What cost of living crisis? Briscoe Group posts yet another record full-year profit

Wednesday, 15 March 2023

Briscoe Group, the company behind retail chains Briscoes and Rebel Sport, seems to be immune to a weakening of consumer spending, making yet another record profit.

In the year to January 29, Briscoe Group grew its profit to $88.4 million, up from the $87.9m it made a year earlier.

Its total sales for the year increased by 5.5% to $785.9m and online sales represented almost 19% of total sales.

It will pay shareholders a final dividend of 16c per share following the strong financial result, taking the company’s full year dividend to 28c per share – a 3.7% on last year’s payout.

In a market update on Wednesday, Briscoe Group chair Dame Rosanne Meo said Briscoe’s financial performance was impressive given the significant pressures facing the retail industry.

“To produce results ahead of last year’s record benchmark is a significant achievement and reinforces the team’s ability to adapt quickly to an ever-changing retail environment and to continue to differentiate Briscoe Group from other retailers,” said Meo.

Briscoe’s largest shareholder and managing director Rod Duke said strong sales in the second half helped push the result to another record year of sales.

“We’re delighted to have produced a second-half performance which has not only made up the narrow profit deficit from half-year but also enabled us to post another full0year record sales and profit performance. To achieve this considering the continued deterioration in economic factors impacting consumer confidence and subsequent retail spending, is an outstanding achievement,” Duke said.

Duke said Briscoe continued to prove its resilience and was able to weather retail challenges faced in recent years.

The group did feel some impact of the cost of living crunch.

Its gross margin dropped from 45.76% to 44.02%. But in dollar terms, its gross margin increased by 1.5% or $5.3m.

“We are seeing margin pressure as the impacts of the economic downturn are felt and the tightening of the retail sector squeezes margins in order to be more competitive,” said Duke.

“Margin pressure is however ongoing, and we do not underestimate the challenge ahead in order to protect as much of the significant margin gains made during 2020 and 2021 as we can.”

Duke said the group had invested in its online business throughout there year, including by implementing the introduction of same-day click-and-collect.

Duke warned that Briscoe expected the retail industry to remain “highly sensitive to ongoing uncertainty in relation to deteriorating economic conditions, customer sentiment, cost pressures, higher interest rates and political uncertainty” in response to the upcoming general election.

“We do not underestimate just how challenging trading could be and currently expect it to be difficult for the group to replicate this year’s record profit result. However, what is certain is the talent and dedication across our entire team to offer New Zealanders the best shopping experience possible and to deliver continued strong performance.”