Briscoe Group says it is "thrilled" with a strong lift in full-year profit amid another challenging year of Covid-19 lockdowns, supply chain disruptions and economic volatility.
File image. Photo: RNZ
Managing director Rod Duke said the group was "thrilled to announce record sales and profit ... in a year which has, incredibly, proved just as tumultuous as the previous".
"Not only were our Auckland stores shut for a total of 84 days during this period (and all others for at least 21), but last year's second half also contained an additional week of trading as well as experiencing a resurgence in sales from the retail recovery post the first national lockdown."
Duke said the group had been able to improve its gross margin percentage to 45.76 percent, versus the year earlier's 43.76 percent.
The group's brands include Briscoes Homeware, Living & Giving and Rebel Sport.
Key numbers for the 12 months ended January, versus year earlier
- Net profit: $87.9m vs $73.2m up 20 percent
- Revenue: $744.5m vs $701.9m up 6 percent
- Dividend: 27 cents per share up 20 percent
"To improve again on last year's step-change in gross margin percentage is a massive highlight for us and a result of both external conditions and internal initiatives," Duke said.
This year's result includes an after tax dividend of $1.7m from its 6.8 percent stake in outdoor clothing and equipment retailer Kathmandu.
The group also held more inventory over the period to offset the effects of supply chain disruption, Duke said.
"Part of this year's success has been our focus on ensuring the business has had sufficient inventory to satisfy demand.
"This deliberate approach has resulted in a high level of inventory being carried during the year and we expect this to continue throughout 2022, but it has unquestionably delivered in terms of sales and profit."
Inventories totalled $119.5m at year-end, $28m more than the year earlier.
Online sales accounted for 26 percent of total group sales in the second half compared to 16 percent in the first half.
"While the full year mix was clearly influenced by store closures, we are confident that the "normalised" online portion of our business is continuing to increase," Duke said.
"With the Omicron variant of Covid-19 now widespread throughout New Zealand we have seen a recent decrease in footfall across our bricks and mortar network.
"However, from previous experiences, pandemic-related constraints on trading have invariably led to a strong recovery from pent-up consumer demand and we have no reason to believe that this won't be the case again as the Omicron variant subsides."
The year ahead was likely to be just as challenging as the past two, as the retail sector was sensitive to uncertainty and disruption, Duke said.