Appliance Distributor Shriro Rocketing Along, No Debt & 180% Growth
Both the Chairman and CEO of ASX listed distributor Shriro, who went last year without a showroom or offices, have described 2020 as “The most challenging year ever”. But this it did not stop the distributor of Omega, Casio, and Blanco and Heston barbecues products from delivering record growth and profits.
Shiro’s revenue increased by 11.2 per cent to $191.3 million and net profit after tax increased to $18.2 million, with $4.2 million in head office lease savings and government subsidies, this was up 180 percent over the prior year.
According to CEO Tim Hargreaves Shriro is heading into the current year with no debt, cash of $17.6 million and a strategic global plan in the making to best support growth initiatives and optimal deployment of capital over the coming years.
Hargreaves said “Change in the daily routine of Australians led to increased demand for many of Shiro’s product categories. The Company achieved record sales in Casio electronic musical instruments and Everdure by Heston Blumenthal barbeques” during the COVID-19 lockdowns.
The Company paid $5.7 million in dividends during the year and concluded 2020 with a net cash balance of $17.6 million.
Recently the Company moved into new offices at Chatswood on Sydney’s North Shore.
Hargreaves said that when COVID-19 hit, manufacturers scaled back production at a time when demand for consumer durables increased significantly which led to product supply shortages. In addition to the supply challenges, delays with port logistics led to late arrivals of products only added to the inventory management challenges.
In his statement to the ASX Hargreaves said that “Last year saw the finalisation of the three-year program to rationalise our operating cost base” and that the business is now well placed to strategically invest in additional technology platforms including digital marketing and
customer relationship management programmes to engage with customers better, improve our value proposition and by using data and insights, to also enhance our overall customer experience.
He said that in the future technology will enable Shriro to be future fit, able to adapt quickly and innovate as effectively as possible. The expansion of their dealer network.
The business also reported that business in South Africa, Israel and Russia also reported good penetration despite the COVID-19 lockdowns.
Despite recent controversies involving Chef Heston Blumenthal the Company has laid the distribution foundation for the continued growth of the Everdure by Heston barbecue range as well as them
award winning ‘Aura’ air movement product, which is now also available in the UK, Germany, and USA.
Overall, international barbecue sales increased 65 percent compared to the prior year. Even with travel restrictions remaining in place for the upcoming northern hemisphere summer, Shriro expects sales of barbecues to grow at a similar rate as in 2021.
Having established a USA subsidiary in 2019, the Company is anticipating 2021 to be a year of growth on the prior period, with specialty retailers adjusting well to COVID-19 restrictions and our e-commerce strategy starting to take effect.
The Company is also beginning to see the benefits of the marketing investment in key e-commerce channels, with both Amazon and Best Buy sales increasing tenfold year to date.
Shriro will continue to increase its investment in consumer-focused digital marketing activities, particularly in key European markets where the product has been received well and sales traction continues to gain momentum. A
According to Shriro Chairman Stephen Heath trading margins improved to 39.6% whilst Operating Expenses decreased by 11.8% to $43.5 million compared to the prior corresponding period of $49.3 million.
He said that during the past year the Board, management and staff participated in a program of salary reductions. Subsequently, and because of the improved trading conditions and operating performance, staff, with the exception of the CEO, CFO & Board were fully.
re-imbursed those salary reductions.