The number’s up for JB Hi Fi as the annual report reveals today

By Martin Vedris

SYDNEY: JB Hi-Fi Limited today released its annual report which highlights revenue growth of 36 per cent, EBIT growth of 47 per cent and NPAT growth of 56 per cent for the year ended 30 June 2007—a year in which 13 additional JB Hi-Fi stores were opened.

In the report’s personal address statement from chairman, Patrick Elliott and CEO Richard Uechtritz, some reasons for the success are summarised:

‘This was achieved through a combination of strong comparative stores sales, continued expansion of our product offering, the maturing of the 18 stores opened last year and the opening of 13 new stores during the year.’

‘Whilst competition remains intense and the product mix has switched to lower margin categories, JB Hi-Fi’s low cost of doing business, together with its improved buying, has insulated it from any significant margin pressure. Margin declined slightly by 39 base percentage points to 22.1 per cent over the year. Product mix, in particular the continued rapid expansion of games and JB Hi-Fi’s entry into the computer market, has been the main factor contributing to this slight decline.’

According to the report, the consolidated profit after tax of the group for the financial year, that was attributable to members of the parent entity was $40,389,000, which is 56.5 per cent greater than the consolidated profit after tax for the previous financial year of $25,813,000

Consolidated sales for the financial year were $1,281,837,000, which is 35.5 per cent greater than the consolidated sales for the previous financial year of $945,821,000.

The group recorded a full year net profit after tax of $40,389,000 for the 12 months ending June 2007, up 56.5 per cent on the previous corresponding period of $25,813,000;

Total sales were up 35.5 per cent to $1,281,837,000 and comparable store growth was 11.4 per cent. JB Hi-Fi stand alone was 12.6 per cent and Clive Anthonys 2.7 per cent.

Gross margin was 22.1 per cent for the period, down 0.4 per cent from the previous period.

Of the group’s 13 new stores opened during the year, four were opened in Victoria, three in Queensland, two in New South, Wales, two in Western Australia and one each in South Australia and New Zealand.

The company stated that it acquired the remaining 30 per cent of Clive Anthonys from its founder Clive Savage in July 2007 for approximately $7 million.

According to the company statement, ‘JB Hi-Fi management took operational control of the company early in the second half and has enjoyed some immediate success with second half comparative store growth increasing to 15.7 per cent. We remain encouraged that the Clive Anthonys business provides access to the large whitegoods, cooking and air conditioning markets whilst leveraging JB Hi-Fi’s volumes in browngoods, computers and games. The first Clive Anthonys store outside of Queensland was opened at Castle Hill in Sydney in July 2007 and is trading well.’

JB Hi-Fi also reported that its success in the games market has continued since the category’s introduction in May 2005. The company’s management estimated that it is now the second largest retailer of electronic games in Australia.

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