Super Retail, the auto accessory, sports and leisure retailer, has emerged from a restructuring reporting improved profits and a better payout for shareholders.
The owner of Super Cheap Auto, Rays, Rebel and BCF stores posted a 65.7% rise in net profit to $74.4 million for the half year to December.
In early trade, the Super Retail’s shares were up 7.5% to $10.46.
Sales for were up 6.6% to $1.3 billion. Normalised net profit after tax was $74.4 million, up 26.3%.
The company declared an interim dividend of 21.5 cents, an increase of 7.5%.
The results are a contrast to its full year profit. In August the company posted a 22.6% fall profit to $62.8 million, weighed down by the cost of restructuring.
Retailing has been under pressure from online trading and emerging competitors. Earlier this month Fashion labels Marcs and David Lawrence went in to voluntary administration, citing deteriorating sales, general market conditions and poor cash flow.
They were the latest in a string of failures in the retail sector including Payless Shoes, Pumkin Patch, Howards Storage World and Dick Smith stores, which closed last year.
But the turnaround at Super Retail, which has 800 stores, has been swift.
CEO Peter Birtles says all three divisions are delivering strong sales and profit growth.
“These results build on the momentum that we established in the second half of the 2016 financial year,”he says.
“The restructuring undertaken in the 2015 and 2016 financial years is delivering a positive outcome with a much improved performance from the Leisure Division and the elimination of loss making businesses within the Sports Division.”
In auto retailing, sales increased by 6.9% to $489.2 million with like-for-like sales growth of 3.7%.
In leisure, sales grew 2.9% to $311.0 million with like-for-like sales growth of 5.8%. BCF like-for-like sales growth was 3.6% post the closure of Ray’s Outdoors and strengthening as the half year progressed.
In sports retailing, sales grew 8.5% to $490.5 million while total divisional EBIT grew by 19.5% to $50.9 million. Like-for-like sales in the Rebel and Amart Sports businesses hit 6%.
Birtles plans to open around 12 new stores in the second half.
“We are confident that we will be able to deliver continued sales growth across all brands, with improvements in profitability driven by investment in new and refurbished stores, omni retail capabilities, and supply chain and operating model efficiencies,” he says.
The results by business division for the 26 weeks to December 26:
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