After a patchy start to FY17, Good Guys recovers.
JB Hi-Fi CEO Richard Murray has provided his first public comment in relation to the acquisition of The Good Guys in late 2016.
“As indicated at the time the acquisition was announced, given the proximity to the critical Christmas trading period for both JB Hi-Fi and The Good Guys, there would be limited integration undertaken in 2016.
“As we move into 2017, we are taking a deliberate and considered approach to how we integrate and leverage the scale of the Group. Our work to date has vindicated the rationale regarding the power of the combination and the strategic merits of the acquisition. We reconfirm our synergy assumptions of $15 million to $20 million per year after a three year integration period and remain highly confident in our ability to realise these benefits.”
In a company statement issued to the Australian Stock Exchange today, Murray provided extensive data following the acquisition on 28 November last year.
- For December 2016, total sales were up 0.7 per cent on the same month a year prior to $263.1 million with comparable or ‘like for like’ sales down 0.7 per cent
- December earnings of $14.3 million was described as “pleasing and ahead of the previous corresponding period driven by improved sales mix and good cost control”
- Trading for the first five months of the FY17 financial year (July-November 2016) was impacted by the JVP transition/corporatisation program and overall market declines in seasonal appliances (heating and cooling).
- Trading from December onwards has improved and this is expected to continue for the remainder of the second half of the financial year
- For the period under JB Hi-Fi ownership, The Good Guys sales and earnings is expected to remain in line with those generated in the same timeframe a year earlier
- In January 2017, total sales growth for The Good Guys was 5.0 per cent with comparable or like for like sales of 3.5 per cent