Changes benefit Briscoe

Briscoe Group reported a strong rise in half year net profit yesterday, but chief executive Rod Duke joined the chorus of retailers warning of tougher times ahead.

Results for the six months to July showed net profit after tax of $12 million, up 20.9 per cent on the $9.93 million for the same period last year.

Analysts said the result showed the benefits of improved stock control and a move away from discounting.

Results adjusted for a move to new financial reporting standards showed gross margin percentages rose from 40.05 per cent to 41.28 per cent.

Sales of $167.33 million were up 8.9 per cent on $154.37 million last year.

Duke said the results showed Briscoe Group was one of the few retailers not "chasing their tail".

But he said second-half profit growth would be lower than the first half. Sales since the July 31 balance date reflected a more challenging environment.

Same-store revenue for Briscoes Home Stores was 4.2 per cent up on last year, and Rebel Sport same-store sales increased 1.4 per cent.

Duke said the results showed projects to improve stock management were starting to bear fruit.

Stockbroker UBS's head of research, David Lane, said the results showed continued momentum in a tough market.

Sales growth was ahead of expansion and margin expansion.

He said Briscoe was paying 60 per cent of profit in dividends and still had $40 million to $50 million on the balance sheet.