JB Hi-Fi bumper profit
A bumper profit announcement by electronics retailer JB Hi-Fi has not saved the company’s share price this morning from investors’ concerns about consumer spending.
JB Hi-Fi Ltd posted a 60% increase in profit in the six months to 31 December 2007 to reach $41.94 million, thanks to insatiable demand for flat-panel TVs, and upgraded its outlook. Same store sales were up 18.8%.
The retailer reported that sales so far in January and February have continued the strong momentum of the first half, and profit for the full-year would rise as much as 49%.
But consumer spending concerns saw the share price fall 9% to $11.45 this morning. Retailer David Jones got a similar response on Monday when it announced a profit upgrade, closing down 4%.
JB Hi-Fi raised its full-year sales forecast to $1.8 billion from a previous forecast of $1.7 billion, or a 40% increase. The company is in an aggressive expansion phase, opening 15 new stores in the first half to bring the total to 104.
Accounting software company MYOB announced revenue up 13% to $205.6 million for the full year ending 31 December. Net profit after tax increased from $17.3 million to $18.8 million.
Chief executive Craig Winkler says new product releases and better marketing in new regions propelled the growth. Australia was the company’s best performing market. He says the growth is sustainable in 2007-08, despite a slowing global economy. Winkler is predicting “double digit growth revenue growth, margin expansion in the underlying business and carefully targeted development spend”.
The company, which rejected a private equity offer to buy the company at $1.90 a share last week, is planning to grow through more acquisitions.
Shares were trading at $1.67 this morning.
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