Super Retail Group keeps eye on the future with astute use of its 23% NPAT boost

SUPER Retail Group is keeping a firm hand on the future with the way it is utilising its 23 percent growth in net profit after tax (NPAT) for the 2012/13 financial year, which amounted to about $102.7 million.

Super Retail Group has managed a remarkable year, well served by its major brands Supercheap Auto (pictured), BCF, Rebel and Amart Sports.

While the big winners for the group were Supercheap Auto, BCF Boating Camping Fishing, Rebel and Amart Sports, as expected, the pleasing news for investors is the focus on developing the group's multi-channel retailing capabilities and restructuring under-performing business brands.

The current Super Retail Group policy of distributing 55-65 percent of underlying NPAT as dividends, according to a board statement, enables the group to balance investing in growth opportunities and building group capability, gradually paying down debt and increasing dividends to shareholders.

Super Retail Group managing director and chief executive officer, Peter Birtles, said it was pleasing the company had delivered strong sales and profit growth in all three of its divisions while also restructuring under-performing businesses and continuing to invest in developing group-wide multi-channel capabilities.

"We sustained strong like-for-like sales growth in each of our divisions despite the widely reported slowdown in wider retail spending," Mr Birtles said.

"Our focus on retailing products that our customers predominantly use as part of their leisure experiences has served us well. We believe our customers will continue to spend money on their passions even when they tighten their belt in other areas," he said.

"The key drivers of our performance continue to be merchandise renewal and presentation, private brand development, engaging marketing, sourcing and supply chain execution and the passion of our team members.

"We are particularly pleased that our larger businesses; Supercheap Auto, BCF Boating Camping Fishing, Rebel and Amart Sports, have all grown market share and operating margins.

"We completed a review of the Ray's Outdoors, FCO Fishing Camping Outdoors and Goldcross Cycles businesses and implemented a number of business improvement initiatives to deliver sales and profit growth, with encouraging early results. Associated non-recurring restructuring costs of $16.2 million were incurred.

"Last year, the group commenced a three year program of initiatives to develop the capabilities that our businesses will require to successfully operate as integrated multi-channel retailers. During the year, the group invested circa $53.9 million in capital expenditure and $4.1 million in operating expenses on these programs."

Mr Birtles said although retail conditions were forecast to remain patchy, the group expected to deliver solid like-for-like sales growth in each division and to maintain or grow operating margins while generating working capital improvements.

Peter Birtles

"The year ahead will be another year of growth and development as we maintain our focus on growing our existing businesses and building our multi-channel capabilities.

"We will be investing in opening new stores and refurbishing existing stores in all of our businesses with around 25 stores opening across the group," he said.

"We will complete the development of two new distribution centres at Brendale in Queensland and Erskine Park in New South Wales.

"We have made a strong start to the new financial year with like-for-like growth in group sales of circa 6 percent in the first seven weeks of the year.

"We will continue to develop our loyalty programs and increasingly use data analytics to develop relevant targeted marketing campaigns. We will also continue to develop our fledgling Auto Trade Direct and Super Retail Commercial businesses."

The Super Retail Group board declared a fully franked final dividend of 21 cents per share resulting in the fully franked dividends declared for the full year totalling 38 cents per share. This is an increase of 6 cents per share (18.8%) over the prior year.

The final dividend will be paid on October 2, with a record date of August 30.

The company will again provide shareholders with the opportunity to reinvest their dividends through its Dividend Reinvestment Plan. Dividends will be converted to shares at a nil discount to market value and the shares will be acquired on market to neutralise the effect of the Dividend Reinvestment Plan on all shareholders.

 Super Retail Group 2012/13 financial highlights:

• A 22 percent increase in group sales to $2.02 billion;
• A 22 percent increase in the group's EBIT to $172.3 million;
• A 13 percent increase in Earnings Per Share to 52.3 cents;
• Solid like-for-like sales growth achieved across all three of the group's divisions;
• Increased gross margins in the Auto and Leisure retailing divisions;
• Contribution from Rebel and Amart Sports businesses continues to exceed acquisition business case;
• Group's multi-channel development programs progressing in line with plan.

www.superretailgroup.com.au

ends