JB posts $65.1 million profit

By Chris Nicholls

MELBOURNE: JB Hi-Fi has beaten its own recently revised expectations to post a 61 per cent increase in profit for the full financial year.

The $65.1 million net profit was up from the $40.4 million posted last financial year, and came on the back of a 43 per cent sales rise to $1.829 billion.

JB Hi-Fi’s most recent profit expectation upgrade suggested the company would post $64 million in profit.

Consolidated comparable sales growth came in 15.3 per cent higher, with games, computers, movies and A/V the main drivers, the company said.

Despite the profit rise, gross margin remained at 22.2 per cent, which could be down to lower-margin categories such as computer games and computers. Consolidated gross margin was 21.9 per cent.

The company also managed to reduce its cost of doing business again, down to 15.3 per cent, down from 16 per cent last year.

Earnings before interest and tax (EBIT) rose to 5.6 per cent from 5.1 per cent last year.

“We are extremely pleased with this very strong result, having traded well during what is considered to be the weakest retail climate for many years,” said JB Hi-Fi chief executive, Richard Uechtritz.

He said the results reinforced the company’s chosen business model and while he admitted the retail outlook was “less certain than at previous reporting dates” JB’s focus on home entertainment had kept it resilient.

And Uechtritz said he expected the good times to continue.

“We continue to grow our market share as recently opened stores mature, we open new stores, expand our offering and reduce our prices on the back of increased economies of scale and a continued focus on costs. We expect to have another strong year of sales and earnings,” he said.

As mentioned previously, JB Hi-Fi will open 24 new stores in the current financial year. JB said these new stores, and maturation of 33 recently opened stores, would continue to “drive solid top- and bottom-line growth”.

The first seven weeks of trading for FY09 have seen 19.2 per cent comparable consolidated store growth, and with Christmas approaching, Uechtritz maintained his FY09 guidance of approximately $2.35 billion – 28 per cent up on FY08.

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