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We’re no Dick Smith: JB Hi-Fi




JB Hi-Fi halt net distinction adult 7.5 per cent

JB Hi-Fi has delivered a clever half-year result.

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JB Hi-Fi’s trainer says a fall of opposition electronic tradesman Dick Smith has reinforced his perspective that his association has a right strategy in carrying a different operation and not investing too heavily in private tag products.

Chief executive Richard Murray also pronounced JB Hi-Fi would make a many of any event to benefit market share if Dick Smith could not be sole and closed.

One analyst suggested that unfolding could net it as much as $106 million in additional sales a year.

Chief executive Richard Murray believes JB Hi-Fi's sales enlargement is a outcome of carrying a right product range.

Chief executive Richard Murray believes JB Hi-Fi’s sales enlargement is a outcome of carrying a right product range. Photo: Wayne Taylor

JB Hi-Fi upgraded a 2016 distinction foresee on Monday off a behind of clever sales enlargement in a second half of final year, generally in November and December, during a all-important Christmas and Boxing Day sales period.

Mr Murray pronounced it was misleading whether Dick Smith – now in a hands of receiver Ferrier Hodgson – would close a doors, though his association would take a event to boost sales enlargement if it did.  

“Our pursuit is to maximize a event . . . we wish to benefit marketplace share,” he said. 

Rival tradesman Dick Smith is in a hands of receiver Ferrier Hodgson.

Rival tradesman Dick Smith is in a hands of receiver Ferrier Hodgson.

Photo: Edwina Pickles

“We wish to do it sensibly, we wish to do it profitably. If there is an opportunity, we always demeanour to maximize that opportunity.”

Citigroup researcher Craig Woolford had predicted $106 million in additional sales and $19 million in distinction could upsurge to JB Hi-Fi if Dick Smith shut.

Strength in diversity 

Mr Murray said Dick Smith’s fall had reassured him that JB Hi-Fi had a right plan by carrying a different operation of renouned branded products and not following Dick Smith’s lead in investing heavily in private label products.  

“I do trust a farrago of a JB indication lowers a risk,” Mr Murray said. 

“Customers demeanour to JB to move them, within any difficulty – be it fitness, visible or computers – the ‘now’ product . . . but it’s also quality products.

“We’re not adhering a neck out on vast private tag plays.”

Mr Murray pronounced a liquidation sale or more heavy discounting during Dick Smith would have tiny outcome on JB Hi-Fi, given most of Dick Smith’s batch was out-of-date private label products. 

JB Hi-Fi bucked a damp mood in the discretionary retail zone by reporting 7.7 per cent sales enlargement and 5.2 per cent same-stores sales enlargement in a second half of final year, attack $1.97 billion opposite a 194 stores in Australia and New Zealand.  

Net distinction rose $95.2 million in that six-month period, adult 7.5 per cent on the same time final year. 

It revised a projected sales for a 2016 financial year adult by $50 million to $3.9 billion and expected profit to be between $143 million and $147 million. 

He pronounced Dick Smith stores, that were for sale, were too tiny for JB Hi-Fi and a opportunities for enlargement by appropriation the stores were “immaterial”.

JB Hi-Fi serve diversified a operation by introducing small appliances such as blenders, juicers and coffee machines to 22 stores in a second half of final year, and recorded “really pleasing” sales, Mr Murray said. 

JB Hi-Fi also converted 9 stores to a larger, appliance-focused HOME stores and non-stop another four, putting it on lane to accommodate a aim of 75 JB Hi-Fi Home stores by 2017. 

A trend towards shopping mobile phones outright rather than signing up to some-more essential telco contracts had reduced JB Hi-Fi margins, creation that one area of new weakness.  

Goldman Sachs researcher Adam Alexander pronounced JB Hi-Fi’s half-year news was “overall a good result, forward of a estimates”.

“The business appears to have negotiated a formidable iPhone product cycle and aspirant discounting well,” Mr Alexander wrote in a note to clients.  

Macquarie researcher Bryan Raymond said a formula met a firm’s expectations, while Jan – when sales grew 10.2 per cent – was an “outstanding result”.  

Mr Raymond said there was an upside risk to superintendence if JB Hi-Fi confirmed a movement by a final 5 months of FY16. 

JB Hi-Fi’s interim dividend will be 63c. It is payable on Mar 4.  

Article source: http://www.watoday.com.au/business/retail/were-no-dick-smith-jb-hifi-20160208-gmod05.html