In its stylish 2015 Annual Report, Myer chairman Paul McClintock (pictured) said that 2016 would be a transition year as the company invested between $100 million and $120 million to underpin future growth. However, Myer expects to return to sustainable profit growth in 2017.
Myer, which is still an important channel for small appliance sales, believes that, as a result of this investment and a recent $221 million capital raising, it will see underlying net profit to fall a further 15%, to between $64 million and $72 million. Added to this will be another $35 million to $45 million in one-off restructuring costs.
In FY2015, the Group’s total sales increased by 1.7% to $3,195.6m, driven by new stores and refurbishments, as well as strong growth in the online business. Myer has now delivered comparable store sales growth in 12 of the last 13 quarters.
Former Myer chief executive Bernie Brookes earned $4.3 million in his final year at the helm of the department store chain despite a 21% fall in underlying profits in 2015.
Myer’s latest annual report showed that Brookes’ total remuneration jumped 65%, from $2.57 million to $4.25 million in 2015, including a $1.55 million termination benefit and a 27 % increase in his base salary to $2.33 million.
Myer is seeking shareholder approval at the annual meeting on November 20 to issue CEO Richard Umbers performance rights worth $1.08 million, exercisable if Myer achieved growth targets for return on funds employed and sales per square metre over the next three years.
Umbers, who joined Myer in 2014 as chief information and supply chain officer, earned $1.5 million in 2015, including a base salary of $792,129, a sign-on bonus of $590,000 cash and $400,000 in performance rights.
According to the annual report, the Myer board is currently reviewing its remuneration framework to ensure it meets the needs of the business during the transformation program.