JBH Uplifted on ASX after Posting H1 FY19 Results

JBH

Australia’s leading home entertainment retailer, JB HI-FI Limited (ASX: JBH) has released its half-year results for FY 2019. For the half year, the company has reported a net profit after tax (NPAT) of $160.1 million and total sales of $3.8 billion of sales. The NPAT and total sales figures are 5.5% and 4.2% higher than the previous corresponding period (pcp), respectively. Following the release of the results, the share price of the company increased by 3.1% as on 11 February 2019 (AEST 1:01 PM).

The company further reported Earnings before interest and tax (EBIT) of $236.6 million which was $10.8 million or 4.8% higher than pcp. The board has declared an interim dividend of 91 cents per share, 100% franked. The interim dividend is representing 65% of NPAT, and it is 5.8% higher than pcp. 

In Australia, the total sales of the company increased by 4.7% to $2.59 billion. The growth was mainly witnessed in Communications, Games Hardware, Audio, Fitness and Connected Technology categories. In Australia, online sales increased by 21.0% to $144.4 Mn. Online sales represented 5.6% of total sales.

Further, in Australia, the gross profit of the company increased by 5.2% to $573.6 Mn which represents a gross margin of 22.1%. During the half year period, the business continued to focus on customer service, invest in strategic initiatives and manage increased volumes through the store network. Sales growth, gross margin expansion and lower depreciation, drove solid earnings growth which resulted in EBIT increasing by 4.5% on the pcp to $191.9 Mn with EBIT margin flat at 7.4%. During the half year period, the Cost of Doing Business (CODB) in Australia was 20 bps higher than the pcp. In January 2019, the total sales growth for JB HI-FI Australia was 3.0% with comparable sales growth of 1.5%.

In New Zealand, the company’s total sales increased by 5.8% to NZD131.8 million, with comparable sales up 12.6% as compared to pcp. The growth was mostly witnessed in Communications, Games Hardware, Fitness and Accessories categories. In New Zealand, online sales increased by 65.4% to NZD7.9 million. Online sales in New Zealand represented 6.0% of the total sales. The New Zealand division reported a Gross Margin of 17.5% which was flat as compared to pcp. During the half year period, the Cost of Doing Business (CODB) in New Zealand was 15.7%, down 65 bps on the pcp. In January 2019, the total sales growth for JB HI-FI New Zealand was -1.8% with comparable sales growth of 4.1%.

In FY 2019, the company is expecting to open five stores in Australia and two The Good Guys stores. Further, the company is also expecting to close two JB HI-FI Australia stores and one JB HI-FI New Zealand store. The company is expecting its total Group sales to be around $7.1 billion in FY 2019. Further, the company is expecting its FY 2019 NPAT to be in the range of $237 Mn to $245 Mn representing an increase of 1.6% to 5.1% on the pcp.

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JBH’s shares traded at $23.280 with a market capitalization of circa $2.59 billion as on 11 February 2019 (AEST 1:01 PM).


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