Briscoe first-half profit jumps 24%

Briscoe Group, the homeware and sporting goods retail chain, boosted first-half profit 24% as it improves the layout of its stores and benefits from a strong New Zealand dollar. The stock jumped to a record.

Profit rose to $18.5 million, or 8.37 cents a share, in the 26 weeks to July 27, from $14.9 million, or 6.81 cents, in the year earlier period, the Auckland-based company said in a statement. Profit rose 17% excluding a $1.34 insurance payment related to the 2011 Christchurch earthquake, Briscoe said. Sales rose 6.5% to $231.5 million.

The company, which operates 78 Briscoes Homeware, Rebel Sport and Living & Giving stores, has changed the layout of many of its stores to increase the available selling space and improve the flow of stock through to the sales floor. Briscoe has benefited from a higher New Zealand dollar lowering the cost of its imported products, allowing it to lower its prices as well as increase its profit margins. Gross profit margin rose to 39.6% in the latest half from 39.18% in the year earlier period.

"We are very pleased to finish this first half with strong growth recorded in sales, gross profit and bottom line profit," said managing director Rod Duke. "We are also optimistic about the operational and financial outlook for the group."

Briscoe didn't provide a full-year earnings forecast. The company increased its first half dividend to 5.5 cents a share from 4.5 cents in the year earlier period. The dividend will be paid September 30.
Shares in Briscoe jumped 3.5% to a record $3, and have gained 21% this year.

Briscoe has increased its profits even as rivals including Warehouse Group warned earnings would be dented by a warmer start to winter and as retailers face increased rivalry from internet competitors.
The company said its online business continues to grow significantly and it will invest in improving the functionality and performance of tis ecommerce platform in the second half of the financial year.

In the first half, earnings before interest and tax at the company's homeware unit rose 18% to $15.9 million as sales increased 5.3% to $153.6 million.

The sporting goods unit boosted earnings 42% to $8.3 million as sales rose 8.8% to $77.9 million.
During the first half the company extended its Ashburton Briscoes Homeware store and refurbished its Rebel Sport store at Manukau. In the second half, the company will open a new Rebel Sports store at Coastlands in Wellington in the existing Briscoes Homeware store site and the Briscoes store will move to an adjacent larger site. It also plans to relocate its Briscoes and Rebel stores in Wanganui to a new purpose built location with shared back-of-house facilities.

Extensions and relocations are also planned for Briscoes stores in Taranaki Street, Wellington, as well as Taupo and Hamilton during the 2015-2016 financial years.

By press release