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JB Hi-Fi Lifts Profits by 7.5%

JB Hi-Fi Lifts Profits by 7.5%
Feb 08, 2016 By Simon Herrmann Tags: JBH

The technology retailer JB Hi-Fi Limited (ASX:JBH) announced a strong half year report and provided an outlook for FY16.

The retailer lifted Net Profit after Tax by 7.5%, on the backdrop of 7.7% increase in total sales, compared to the previous corresponding period (pcp). JB Hi-Fi however reported a slight decline in its EBIT margin at 6.5%, from 6.6% during the pcp.

The company has 194 stores in Australia and New Zealand, as at 31 December 2015. It has introduced 56 JB Hi-Fi Home stores, which provide household electronic appliances. JB Hi-Fi Chief Executive Officer, Richard Murray, commented on the new strategy: “Each new JB Hi-Fi Home store contributes to growing our customer awareness, market share and supplier support.” The company aims to open a total 75 stores in the Home format.

The retailer’s online sales grew by 28.9% in the 6 months ended December 2015, as it receives around 1.3 million unique visits per week.  JB Hi-Fi Solutions remains on track to achieve its long-term sales target of approximately $500 million per annum, through both organic and strategic acquisitions. Mr. Murray commented further on the performance: “JB Hi-Fi Solutions is a key driver of our future growth. We continue with our aggressive recruitment plan as we expand our product and service offer.”

JB Hi-Fi’s sales grew by 10.2% in January 2016 alone, with a consolidated comparable sales growth of 6.5%.  Mr. Murray stated that its ‘back to school’ technology purchases drove the sales higher.

The board declared an interim dividend of 63 cents per share (cps) fully franked, which is an increase of 4 cps on the prior year.

FY16 Guidance

While the company expects the market to remain competitive, it however continues to focus on delivering great value to its customers and expects NPAT to be in the range of $143 million to $147 million.

JB H-Fi's shares opened flat at $22.15 as at 10:15 AM (AEDT). JBH is up 24% for the year.

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Simon Herrmann Author: Simon Herrmann Feb 08, 2016

Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.

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