REPORTING SEASON: JB Hi-Fi Limited (JBH)

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Figure 1: JB Hi-Fi Limited 12 month chart

 

JB Hi-Fi Limited (JBH) improves earnings despite cautious consumers

– JB Hi-Fi (JBH) posted a slightly better than forecast $136.5m profit for the 12 months ended 30 June. The result was driven by strong sales at its 173 Australian stores over the second half and the rollout of new sites.

– Software sales (music, games & movies) fell 8.2% over FY15, while what it defines as hardware & services (i.e. everything else) rose strongly and accounted for 83.3% of revenue. Sales at its 14 New Zealand stores failed to contribute to the result, with revenue down 0.1%. JB Hi-Fi Home – its 2012 launched home and kitchen appliance unit continues to expand. A strong property market has prompted the opening of 4 new Home stores over the year to 43 stores.

– Online sales surged by 16.9%, although still only represent 2.4% of the retailer’s total sales. There were ~1.2m visitors to JBH’s website each week in FY15.

– JBH has announced an on-market buy-back program worth ~$16m, purchasing as many as 0.8 million shares from September to December 2015. This capital management is a little lighter than what the market had expected, although it highlights JBH’s strong cashflow and balance sheet.

– A final dividend of 31.0c/share fully-franked was declared, payable to eligible investors on 11 September 2015. The ex-dividend date is 26 August. JBH currently has a 4.5% yield. Looking ahead to FY16, JBH plans to open 6 new stores, to convert 16 existing stores to JB Hi-Fi Home and for ~$3.85bn in sales. Sales growth in July was 7.6% above revenue from a year earlier. JBH shares surged following the result and are up more than 30% since 1 Jan 15. JBH is ~10% below all-time record highs.

 

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Steven Daghlian, Market Analyst,