New Bunnings New Zealand general manager Toby Lawrance talks about their new distribution warehouse. / Jason Oxenham
Australia's softening housing market has not hurt Bunnings' Australian and New Zealand operations, after the business declared half-year operating revenue of A$6.9 billion (NZ$7.19 billion), up 5.2 per cent on the previous A$6.5b.
Bunnings is owned by ASX-listed Wesfarmers and in the company's result presented to the ASX last week, the Australasian operations of Bunnings were presented for the half-year to December 31, 2018.
A bullish presentation cited plans to broaden product ranges, expand service offerings and grow the click and collect business. Fourteen new stores are under construction in Australasia and six upgrades and expansions are being completed.
By April last year, Bunnings had 55 New Zealand stores: 27 Bunnings Warehouse outlets, 20 smaller-format stores and eight trade centres.
Michael Schneider, Bunnings group managing director, gave the Bunnings part of the ASX investor presentation where he cited "continued growth in consumer and commercial in all product categories and across all major trading regions."
That had been achieved despite "high rainfall [on Australia's] east coast and softening in conditions in the residential housing market."
Full-year accounts filed with the New Zealand Companies Office in New Zealand dollars in December last year showed that in the year to June 30, 2018, Bunnings made $1.2b from its operations here, up on the $1.1b for the June 30, 2017 year.
But cost of sales also rose from $768m to $871m. Bunnings New Zealand's gross profit rose from $350m in 2017 to $372m last year. Marketing expenses dropped from $10.6m to $9.6m but selling expenses jumped from $201m to $212m. Because the business is continuing to expand and open more stores, occupancy expenses rose from $42.7m in 2017 to $48.9m last year.
Operating profit before income tax and costs rose from $44.8m to $59.3m.
Bunnings New Zealand general manager Toby Lawrence. Photo/Jason Oxenham
On an Australasian-wide basis, revenue across the 2018 financial year totalled A$12.5 billion. By June 30, 2018 Bunnings had 369 stores: 259 warehouses, 78 smaller format stores and 32 trade centres and three frame and truss businesses operating here and in Australia.
Bunnings says that by June 30 last year, it employed more than 43,000.
In New Zealand, the business is run by Australian Toby Lawrance who is aiming to almost double revenue in the next five years and employ a further 1200 to 1500 staff.
He took over from Jacqui Coombes in August 2017 and early last year, said the target was for annual sales revenue to rise from $1.3 billion in the June 30, 2018 year to $2b by 2023.
"It's a multi-pronged approach to getting new sites and with smaller regional stores, there's opportunities for upgrades or replacements. Our expansion in the next five years is to gear up. New stores will be in regional and metropolitan areas," said Lawrance last April.
The ASX presentation forecast "moderated trading conditions expected to continue" here and in Australia but said Bunnings was positioned for growth and "building towards full online transactional offer for Australia and New Zealand."
