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Briscoe lifts first-half profit by 33%

NZ NewswireNZ Newswire 19/09/2016 Paul McBeth
Briscoes © Getty Briscoes

Briscoe Group, which operates stores selling household items and sporting goods, lifted first-half profit by 33 per cent and hiked its interim dividend after widening gross margins with more rigorous inventory management and boosting sales.

Net profit rose to $27.3 million, or 12.21 cents per share, in the 26 weeks ended July 31, from $20.5m, or 9.21 cents, a year earlier, the Auckland-based company said.

Sales gained 10 per cent to $268.4m, outpacing an 8.3 per cent lift in the cost of goods sold to $155.9m.

The result was in line with the retailer's August guidance for profit to rise by at least 32 per cent, when Briscoe said it was managing its inventory levels more closely and keeping a tighter rein on clearance and promotional sales.

The retailer declared an interim dividend of 7 cents per share, payable on Oct. 10 with an Oct. 3 record date, up from 6 cents a year earlier. The shares were unchanged at $3.83, having gained 33 per cent this year.

Managing director Rod Duke, who owns about 78 per cent of the company, said margins in the second half of the financial year will come under pressure as the New Zealand dollar depreciates, making imports more expensive, while the period is one week shorter than the second half of 2015.

"We are conscious that hedging of foreign exchange exposures taken across the last 12 months at less-favourable rates than those available currently, will continue to flow through to the cost of imported product," Duke said. "This will cause increased pressure on the gross profit margin per centage for the second half of this year."

Briscoe received a dividend of $1.2m from its 19.9 per cent stake in outdoor equipment chain Kathmandu Holdings, which reports its first-half earnings on Wednesday.

Briscoe has no bank debt, and had cash and equivalents of $13.9 million as at July 31, down from $16.7 million a year earlier.

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