JB Hi-Fi up 29 per cent, six new stores to come

By Sarah Falson

SYDNEY: Narta member JB Hi-Fi today reported a record half-year net profit of $26.2 million for the half year ending 31 December 2006, compared with profits of $18.8 million for the same period the year before.

“We are pleased with another strong result with solid Christmas sales, our new stores traded well and we continue to grow our national market share,” said JB Hi-Fi CEO, Richard Uechtritz.

“Sales in January were soft, however sales to date in February have been in line with expectations and we are comfortable with analysts’ forecasts (average $32.7 million) for the full year net profit.”

If the full year net profit forecast is correct, then the company will earn $6.9 million more than it did for the fiscal full year 2006, during which JB Hi-Fi generated $25.8 million in profit.

As at 31 January, the company had 72 stores under its belt, seven of which were opened in the first half of the financial year. According to today’s announcement, the retailer expects to open six new stores in the second half of fiscal 2007.

Even so, though JB Hi-Fi store growth for the half-year period was 7.7 per cent, Clive Anthonys stores shrank 7.8 per cent, however the consolidated comparable store growth for the entire group was still up 5.8 per cent.

The report also mentions that the cost of doing business for the period was down by 81 bps, or 0.81 per cent, to 15 per cent, compared to 15.8 per cent a year earlier.

“Most categories were solid over Christmas with DVD, games and portable audio very strong. JB Hi-Fi has cemented itself as a leading games retailer and looks forward to further growth with the release of Sony’s Playstation 3 on 23 March 2007,” said the report.

The company claims it is growing its market share in the newly-introduced computer and games category, with the rollout to most stores to be completed by the end of this year. Over the Christmas period, 35 JB Hi-Fi stores sold computers and games.

“There is no reason why we cannot be a substantial player in this large growing market,” said Uechtritz.

"The goal is for every store to have some sort of computer offering,” he told AAP.

"Harvey Norman are one of the best retailers in that space and they are going to be a formidable competitor. But we’ll get a little market share from everywhere — in the main it always comes from the weaker competitors.”

Meanwhile, the pending acquisition of 11 New Zealand-based Hill & Stewart hifi and whitegoods stores is still on track for 1 March.

Hill & Stewart reportedly enjoyed a strong Christmas, with sales in January and February also favourable. Three leases for JB-HiFi-branded stores in New Zealand have now been signed – in Auckland Central Business District, Westfield Manukau City and Westfield Albany.

“Other potential sites are under negotiation,” the report said.

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