Eastern Hi Fi begins year with a happy tune

Importer and retailer Eastern Hi Fi has made a strong start to the new year, beating its profit forecast.

The company has reported a $712,000 net profit after tax for the year to December 31. Its prospectus forecast was $703,000.

The company listed on the stock exchange's NZAX market in December after the successful completion of a $5 million initial public offer.

As stated in the prospectus, the group did not declare a final dividend for the 2004 financial year.

Previous corresponding full-year figures were not provided.

Eastern Hi Fi shares closed up 2c yesterday at $1.

Founder and managing director Steve Allbury said same-store sales in the first two months of this year were up 11 per cent and group turnover was up 15 per cent.

The company had opened a new store in Palmerston North and acquired an existing store in Gisborne, and is negotiating the purchase of two more stores in the North Island. "We have the opportunity to purchase these existing retail stores with established cash flows. We decided this would be preferable to opening two new stores ... "

Once these deals are complete, Eastern Hi Fi will have 10 retail stores plus a custom-design and build operation.

To cope with the increased turnover, and accompanying inventory, the group will move to larger premises in Mt Wellington.

"We have had a far busier start to the year than anticipated. In less than three months, we are close to passing the operational milestones we had established for the year," Allbury said.

Looking forward, company chairman Rick Bettle said increases in interest rates usually had little impact on Eastern Hi Fi's sales and added that the group continued to benefit from the higher exchange rate with the US dollar.