about the remainder of this year.

The homeware and sports goods seller benefited from strategic and structural changes during a tough year which is expected to see rival The Warehouse deliver a flat half-year result on Friday.

Briscoes managing director Rod Duke said the result for his company was a good one, but much of the retailing sector was still in a slump.

"I don't think you can draw any conclusion about the broader economy. I think it's going to be a challenging year at least."

Sales revenue was up 7.3 per cent to $416.7 million with both Briscoes Homeware and Rebel Sport showing growth for the period ended January 31.

On a same-store basis, and adjusted for the 53-week year, sales rose by 4.7 per cent for the group, with the homeware segment up 4.2 per cent and sporting goods up 6 per cent. Sponsorship of the Super 14 was starting to pay off, he said.

The result included a net of $1.86 million in asset impairment adjustments related to the Living & Giving specialty stores.

A final dividend of 5c a share is to be paid, up from last year's final dividend of 3.5 cents.

Besides claiming a greater market share, the result was because of key strategic and structural initiatives which started to be implemented two years ago, Duke said.

A $3 million inventory control overhaul meant the company had a much better idea of precise stock levels, what was selling well and what was not. Margins were up.

"A requirement to discount stock that didn't sell was reduced substantially."

The group has also benefited from a scheme introduced last year where the number of store managers had been cut from 89 to 40 profit centre managers, some of whom had two to three stores under their control. Those managers oversaw staff costs, inventories and accounts and shared in profits.

"When it's your own you don't put the air conditioner on until it's absolutely necessary and you manage your cost of labour. You don't have more people on the floor than absolutely necessary."

Rebel Sport had recovered from a tough year in 2008 with sales increasing from $121 million to $130 million.

The Super 14 gathered strength with leading players back and there was excitement around basketball and soccer with the All Whites' success.

"When that happens people have a tendency to get out and participate. When they participate ... we get some of those benefits."

Living & Giving stores and the sole Urban Loft store in Auckland (now combined with Living & Giving) were worst affected by weak discretionary spending.

Coriolis Research retail analyst Tim Morris said Briscoe had produced a good result with Duke pushing hard to adapt to changing conditions.

"He's pulled a rabbit out of the hat and credit to him for it. I think it's a sign of management adapting to the environment," he said.

Morris said it could be another nine months before the wider retail sector pulled out of the doldrums.

"If you made it past Christmas then you'd have passed the worst of it."

The country's biggest single retailer, The Warehouse, has about 8 per cent of the non-food and automotive retail market, worth about $19 billion in sales.

It said in January same-store sales over Christmas were flat year on year although Warehouse Stationery stores had seen a 3.5 per cent boost over the nine-week period. Net profit for the six months ending January 31 were expected to be similar to the previous year's figure of $56.8 million.

An analyst at Craigs Investment Partners, Daniel Reynolds, said nothing since had suggested there would be much change to the forecast.

"Compared to some specialty retailers they haven't done quite as well over the last few months but they're not lapping some of the very weak comparative periods that speciality retailers are."

Briscoe shares closed steady at $1.35.