JB Hi-Fi posted an 11.48% rise in full year net profit to $152.18 million, helped by better computer sales following the closure of Dick Smith stores.
The profit beat the company’s own guidance of $143 million to $147 million and is above analyst forecasts of $146.6 million.
JB H-Fi’s shares were up 7% to $29.34 in early trade on the ASX.
Sales at the consumer electronics retailer were up 8.3% to $3.95 billion. Comparable sales rose 5.4%. The 2017 sales target is $4.25 billion, a rise of about 7.6%.
CEO Richard Murray says the closure of Dick Smith during the second half of the year contributed to an increase in sales of computers, visual, audio and accessories.
“We anticipate this will continue to drive sales growth in the first half of FY17,” he says. “However, the impact will moderate as we cycle through their decline and eventual market exit.”
Dick Smith went into administration in January and its last day of trading was May 3. All its store closed but the online name is now owned by Kogan.com.
JB Hi-Fi now has 194 stores in Australia and New Zealand after opening nine new stores and closing two in 2016. The company expects to open seven new stores this year.
This chart shows the growth in stores:
The company’s sales growth is coming from changing the mix of products in store and by opening new stores dedicated to home appliances, more along the lines of the market held by Harvey Norman.
The expansion of home electronics and appliances sales continues to be a priority.
The company is targeting a total of 75 JB HI-FI HOME stores across Australia and New Zealand, up from the current 59. It is also continuing to add small appliances to existing JB HI-FI stores.
Online sales continue to grow, up 35.8% in 2016, representing 3% of total sales.
JB Hi-Fi says it gets a 1.3 million visitors to its website each week.
“We continue to leverage the benefits of a strong online presence combined with our convenient store locations,” says Murray. “We are very focused on building a great customer experience online and are pleased with the progress made in FY16.”
JB Hi-Fi declared a fully franked final dividend of 37 cents a share, bringing the total dividend to 100 cents, up 10 cents on the prior year.
The company also decided on more share buybacks.
JB Hi-Fi completed an on-market buy-back of 0.7 million ordinary shares at a cost of $13.2 million during 2016.
Today the company announced an on-market buy-back of a maximum of 0.4 million ordinary shares for 2017. The buy-back is intended to offset the dilution impact of shares likely to be issued under share option plans and a deferred short-term incentive plan.
The full year results in detail: