ninemsn
A higher final dividend is once again in store for JB Hi-Fi Ltd shareholders after the discount electronics retailer defied the economic downturn by announcing it will beat its full year profit guidance by $5 million.
Shares in JB Hi-Fi finished at a 17-month high, up 69 cents, or 5.12 per cent at $14.17 after the company said its after-tax profit would be around $92 million for the year to June 30.
The result would be up 41 per cent from $65.1 million booked in the previous financial year, which was a 61.1 per cent rise on the 2006/07 result.
Analysts' average estimates had put the JB Hi-Fi 2009 net profit at $87.1 million, which was revised upwards after a strong first half result.
Strong sales across most categories will lift total sales by 26 per cent to $2.3 billion, slightly below the previous guidance of $2.35 billion, chief executive Richard Uechtritz told AAP.
Mr Uechtritz said further cost cuts would enable gross margins to be held at around 22.2 per cent for 2008/09 and earnings before interest and tax margin were set to increase over the previous financial year.
Mr Uechtritz said shareholders were likely pocket a bigger dividend than in previous years as the company had a strong cash position and no acquisitions were on the horizon.
"Arguably, we're one of the lowest-geared retailers out there," he said.
"We don't have any acquisitions on the board ... so we're throwing off more cash, so the board would probably have to seriously look at returning some of that money to the shareholders."
Shareholders were rewarded in 2008 when the company boosted its final fully franked dividend by 167 per cent, or 10 cents, to 16 cents on higher sales and a continued store expansion.
In February JB Hi-Fi's board declared a 15 cent interim dividend, up 50 per cent on the previous corresponding half.
Mr Uechtritz said the boost from the government's second $42 billion stimulus package had failed to materialise for the share market's lowest-cost retailer.
"Our performance in the second half has been similar to our performance in the first half, so we didn't get as big a bump as we expected from the stimulus package."
He said JB Hi-Fi continued to grab market share from competitors despite "pretty hot" competition and aggressive discounting across the sector.
"Compared to a general softness in the more traditional categories of discretionary retail spending in the economy over the past year, our experience particularly in the field of home entertainment has been very positive, as reflected in the results," Mr Uechtritz said.
On Citigroup numbers, JB Hi-Fi is Australia's third largest consumer electronics company with an estimated market share of 11 per cent in 2007/08.
Mr Uechtritz said the store expansion rate of 15 per cent per year would continue, but declined to specify when the company would reach its target 160 company-branded stores.
It will also open another 50 stores in smaller mall and strip metropolitan shopping centres and country towns across Australian and New Zealand.
"We feel that the best return on investment is opening a new JB store," Mr Uechtritz said.
"There's no similar JBs out there. We don't have a competitor that is just focused on home entertainment."
JB Hi-Fi has 105 stores across Australia and New Zealand.
Shares in JB Hi-Fi finished at a 17-month high, up 69 cents, or 5.12 per cent at $14.17 after the company said its after-tax profit would be around $92 million for the year to June 30.
The result would be up 41 per cent from $65.1 million booked in the previous financial year, which was a 61.1 per cent rise on the 2006/07 result.
Analysts' average estimates had put the JB Hi-Fi 2009 net profit at $87.1 million, which was revised upwards after a strong first half result.
Strong sales across most categories will lift total sales by 26 per cent to $2.3 billion, slightly below the previous guidance of $2.35 billion, chief executive Richard Uechtritz told AAP.
Mr Uechtritz said further cost cuts would enable gross margins to be held at around 22.2 per cent for 2008/09 and earnings before interest and tax margin were set to increase over the previous financial year.
Mr Uechtritz said shareholders were likely pocket a bigger dividend than in previous years as the company had a strong cash position and no acquisitions were on the horizon.
"Arguably, we're one of the lowest-geared retailers out there," he said.
"We don't have any acquisitions on the board ... so we're throwing off more cash, so the board would probably have to seriously look at returning some of that money to the shareholders."
Shareholders were rewarded in 2008 when the company boosted its final fully franked dividend by 167 per cent, or 10 cents, to 16 cents on higher sales and a continued store expansion.
In February JB Hi-Fi's board declared a 15 cent interim dividend, up 50 per cent on the previous corresponding half.
Mr Uechtritz said the boost from the government's second $42 billion stimulus package had failed to materialise for the share market's lowest-cost retailer.
"Our performance in the second half has been similar to our performance in the first half, so we didn't get as big a bump as we expected from the stimulus package."
He said JB Hi-Fi continued to grab market share from competitors despite "pretty hot" competition and aggressive discounting across the sector.
"Compared to a general softness in the more traditional categories of discretionary retail spending in the economy over the past year, our experience particularly in the field of home entertainment has been very positive, as reflected in the results," Mr Uechtritz said.
On Citigroup numbers, JB Hi-Fi is Australia's third largest consumer electronics company with an estimated market share of 11 per cent in 2007/08.
Mr Uechtritz said the store expansion rate of 15 per cent per year would continue, but declined to specify when the company would reach its target 160 company-branded stores.
It will also open another 50 stores in smaller mall and strip metropolitan shopping centres and country towns across Australian and New Zealand.
"We feel that the best return on investment is opening a new JB store," Mr Uechtritz said.
"There's no similar JBs out there. We don't have a competitor that is just focused on home entertainment."
JB Hi-Fi has 105 stores across Australia and New Zealand.
