Home > Latest News > JB hi-fi Delivers Record Result Sales Up 8.5% Profits Up 11%

JB hi-fi Delivers Record Result Sales Up 8.5% Profits Up 11%

JB hi-fi Delivers Record Result Sales Up 8.5% Profits Up 11%

Leading consumer electronics and appliance retailer JB Hi-Fi has reported an 11.5% jump in profits and an 8.3% increase in sales for the full year ending 30 June 2016.

The company also reported that gross margins have increased three bps to 21.9%, despite an eight-week election campaign, a softening in consumer sentiment and heavy discounting by online retailers and competitors.

Net profit after tax climbed 11.5% to $152.2 million versus $136.5 million in 2015.

Sales for the full year was $3.95 billion and increase of 8.3%, comparable sales were up 5.4%.

The net profit result beat consensus forecasts around $146.6 million and exceeded JB Hi-Fi’s $143 million to $147 million guidance, which was updated in May.

Strong promotions in May and June, including generous discounts on computers, helped JB Hi-Fi grow sales in the fourth quarter even though it was cycling 8 per cent like for like sales growth spurred by small business tax incentives in June 2015.

JB Hi-Fi CEO, Richard Murray, said “We had a great finish to the financial year and are proud to deliver both net profit and earnings per share up 11.5%. Particularly pleasing was how we cycled a strong June in the prior year, with good sales driven by tax time buying.”

The Company had 194 stores in Australia and New Zealand at 30 June 2016. During FY16, the Company opened nine new stores and closed two stores.

The Company expects to open a total of seven new stores in FY17 and continues to review opportunities for its store rollout beyond 214 locations across Australia and New Zealand.

Of these 194 stores, 59 were JB Hi-Fi HOME stores, with five new JB Hi-Fi HOME stores opened and 13 existing is JB HI FI stores converted to JB Hi-Fi HOME during FY16. The Company is targeting a total of 75 JB HI FIHOME stores across Australia and New Zealand.

In addition to the HOME store roll-out, the Company continues to introduce small appliances to its existing store network.

Online sales continue to grow, up 35.8% in FY16, this represents 3.0% of total sales. More than 1.3 million consumers visit the JB Hi-Fi Website every week.

During the past six months 4Square Media, who are a media partner of JB Hi-Fi, has seen a significant increase in readership of SmartHouse magazine which is available via the JB Hi-Fi Website.

Murray, said “We continue to leverage the benefits of a strong online presence combined with our convenient store locations. We are very focused on building a great customer experience online and are pleased with the progress made in FY16.”

JB Hi-Fi Solutions also saw double digit sales and earnings growth in FY16 and remains on track to deliver on its longer term aspirational sales target of approximately $500 million per annum, through both organic growth and strategic acquisitions.

“JB Hi-Fi Solutions is a key driver of our future growth. The combination of our product and service offering, along with our extensive store distribution network, continues to resonate with our clients.” said Murray.

The Board has declared a final dividend of 37 cents per share fully franked.

Currently JB Hi-Fi s in negotiations to buy arch-rival The Good Guys after being given approval by the Australian Competition and Consumer Commission last week.

The company said in a statement to the ASX today that JB Hi-Fi has made no decision and nor has it entered into any agreement with respect to an acquisition of The Good Guys. JB Hi-Fi understands that The Good Guys are looking at a range of options including an IPO on the ASX.

The company went on to say that JB Hi-Fi evaluates all possible opportunities against a range of factors and would only pursue an acquisition if it made compelling financial sense for its shareholders.

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