David Jones profit rises 10 per cent

MELBOURNE - David Jones, Australia's second-biggest department store, said first-half profit rose 10 per cent on cost reductions and demand for clothing and cosmetics.

Net income rose to A$100.5 million ($129.7 million), or A19.4c a share, in the six months ended January 23 from A$91.2 million, or A17.7c, a year earlier, the Sydney-based firm said yesterday. The result matched David Jones' February 9 forecast for 10 per cent growth.

Putting most service contracts out to tender, including advertising, printing and maintenance, increased profit margins to a record high and limited the impact of slowing sales growth after the Government ended cash stimulus payments. David Jones affirmed its forecast for second-half profit to rise as much as 10 per cent.

David Jones shares closed yesterday up 6c at A$5.13.

The stock rose 70 per cent last year, more than double the 31 per cent rise in the benchmark S&P/ASX 200 index. Department-store earnings before interest and tax rose 9.8 per cent to A$125.6 million.

- BLOOMBERG