And still in the consumer space and the consumer electronics retailer Dick Smith (DSH) is confident of meeting full targets for a 10% rise in sales, despite a moderate performance in the six months to December.
CEO, Nick Abboud, said in yesterday’s profit announcement the half-year result “reaffirms that our growth strategy is performing strongly. We delivered profitable comparable and total sales growth, despite challenging market conditions."
For the 26 weeks ended 28 December 2014, Dick Smith lifted net profit to $25.2 million, a rise of just 0.8%.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) totalled $44.7 million, up 7.1% on the prior period’s $41.7 million. But the result underwhelmed a fickle market and the shares fell 6.6% to $2.10.
DSH 1Y – Dick Smith shares still underwater after listing at $2.20
Group same-store sales grew by 2%, (but double that in Australia, which was a solid performance) while topline sales – driven by new store openings – grew 8.9% to $693.8 million.
The result was hurt by a poor performance from its New Zealand arm, where sales growth was hit by “aggressive competitive pricing and a deterioration in consumer sentiment, particularly in the second quarter”.
The company expects this weakness is expected to continue in the second half, with the company now describing NZ was “likely to be a medium to longer-term turnaround.” In other words, Dick Smith will now be looking for much of its sales growth from the Australian consumer market.
But online sales are helping, accounting for 7% of sales in the half (more than $40 million), up from 5% in the second half in 2013-14. The company says it will hit its 10% target for online sales ahead of the 2017 target.
The company has declared a 7 cent interim dividend, fully franked, to be paid on 30 April. No interim dividend was paid a year ago because the company had only listed in December 2013.
