Briscoe expects record annual profit after demand surged following lockdown

Tuesday, 9 February 2021

Homewares and sporting goods retailer Briscoe Group says profit hit a new record over the past year.

Retailer Briscoe Group is forecasting a record full-year profit after sales soared following lockdown. Its shares hit a new high.

The company, which includes Briscoes, Rebel Sport, and Living & Giving, expects net profit to exceed $70 million in the 53 weeks to January 31, up from $62.6m the previous year. That’s even more remarkable given the previous year was boosted by $9.5m from its Kathmandu Holdings investment, while it got nothing this year, managing director Rod Duke said.

Total sales for the year rose 7.5 per cent to $701.8m. Homeware sales lifted 6.9 per cent to $439.2m while sporting goods sales increased 8.5 per cent to $262.6m. The latest year includes an extra week as the company has to realign its financial calendar every five to six years.

Briscoe and other retailers including The Warehouse Group and Michael Hill International have benefited from a bounce back in sales after lockdown as restrictions on overseas travel and pent-up demand prompted shoppers to open their wallets.

Briscoe managing director Rod Duke says the record profit is a “fantastic milestone” for the group, particularly in a year with so much upheaval and uncertainty.

* Briscoe third-quarter sales rise 15%; retailer upbeat heading into Christmas

* Briscoe to pay back $11.5m wage subsidy after 'strong sales'

* 'Unparalleled demand' delivers strong result for Briscoes

In the fourth quarter, which included the key Christmas trading period, sales rose 18 per cent to $248.1m. The latest quarter included 14 weeks compared with 13 weeks in the year earlier period.

“The group has continued to perform significantly ahead of last year through the final quarter of the year, which has resulted in group sales surpassing $700m for the first time,” Duke said. “That’s a fantastic milestone for the group to achieve, particularly in a year with so much upheaval and uncertainty.”

Duke said the company’s Black Friday promotion in November was its biggest ever sales day, surpassing the previous record day by 19 per cent. Boxing Day sales four weeks later were also very strong, and surpassed the previous record for the day.

The “massive disruption” to trading as a result of Covid-19 offered an opportunity to rethink promotional activity and the flow of inventory, which benefited gross margin, Duke said.

Full-year sales through the company’s online business jumped 80 per cent on the previous year, and represented just under 19 per cent of total sales, he said.

Briscoe expects to announce a final dividend when it reports its full-year result on March 16, said chairwoman Dame Rosanne Meo.

The company paid a special dividend of 6 cents a share, worth about $13m, in January, after it cancelled a $28m dividend last March due to uncertainty around the impact of Covid-19. It came under criticism for paying an interim dividend of $20.3m from its first-half profit after having taken $11.5m in wage subsidy payments, but later repaid the subsidy in full in October.

Meo noted the company had no permanent store closures during Covid-19 and made none of its workers redundant.

Briscoe shares rose 4.5 per cent to a record $5.85 in late morning trading on Tuesday.