By Chris Nicholls

BRISBANE: BSR Group has stayed true to predictions made last week that it would post profit and dividend increases, announcing an $800,000 net profit before tax, with half of it going to shareholders.

The results, for the full year to 31 March, go against the general market trend, with rivals Clive Peeters, Harvey Norman and Retravision all quoted as predicting either drops year-on-year, or expecting losses.

These dividend payments totalled 15.2 cents in the dollar and were made in June, 2007, and October, 2007. BSR Australia Ltd, the parent company of the Group, declared a final dividend of 10 cents per share fully franked, which was paid in April, 2008 — this will be recognised in next year’s result.

BSR Group general manager, Ian Brown, said it was a strong result for the company and its shareholders, given the economic climate.

“The latter half of the year saw the start of the economic slow-down which impacted on discretionary spending in the wake of higher borrowing costs and higher fuel and food prices,” he said.

“Despite the downturn and subsequent reduction in rebate income (against budget), the BSR Group continued to provide the same level of advertising and core bonus support to its retailers.”

Brown said total income increased to $19.8 million compared to $9.1 million for the five months to March 31, 2007. At the half-year to September 30, 2007, income growth was strong, fuelled by purchase rebates generated at the national conference and improved like-for-like sales at a retailer level.

Brown also said that the total return to retailers in the form of the cost of rebates, goods and services to retailers during the year increased to $14.2 million — including an additional $1.6 million relating to the one per cent core bonus paid to the Platinum Partner suppliers.

“These costs were maintained, despite the reduction in rebate income,” Brown said.

“As a result, the cost of these services rose significantly from 58.5 per cent in 2007 to 71.7 per cent of total income in 2008. These expenses included electronic and printed advertising and promotional campaigns, direct rebate payments, core bonus incentives and IT infrastructure services.

“Whilst this has impacted on group profitability, the result has allowed significant returns to be made to shareholders and at the same time maintained the group’s strong balance sheet position.”

The BSR group’s consolidated net assets increased from $4.3 million to $4.4 million — with the company saying that this enables future investment in BSR’s infrastructure and other value-added services to take place.

Shareholders and fellow retailers will shortly receive a copy of the Annual Report and Financial Report for 2008. Shareholders will also receive a notice of all resolutions to be voted on during the upcoming Annual General Meeting (AGM) to be held in July. The AGM will take place in Hanoi during the BSR Group’s national conference.