Strong sales of wireless headphones, portable speakers, drones and televisions has helped JB Hi-Fi deliver a 35 per cent jump in full-year net profit, despite stiff competition.
The Australian business performed strongly over the past year, chief executive Richard Murray said, although its 2016 acquisition, The Good Guys, faced a “challenging” second-half in the home appliances market.
Despite some signs of a slowing housing market in Sydney, the crowded home appliances sector has been “very competitive”, Mr Murray said during an analyst briefing on Monday.
“People are doing free deliveries and things like that – I just think the market’s being competitive,” he said.
“I don’t think it’s the housing market.”
He said the the company would need to focus on the replacement market for high-tech white goods.
“We’ve got to get them to upgrade before it breaks, and if we can get them excited about the product information that’s really powerful, and that’s a great opportunity if you can achieve that.”
Net profit for the 12 months to June 2018 lifted by a third to $233.2 million, while underlying profit after tax also rose 12.3 per cent.
Revenue jumped 21.8 per cent to $6.85 billion.
The latest results include a full 12-month contribution from The Good Guys, compared to only seven months in the previous financial year.
The company – with 208 JB Hi-Fi and 103 The Good Guys stores – has forecast a 3.6 per cent rise in total sales to around $7.1 billion for 2018/19, comprising $4.75 billion from JB Hi-Fi Australia and $2.15 billion from The Good Guys, with the New Zealand operations contributing the rest.
It plans to open five JB Hi-Fi stores and two The Good Guys stores in Australia, and close one JB Hi-Fi store in New Zealand this fiscal year.
It opened nine and closed one in 2017/18.
JB Hi-Fi has reported slowing sales growth in the first month of the new financial year.
JB Hi-Fi Australia sales rose 2.9 per cent for July, down from 9.3 per cent for the same month last year.
Comparable sales were up 0.3 per cent, versus a 6.5 per cent jump a year earlier.
Mr Murray called the July sales results “pleasing” given strong sales in the same month a year ago, and the impact of the FIFA World Cup bringing forward TV sales into June.
Sales growth for The Good Guys was up 2.7 per cent in July, from 6.8 per cent growth last July.
The Good Guys’ comparable sales growth also slowed to 1.4 per cent, from 5.7 per cent growth last July.
The company will pay a final dividend of 46 cents a share fully-franked, up nine cents from a year earlier.
JB Hi-Fi shares ended Monday down nine cents, or 0.4 per cent, at $23.38.
PROFIT JUMPS, NEW STORES FLAGGED
*Net profit up 35pct to $233.2 million
*Revenue up 21.8pct to $6.85 billion
*Final dividend 46 cents, fully-franked, unchanged