JB Hi-Fi Post Strong Financial Results

Submitted by Share Trading on 11 February, 2009 - 15:07

JB Hi-Fi (JBH) records a 46.8% rise in sales in its New Zealand stores for the first half of the financial year. Revenue rose 28 percent to $1.26 billion for the half year, the company reported. Comparable store growth for the period was 11.1 per cent after currency adjustments with both Australia and New Zealand recording 11.3% growth.

JB Hi-Fi offers a mix of both entertainment software and hardware, along with computer, camera and telephony products. The company declines to provide a detailed breakdown of the performance of individual product ranges, but said most categories performed solidly. Net income rose 41 percent to $59 million ($39 million) in the six months ended Dec. 31, Melbourne-based JB Hi-Fi said today. Sales in Australia also rose by 27% over the same period as last year, an overall lift from $988.5 million to $1.26 billion. It is expecting sales to top $2.35 billion by the end of the financial year. Margins were down slightly at 21.4 per cent from 21.6 per cent in the half year ending 31 December 2007, despite what the retailer referred to as “competitor discounting and the strong performance of low margin categories”.

Reacting to the situation chief executive officer Richard Uechtritz said, “We continue to grow our market share as recently opened stores mature”. He said in a statement that, “JB has proven to be resilient during this tough period with home entertainment becoming more of a staple category”. Retail sales, seasonally adjusted, increased 3.8 percent in December from November, the Bureau of Statistics said in Sydney last week. Spending on household goods rose 9.9 percent in December, the report showed.

Two stores were opened in New Zealand at St Lukes and Wellington, with another nine opening their doors across the Tasman. The company is planning to open another seven stores across Australasia in the next six months. It is expecting games, computers/IT, DVD and telecommunications sales to drive comparable store sales for the next six months. The result saw JB Hi-Fi shares surge by 17% on the Australian stock exchange to $10.80, the company’s biggest gain since it listed in 2003.