Godfreys profit slides almost 20%

As retailer goes ‘back to basics’.

Despite efforts to improve sales with the introduction of new products and progress made in its franchise strategy, Godfreys has reported a 2.9% decline in revenue to $174.1 million and a 19.8% dive in EBITDA to $14.1 million.

Godfreys managing director, John Hardy said the company’s FY2017 results reflect the disciplined approach management and the board have taken to “get the basics right” to position the business for future growth.

“In 2017, we introduced a number of new products, including a range of stick vacs and an expanded range of commercial products, refreshed our retail staff training program and incentive structures, enhanced the efficiency and effectiveness of our advertising and introduced ‘click and collect’ and ‘from warehouse to your house’ features to support sales.

“Strong demand saw 22 stores converted to franchises in FY17, for a total of 100 franchise stores out of a total network of 222 stores. The conversion generated franchise fees of $5.3 million and improved sales performance from the converted stores.

“Improving performance across the retail network and wholesale business is expected to flow through to improved results. We expect the contribution from initial franchise fees to reduce in FY2018 and will be weighted to the second half of the financial year. As a result, underlying EBITDA is expected to be at similar levels but with a change in mix,” he said.

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