Dick Smith shares have jumped higher on jobs losses and cost cutting

Getty/Dan Kitwood

Up to 80 staff will be shed by Dick Smith under a cost cutting program announced by the electronics retailer.

The company says the cuts will help the reduce cash costs of doing business to 17.5% to 18% of sales by the 2017 financial year.

The initiatives, which are expected to be implemented by June 2015, will have an anticipated one-time cost of $6.9-to-$7.9 million.

About 80 jobs will go in Dick Smith’s support office.

The shares lost about 10% when the company announced a first half profit rise of just 0.8% to $25.2 million on a 8.9% rise in sales to $694 million.

CEO Nick Abboud said he expected annual benefits from the cost cutting from July of $8-12 million

Dick Smith, which has 388 stores, expects full year sales growth of 10% and net profit growth of 3% to 5%.

“The growth profile for Dick Smith remains strong, with significant progress made to cement its position as Australasia’s leading consumer electronics retailer,” Abboud said.

The cost cutting sent Dick Smith shares 2.45% higher to $2.09.

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