Smiggle drives Solomon Lew’s Premier Investments to a record profit

Photo: Smiggle/ Facebook.

Solomon Lew’s Premier Investments posted a 9.36% rise in net profit after tax to a record $78.6 million for the half year on the back of strong growth in children’s stationery chain Smiggles and pyjamas label Peter Alexander.

Lew says Premier Investments hit underlying first half EBIT (earnings before interest and tax) of $102.5 million, the first time the business has hit above $100 million for a half year. Only two-and-a-half years ago, full year earnings were $100 million.

“This outstanding achievement once again demonstrates the ability of Premier’s Board and executives to both set a strategy and rigorously implement that strategy to deliver superior returns to shareholders despite operating in a challenging market,” says Lew.

The company declared a fully franked dividend of 29 cents a share, up 11.5%.

Premier Investments, which also has Just Jeans, Portmans, Dotti, Jay Jays and Jacquie-E, is a standout among Australian retailers, growing sales where others struggle.

The company is also the largest single shareholder of department store chain Myer with a 10.8% stake. The company, dissatisfied with returns, is now directly canvassing shareholders to have the board of directors replaced.

Total sales for Premier Retail were up 7% to $630.1 million. Group like-for-like sales were up 2.4%.

Premier Retail CEO Mark McInnes say the company is relentlessly focused on implementing strategy.

“We identified in 2011 that Smiggle and Peter Alexander were unique brands with personalities driven by inhouse design, research and innovation,” he says.

The company has also been investing in online sales. Online sales for the half were up 71.2% and now represent 10.2% of sales. The online division expects to reach its original 2020 target of $100 million in annual online sales in the current calendar year.

Smiggle global sales, with 332 stores across Australia, New Zealand, Singapore, England, Scotland, Wales, Northern Ireland, Malaysia, Hong Kong and the Republic of Ireland, for the half were up 26.7% to $170.7 million.

Peter Alexander grew sales 15% to $114.4 million.

The results at a glance:

  • Record 1st Half sales of $630.1 million, up 7.0% on 1H17
  • Record 1st Half Underlying EBIT of $102.5 million, up 10.2% on 1H171
  • Record 1st Half Underlying EBIT % to Sales of 16.3%, up 47 bps on 1H171
  • Record Underlying Net profit before tax of $100.2 million, up 10.2% on 1H171
  • 1H18 LFL sales up 2.4% on 1H17 on a constant currency basis
  • Smiggle sales up 26.7% on a previous record 1H17 and up 60% over 2 years
  • Peter Alexander sales up 15.0% on a previous record 1H17
  • Online sales up 71.2% on 1H17, now exceeding 10% of the respective markets’ total sales
  • Original 2020 Online Sales target of $100 million expected to be achieved in calendar year 2018, two years
    ahead of original plan