By Keri Algar
SYDNEY, NSW: JB Hi-Fi has today reported a 26 per cent increase in full year profit to $118.7 million, up from $94.4 million in the previous year.
A record $2.731 billion of sales for the year ending 30 June, up 17 per cent on FY09, was credited to strong growth in computers, telecommunications and audio visual equipment.
Consumer demand was motivated by technology innovation in the categories, according to a statement released on the Australian Securities Exchange.
The cost of doing business was down to 14.4 per cent driven by a low cost culture, labour productivity and marketing economies of scales.
JB Hi-Fi also cited the maturation of recently opened stores for the positive results. The company opened 23 stores in FY10 and has a total of 131 stores in Australia and 10 in New Zealand. JB Hi-Fi has opened 62 stores in the last three years.
The company is cautious about the future.
“We expect sales growth in the first half of FY11 to be challenging as consumer spending remains subdued,” said JB Hi-Fi on the ASX.
“However, our proven unique retail model is best equipped to take advantage of the expected increase in consumer spending in the lead up to the critical Christmas trading period.”
The company expects “sales in FY11 to be circa $3.2 billion, a 17 per cent increase on the prior financial year."
JB H-Fi CEO, Terry Smart, said he was satisfied with the record results.
“We are pleased with this solid result, especially given we were cycling against a strong prior year growth driven by the government stimulus packages and low interest rates,” said Smart.
“Our strong retail model remained very resilient throughout this tough economic period; it’s a testament to the strength of our team.”
According to the JB HiFi investor presentation the retail model includes:
-A unique and engaging retail environment.
-Low cost of doing business culture.
-Genuine, passionate and knowledgeable sales staff.