JB announces record profits and sales, new capital city sites

By Chris Nicholls

MELBOURNE: JB Hi-Fi almost punched through the billion dollar mark in sales for the first half of FY08, with a record $989 million (up 60 per cent on the $659 million a year ago) and a 60 per cent rise in net profit to $41.9 million.

The figures came after strong Christmas sales and solid months beforehand. Visual, games and computers showed “very good growth”, according to the ASX announcement.

Comparable store growth over the half year came to 18.8 per cent, and while the chain opened 12 Australian and three New Zealand stores in that period, cost of doing business dropped 70 basis points to 14.3 per cent of revenue. Earnings Before Interest and Tax (EBIT) margin rose to 6.56 per cent, up 22 basis points.

JB Hi-Fi showed its confidence in the year ahead with a 100 per cent increase in fully-franked dividend to 10 cents.

While all other indicators were up, gross margin fell from 22.1 to 21.6 per cent, which chief executive Uechtirtz put down to their move into computers and games.

He denided any drop came from the increasingly competetive flat panel market, saying "flat panel [margins], if anything, have gone up." 

Sales in January and February to date have continued the momentum of the first half, and the company upgraded its forecast to $1.8 billion for the full financial year, up from $1.7 billion. Full financial year profit is expected to rise to between $57-60 million, as 41 to 49 per cent rise on the previous year.

JB Hi-Fi also revealed it was also in negotiation to secure sites for new stores in Melbourne, Sydney and Brisbane, as well as open five stores in New Zealand, according to chief executive Richard Uechtritz.

Speaking to Current.com.au, Uechtritz said the new capital city stores would add to the shops due to open in both Melbourne and Sydney this month, but would not give further details of their possible locations.

The New Zealand stores would include the proposed St. Lukes site, due to open in July this year and the new Hamilton store, which he said was due to open in the second half of the 2008 calendar year.

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