JB does it again with better than expected result and strong guidance
Electronics, home entertainment and white goods retailer, JB Hi-Fi (ASX: JBH) has delivered an impressive result for the six months to December 31, 2016 exceeding the expectations of most analysts with an underlying net profit of $125.4 million from sales of $2.6 billion.
Management declared an interim dividend of 72 cents per share (up 14.3% on the previous corresponding period), also ahead of analyst’s expectations, and suggesting Bell Potter’s full-year dividend estimate of $1.17 may be conservative.
The strong performance was driven by robust sales growth of 23.6%. Importantly, like-for-like sales growth in Australia was a strong 8.7%.
Management cited key growth categories as being communications, audio, cameras, computers and home appliances.
JBH remains a store expansion and transition strategy. The company had a total of 302 stores in Australia and New Zealand as at December 31, 2016. In Australia, four new JB Hi-Fi HOME and small appliances were introduced to a further 17 existing JBH stores in the first half.
The group’s entry into the white goods sector has been well managed and will continue to be a growth driver as further stores are converted to HOME stores.
In the second half of fiscal 2017 JBH will benefit from a full six month contribution from The Good Guys acquisition which was completed on November 28, 2016.
JBH chief executive, Richard Murray said, “We a pleased with the group’s results for the half, having successfully completed our acquisition of The Good Guys, and the group is well positioned to build on its solid momentum into the second half”.
This positive sentiment is reflected in the group’s outlook statement which points to an underlying net profit of between $200 million and $206 million (up circa 35% on the previous corresponding period) from sales of nearly $5.6 billion.
This compares with Bell Potter’s pre-result full-year underlying net profit and sales estimates of $194.5 million and $5.5 billion respectively.
It should be noted that broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.