Briscoe boosts profits ahead of expectations

Retailer Briscoe has delivered a strong half-year result, with boosted revenue, profits and profit margins, in part underpinned by a $1.34 million insurance payout.

Earnings to July were up 6.4% from $217.3 million a year ago to $231.4 million, earnings before interest and tax (ebit) rose 25.1% from $19.9 million to $24.9 million and after-tax profit was up 23.7%, from $14.9 million to $18.4 million.

While Briscoe's ebit and profit was boosted $1.34 million from a Christchurch-related business interruption insurance payout, without that claim ebit and profit were still up 18.42% and 17.26% respectively.

Group managing director Rod Duke said the gross profit margin percentage increased from 39.18% to 39.60%, reflecting the continued strength of the New Zealand dollar and ongoing improvements to the effectiveness of marketing strategies.

''These factors are more than offsetting the high levels of competitiveness across the retailing sectors in which the group operates,'' he said.

Briscoe shares were up 3.5% to a record $3 following the announcement, have gained more than 20% this year.

Forsyth Barr broker Haley Van Leeuwen said the result was ''marginally ahead'' of expectations.

Excluding the one-off insurance payout, profit was up more than 17%, ''driven by a solid performance in homeware and a very strong result at Rebel Sport.

''Rebel Sport had a strong margin lift, exceeding our forecast, and same-store sales growth of 9%,'' Ms Van Leeuwen said.

''We expect another strong result in full-year 2015, with growth driven by refurbishments and expansion of existing stores, footprint expansion and continued operational efficiencies across the group,'' she said.

Craigs Investment Partners broker Peter McIntyre said it was a ''strong result'', led by Rebel Sport; highlighting same store data was 6.28% growth.

Briscoe had been ''innovative and agile'', in closing the difference in price margin for the public between going online or visiting a store to make a purchase.

''They've come out with effective pricing, being innovative and agile in the very competitive retail space,'' Mr McIntyre said.

Store numbers were unchanged at 78, but a new Rebel Sport is to be opened in Wellington, with some shifts and refurbishments across other stores later this year.

Mr Duke said inventory levels were $4.08 million higher, at $73.24 million, than a year ago, but that was because of holding additional stock with one new store, ''significant increases'' in online sales and increased levels of directly imported stock.

simon.hartley@odt.co.nz

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