Dick Smith shares are tanking after announcing a small profit rise

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Dick Smith has posted strong sales in the first half as the electronics retailer concentrates on growth.

Sales for the six months rose 8.9% to $694 million. However, net profit was up just 0.8% to $25.2 million.

CEO Nick Abboud says the sales growth came despite challenging market conditions.

“We expect further strong performance from our Growth Strategy and anticipate approximately 10% total sales growth in 2015,” he says.

Dick Smith has opened 65 new stores in 18 months.

Online sales increased to more than 7% of retail sales from 5% in 2014.

Dick Smith’s sales performance in the second half year to date has accelerated with January
sales up over 17% and February sales to date exhibiting double-digit growth.

Management expects the full financial year sales to increase by around 10%.
“Dick Smith is well placed to deliver further strong sales and profit growth over the next 18 months,” says Abboud.

Dick Smith plans to open nine new stores in the current half year.

Directors announced an interim dividend of 7 cents fully franked.

Dick Smith shares are trading almost 9% down to $2.05.

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