Briscoe Group [ASX:BGP] Hits Record NPAT In FY23

New Zealand retail chain Briscoe Group [ASX:BGP], merchandiser of homewares and sporting goods, has posted its full year results to January 2023.

The home and equipment superstore tallied total sales had risen 5.56% at the same time in 2022, while the group hit a record net profit after tax (NPAT) of $88.4 million.

This result has led the group to promise a final dividend of 16 cents per share.

Shares were worth $4.30 each at time of writing, and the group has so far in 2023 fallen more than 15% in value.

Briscoe’s FY23 explained

In releasing its FY23 results to January 2023, the group reported record NPAT reaching $88.4 million, which was up on the $87.9 million reported a year earlier.

Gross profit had also bumped up 1.55 to $345.9 million, boosted by total sales of $785.9 million — an increase of 5.56%.

Board Chair Rosanne Meo said these results have encouraged the board to pay out a final dividend of 16 cents a share, which is to be fully imputed, and with an interim dividend of 12 cents a share, totals the full year’s dividends to 28 cents each — up 3.70% on the prior year.

The final dividend is to be paid at the end of the month and is in line with the company’s dividend policy to pay out at least 60% of NPAT on a full-year basis.

Dame Rosanne Meo stated:

‘We were delighted to be able to reward our shareholders by increasing our interim dividend earlier this year and also now with this final dividend announcement.

‘To produce results ahead of last year’s record benchmark is a significant achievement and reinforces the team’s ability to adapt quickly to an everchanging retail environment and to continue to differentiate Briscoe Group from other retailers.’

However, Group Managing Director Rod Duke flagged margin pressure caused by the economic downturn.

Many in the retail sector have been forced to squeeze margins to remain competitive.

Online revenue represented 18.97% of total group sales, which is below last year’s percentage due to more customers returning to stores post-store shutdowns.

Mr Duke commented:

‘We’re delighted to have produced a second half performance which has not only made up the narrow profit deficit from half year but also enabled us to post another full year record sales and profit performance. To achieve this considering the continued deterioration in economic factors impacting consumer confidence and subsequent retail spending, is an outstanding achievement.’

Biscoe braced for challenge

Mr Duke admitted that margin pressure is ongoing, and the company’s intent on protecting its margin gains that were significantly raised in 2020 and 2021.

He also said Biscoe is pouring energy into protecting the 633-basis point gained in the previous two years, with benefits from existing initiatives continuing to buffer the business in volatile times.

Rod Duke concluded:

‘We continue to focus on progressing our strategic initiatives, which we see as critical to protecting the foundation for growth moving forward.

‘We expect New Zealand retail in general to remain highly sensitive to ongoing uncertainty in relation to deteriorating economic conditions, customer sentiment, cost pressures, higher interest rates and political uncertainty given the upcoming general election. We do not underestimate just how challenging trading could be and currently expect it to be difficult for the Group to replicate this year’s record profit result.’

Regards,

Mahlia Stewart,

For Money Morning

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