By Claire Reilly
David Jones released its half-yearly profit results today, with the company reporting a staggering 19.6 per cent drop in profits (after tax), down from $105.7 million in 1H FY2011 to $85 million in 1H FY2012.
Earnings before interest and tax (EBIT) were also down, falling 18.1 per cent – from $153.7 million to $125.8 million – year-on-year. However, the EBIT result for the company’s department store division was down 22.6 per cent, which was offset by a 7.5 per cent rise in DJs’ financial services division. Overall, department store earnings fell from $130.9 million to $101.3 million, year on year.
Earnings per share fell 21.2 per cent to 16.4 cents per share, while the company’s full-year dividend fell 19.2 per cent to 10.5 cents per share. As previously reported, sales for the period were $1.01 billion, representing a 6.7 per cent drop on the previous year.
Today’s grim news follows a voluntary trading halt that was issued by the company on Monday, pending a presentation on the company’s Future Strategic Direction, which is due to occur today.
In the profit results press release, issued to the Australian Securities Exchange, comments from DJs CEO Paul Zahra were few. The company chief was only quoted discussing store refurbishments, one of the few positive notes to come out of today’s announcement.
“We are pleased with the performance of our recently refurbished Warringah Mall (NSW), Chadstone (VIC) and Marion (SA) stores,” said Zahra in the statement. “We have commenced refurbishment of our Toowong Village (QLD) store and are making good progress in the roll-out of our brand installations.”
Indeed, the financial highlights noted in the first pages of the company’s results presentation were few and far between. The company made “good progress in clearing inventory,” according to the statement, while “sales tracking improved substantially from -11.2 per cent in 1Q12 to -3.1 per cent in 2Q12”.
As far as profits were concerned, the company announced that the massive $20 million bleed was “in line with guidance”.
UPDATE: The company has released details on its Future Strategic Direction, anticipating a fully-year decline in profits of 30 to 40 per cent.
"The Company has implemented a number of new operational and strategic initiatives which will impact total costs in the balance of FY12," a spokesperson said. "These together with the expected continuing challenging trading conditions and the cost of clearing excess Inventory are expected to result in a decline in FY12 PAT of 35-40 per cent."