SUPER RETAIL ZOOMS AHEAD
Written on the 21 August 2014
SUPER Retail Group (ASX: SUL) delivered mixed results across the year, although its auto retailing division was a consistent standout.
The owner of brands including Supercheap Auto, Rebel and Amart Sports continued delivering results in this division, sales growth underpinned by increased customers and transaction sizes, while its leisure and sports brands experienced a slowdown.
However, all divisions were up from a sales perspective – auto retailing sales increased 3.7 per cent, leisure retailing 5.7 per cent and sports retailing 4.3 per cent.
SUL CEO and managing director Peter Birtles (pictured) says the overall result of a 5.6 per cent increase in net profit after tax to $108.4 million was in line with the group’s last forecast to the market.
“The auto retailing division maintained its 10 year track record of delivering annual EBITDA growth of around 10 per cent, reflecting the successful transition of the division’s leadership from David Ajala to Chris Wilesmith,” says Birtles.
“David Ajala has now assumed the leadership of the leisure retailing division, [host of the BCF business], which was impacted by a slowdown in sales in stores that had previously benefited from investment in the mining industry, a higher level of sales cannibalisation from new stores and some internal execution issues.
“The sports retailing division had a solid start to the year but performance was impacted by inventory supply challenges resulting from the implementation of new merchandise and supply management systems in October and from a slowdown in customer demand following the federal budget and a warmer start to winter.”
Birtles says online channel growth outperformed physical store growth, indicating the need to improve both sales avenues and continue operating with a multi-channel view.
“Growth through our online channels significantly exceeded our physical store growth but we have work to do on improving our online fulfilment capabilities.
“We successfully tested store of the future concepts designed to create a more engaging customer experience in our Supercheap Auto and BCF businesses and plan to commence a rollout program in the coming year.”
Looking forward, Birtles says the company expects a reinstatement of momentum for its traditionally top performing BCF, Rebel and Amart Sports businesses following operational changes.
SUL grew its sports retailing float over the period to prepare for this, and will continue opening and refurbishing stores across the whole group.
“The new financial year started in line with our expectations. In the first six weeks, group like for like sales are just ahead of the prior year which is a strong improvement on the trend experienced over the last eight weeks of the prior year.
“We are planning to open between 20 and 30 new stores and expect to refurbish between 70 and 80 stores across the group.
“We will complete the development of our new logistics network, opening our new distribution centres at Brendale in Queensland and reconfiguring our facilities in Perth, Melbourne and New Zealand.”