By James Wells
MELBOURNE: JB Hi-Fi today reported a record net profit of $25.8 million as sales from its own stores grew by 7.7 per cent, while Clive Anthonys stores declined 5.5 per cent.
JB Hi-Fi sales grew by 36 per cent to $945.82 million including the company’s 70 per cent stake in the seven Clive Anthonys stores.
In a statement to the Australian Stock Exchange, JB Hi Fi chief executive officer, Richard Uechtritz said the company’s cost of doing business for the financial year ending 30 June 2006, dropped from 17.2 per cent to 17.1 per cent year on year and gross profit remained steady at 22.9 per cent after “backing out the impact of games”.
As of 30 June, JB Hi-Fi had 66 stores, including 18 new stores opened during the financial year. These stores included 10 stores in New South Wales at: Tuggerah, Miranda, Chatswood, Castle Hill, Warringah Mall, Macarthur Square, Penrith, Hornsby, Mt Druitt and Liverpool; four stores in Victoria at Southland, Epping, Maribyrnong and Geelong; two stores in Queensland at Robina and Loganholme as well as a store at Colonnades in South Australia as well as its first store in the Northern Territory at Casuarina.
The company expects to open 13 new stores by 30 June 2007.
Uechtritz believes the company’s growth factors include its continued focused exposure to home entertainment product market as well as its recently opened stores that continue to mature strongly.
He claims the new JB Hi-Fi store rollout will continue, capitalising on a plethora of site opportunities, while the Clive Anthonys business provide exposure to different markets and demographics.
In a trading overview presented to investors, Uechtritz said the last 12 months has been a challenging year for all retailers, and consequently this was a pleasing result.
JB Hi-Fi has joined the chorus of other publicly listed companies by predicting that the next 12 months will be even more challenging due to low consumer confidence brought on by high petrol prices, interest rate rises and slowing retail spend.
“Whilst discounting has been a feature of the overall market during the last 12 months, this has had relatively little impact on JB due to our already discounted offering combined with better buying from our suppliers, evidenced by our stable gross profit margin at 22.9 per cent after backing out the impact of games.”