Briscoe Group to pay back $11.5m wage subsidy

Briscoes in Dunedin. Photo: ODT
Briscoe Group received more than $11m in government wage subsidies. Photo: ODT
Briscoe Group will pay back the wage subsidy it received following the $27.9 million profit it turned in the first-half of its 2020 financial year.

The homeware and sporting goods company said it had made the decision after experiencing continued strong sales during the third quarter.

It received $11.5m in government wage subsidies across its businesses. This included $6,476,001.60 for 1073 staff in its Briscoes business and $866,011.20 for 124 head office staff.

Chair Dame Rosanne Meo said the group's continued sales momentum was credit to "the team led by Rod Duke".

Duke is the company's largest shareholder, holding a 78% stake, and received $15.6m of the $20.3m interim dividend the group paid out in its first-half of FY20.

"The energy and success of the team in continuing with new developments and initiatives during this extraordinary period has far exceeded the Board's expectations," Meo said in the NZX statement.

"The full extent of the lockdown was seen in our first quarter sales announced 1 May, which were down 35.6%. The rebound over the following three months, however, was equally as remarkable enabling Briscoe Group to report a half year result that was broadly in line with our previous year."

The group's net profit in the six months to July 26 was barely-dented by disruption caused by the Covid-19 pandemic, and it paid out a 9 cents per share dividend to shareholders - an increase on last year's 8.5c.

Its almost $28m profit was down a mere 1.3% on the same period a year earlier.

Meo said the board had taken a "considered approach" over the past seven months.

"While encouraged by the half year performance, the continued strong recovery through this third quarter and also the reduced likelihood of another Level 4 lockdown of all stores has now confirmed our confidence in reaching our decision to repay the wage subsidy."

In March, in light of the onset of the pandemic, the group cancelled its $28 million dividend. Meo said retaining these funds at the time had "contributed to our ability to support our employees".

She said the board was continuing to monitor the trading environment ahead, adding that the group was "certainly not out of the woods" but in good shape.

"Other companies have leveraged their balance sheets and, in some cases, have had to go to shareholders for more funds. We have not had to do this.

"Unlike other companies Briscoe Group has not made people redundant or closed stores. We pride ourselves with having a strong balance sheet so we can continue to expand our economic footprint with new store openings which will inevitably lead to the creation of jobs."






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