JB Hi-Fi shares shoot past $10 after profit upgrade

By James Wells

MELBOURNE: JB Hi-Fi shares soared past $10 today after the company said it expects profit for the year ending June 30, 2007 to be in the range of $37-$39 million or up to 51 per cent higher than the previous year net profit after tax (NPAT) of $25.8 million.

JB Hi-Fi shares increased by almost seven per cent to $9.91 in early afternoon trading after hitting an all-time high of $10.07 earlier in the day.

In a statement to the Australian Stock Exchange today, JB Hi-Fi CEO Richard Uechtritz said that sales are expected to be in excess of $1.2 billion for the year ending June 30, 2007, an increase of 30 per cent on the previous year.

Comparable store sales increased to 10.2 per cent for the 11 months to May 31, 2007.

After better than expected trading since February, JB Hi-Fi said it expects profit for the financial year to grow by between 43 per cent and 51 per cent on the previous year to between $37 million and $39 million. When results for the half year were released in February, NPAT expectations for the full year 2007 were $32.7 million.

"JB Hi-Fi expects it’s [sic] guidance on profit expectations for the full year FY07," the company said in a statement to the Australian Stock Exchange.

Uechtritz said that newer games and computer categories continue to show promising growth and “should be solid performers for JB Hi-Fi in years to come".

"Our unique retail model is performing strongly and should continue to benefit from strong comparable store growth, many new store opportunities, a low cost of doing business, better buying power and good management," Uechtritz said.

The company expects to finalise the rollout of the computer category to most stores by early 2008.

Sales through Clive Anthonys improved in the second half, Uechtritz said, helped by stronger trading conditions, management changes and a restructure more closely aligned to those of JB Hi-Fi operations.

"A closer alignment to the JB Hi-Fi way of operating has [sic] resulted in improved comparable store sales, currently at -0.95% (11 months to the 31st May 2007) compared to -7.8% at the half year. The first Clive Anthonys store will open at Castle Hill in August and the company is perusing other opportunities for Clive Anthonys in Sydney," the statement said.

Sales through the New Zealand based Hill & Stewart chain are said to be meeting expectations. JB Hi-Fi took control of the retailer in March.

The first of at least four JB Hi-Fi stores opened in New Zealand in April and is reported to be trading well. Three more stores are expected to open before Christmas.

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