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JB HI-FI has delivered record sales and earnings for the half year to 31 December, in what group CEO, Richard Murray (pictured), says has rounded out a strong 12 months for the company in Australia.
Total sales are up 23.6% on the prior corresponding period (pcp) to $2.6 billion, underlying EBIT is up 30.9% to $180.8 million, underlying NPAT is up 31.7% to $125.4 million, and statutory NPAT is up 15.99 per cent $110.4 million.
The ASX has responded positively to the announcement, and the company (ASX:JBH) is trading up 6.32 per cent at $30.27 per share at 11.41 AEDT.
JB Hi-Fi completed the $870 million acquisition of The Good Guys on 28 November 2016, but the integration of the businesses is in its early stages.
"As indicated at the time the acquisition was announced, given the proximity to the critical Christmas trading period for both JB HI-FI and The Good Guys, there would be limited integration undertaken in 2016," says Murray.
"As we move into 2017, we are taking a deliberate and considered approach to how we integrate and leverage the scale of the group.
"Our work to date has validated the rationale regarding the power of the combination and the strategic merits of the acquisition. We reconfirm our synergy assumptions of $15 to $20 million per year after a three-year integration period and remain highly confident in our ability to realise these benefits."
JB Hi-Fi's online business is growing steadily. Sales from the company's website grew 40.4 per cent to $84.8 million pcp and it has set an aspirational goal of $500 million in online sales.
The company has a total of 302 stores in Australia and New Zealand as at 31 December 2016. In Australia, four new JB Hi-Fi Home stores were opened and small appliances were introduced to a further 17 existing stores.
While in-store sales in Australia grew by 11.7 per cent to $2.2 billion, with comparable sales up 8.7 per cent, New Zealand did not fare so well.
Total New Zealand sales were down 1.7 per cent to NZ$125.1 million, and comparable sales down 11.2 per cent, due to the impact of demand for third party prepaid content cards. Excluding this impact, the company says total sales growth in the country would have been 5.2 per cent and comparable sales would have been down 4.9 per cent.
In FY17, the company expects total group sales to be circa $5.58 billion (JB $4.33bln and The Good Guys $1.25 billion). Group underlying NPAT to be in the range of $200 million to $206 million, an increase of 31.4 per cent to 35.4 per cent on pcp.
"We are pleased with the group's results for the half. Having successfully completed our acquisition of The Good Guys, the Group is well positioned to build on its solid momentum into the second half," says Murray.
Business News Australia
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