Briscoes profit jumps 12pc to $14.9m

Briscoes Group's first half sales were up 6.2 per cent. Photo / NZPA

Briscoe Group, the homeware and sporting goods retail chain, posted a 12 per cent gain in first half profit, meeting its profit guidance as sales rose.

Net profit rose to $14.9 million in the six months ended July 28, from $13.3 million in the year earlier period, the Auckland-based company said in a statement. That's in line with the company's August 1 forecast for profit of at least $14.6 million. Sales rose 6.2 per cent to $217.4 million.

Briscoe's first half gross profit margin slid to 39.18 per cent from 39.68 per cent in the year earlier period as a slow start to winter hurt demand for its winter category sales in the first quarter. However the margin recovered during the second quarter, the company said.

"Gross profit margin suffered throughout the first quarter but recovered well during the second quarter to finish slightly down on last year's rate," managing director Rod Duke said in the statement. "We look forward to a continued improvement in customer confidence and spend levels during the second half of this year and are cautiously optimistic about the group's performance on the back of improving economic indicators."

Shares in Briscoe rose 0.8 per cent to $2.45, taking their gain this year to 11 per cent.

Earnings before interest and tax at the company's Briscoes Homeware stores rose 9 per cent to $13.4 million as sales increased 6.2 per cent to $145.8 million, the company said. Earnings at its Rebel sporting goods stores increased 29 per cent to $5.8 million as sales rose 6 per cent to $71.6 million.

Briscoe said it will continue to focus resources on growing its online business. Inventory levels rose 7 per cent to $69.2 million, reflecting additional stores, stock held for online sales, more products directly imported by the company and the build-up of stock for a new Briscoes Homeware store to open in Kerikeri in October.

The company is progressively changing the service counters at both of its chains to improve the counter configuration and allow extra selling space for additional merchandise.

The company will pay an interim dividend of 4.5 cents a share on September 30, up from 4 cents in the year earlier and accounting for 65 per cent of net profit.

Briscoe Group said it has changed the way it records costs to show costs relating to the distribution of a product from the central warehouse to stores will be recorded as cost of goods sold, rather than as store expenses and administration expenses, bringing its practices into line with other New Zealand retailers.