Business Description The Reject Shop (TRS) is a discount variety...

Business Description
The Reject Shop (TRS) is a discount variety retailer of general merchandise products. The group operates 103 stores in Vic, NSW, SA, ACT and Qld via two chains, the Reject Shop and Everything Here $2.

Company Strategy
TRS growth strategy is to grow sales from the existing stores through layout changes, promotions, store optimisation, and to open more stores. TRS has a total of 105 stores and plans to open 14 a year and believes it can sustain a portfolio of over 300 stores. TRS has delivered increases in comparable sales growth of 6.5% with high inventory turnover 5x. TRS is stocking what the customer wants and is selling high quantities. Discount Variety as a concept in Australia has been marred by the performance of Millers Retail and the Warehouse Group that failed to make viable returns. TRS has no net debt and so financial capacity to expand its businesses model from a small base. The Reject Shop reported NPAT up 20.4% from the pcp to $8.65m for the half year ended 25 December 2005. Revenues from ordinary activities were $127.7m, up 14.3% from the pcp. Diluted EPS was 33.4 cents, compared to 28.5 cents in the pcp. The net operating cash inflow was $18.43m, compared to an inflow of $15.378m in the pcp. The interim dividend declared was 13 cents.