KEY POINTS:
Briscoes says it expects to deliver a stronger second-half performance but can't yet say whether it will match last year's profit of $26 million.
The company yesterday delivered lower first-half profit of $10.53 million - down from $12 million in the same period a year earlier.
Group managing director Rod Duke said he was disappointed that the profit was down but there were a number of factors that needed to be considered.
The trading environment had been much tighter than in the first half of last year, he said.
And there was a late start to winter, which impacted on heating and apparel categories in relation to both sales and inventory levels.
Also he said the homeware stores Living & Giving and Urban Loft were highly seasonal and had their profits heavily weighted to the second half of the year.
"The group is well placed to perform better in the second half of this year. However, the uncertainty of the economic environment makes it difficult to predict at this stage whether we will match last year's full-year profit result of $26.048 million," Duke said.
Since July 2006, the group's financial position has remained strong and at July 29, 2007 there was cash in the bank or on deposit of $34.83 million, with no borrowings, the company said.
Macquarie Equities retail analyst Warren Doak said their were no major surprises in the result.
All retailers were experiencing a high degree of volatility in their trading this year, he said.
They were discounting to ensure continued sales growth but that meant margins were lower and that was eating into bottom line profits.
Briscoes managed to increase sales revenue by 13.7 per cent on the first half of the 2006 year. But gross margins fell from 41.28 per cent to 41.02 per cent.
But people were still spending and Briscoes was "doing what it needed to do to keep momentum going".
Briscoes shares closed unchanged yesterday at $1.51.
