Dick Smith revenue inches higher

For the 26 weeks ended 28 December 2014, Dick Smith posted a zero.8 per cent upward thrust in web revenue to $25.2 million, with gross sales up 8.9 per cent to $693.eight million. picture: Glenn Hunt

Dick Smith says Australian retail is beginning a sunny duration, as seven years of deflation in consumer electronics is replaced via price rises.

worth increases to replicate larger import prices will start to glide via now, mentioned Dick Smith managing director and chief government, Nick Abboud.

“instead of getting seven years of deflation in electronics, we’ll see a cycle of inflation, so that you can assist our category,” Mr Abboud said.

“If you wish to have my view on the place retail will go in the medium to long run, as rates of interest are sitting at this level [2.25 per cent], this is good for retail. gasoline costs at these form of levels [$1.17 a litre in Melbourne], which is superb for retail.

“And self belief round housing and the equity built up in housing additionally builds self assurance.”

Mr Abboud also stated the low Australian dollar can be more likely to pressure international visitors back to Australia, benefiting retailers in tourist towns and in world airports.

“i think there may be numerous indications which are extremely positive, and most likely the ultimate one, which i think is the important one, is we will start to see a slight inflation in pricing as the dollar obviously has dropped about 20 to 25 per cent from, say, six months ago.

“So very certain, I’ve acquired an extraordinarily sure read. i feel we’re at the start of this positive cycle in Australia.”

The feedback come after Dick Smith forecast a 10 per cent upward thrust in sales growth this 12 months, following a moderate rise in first-half profit in a outcome that was once dragged down via weakness in its New Zealand arm.

Shareholders were underwhelmed, sending Dick Smith shares down 6.67 per cent to close at $2.10 – below its 2013 record worth. Analysts had a consensus value goal of  $4.25 on Dick Smith ahead of Tuesday’s end result, and the company was once just lately on a Goldman Sachs record of companies that would see probably the most upside this reporting season.  

For the 26 weeks ended 28 December 2014, Dick Smith posted a 0.eight per cent rise in net revenue to $25.2 million. comparable-retailer sales have been up 2 per cent and general sales growth – driven by means of eleven retailer openings – grew eight.9 per cent to $693.8 million.

broker credit Suisse mentioned gross profit margins fell fifty one basis points to 24.7 per cent, fairly worse than anticipated. “We suspect Dick Smith has been discounting aggressively to power sales boom, however this is unsustainable in our view,” it mentioned. 

Dick Smith mentioned its full-yr forecast for three to 5 per cent profit boom was “cautious” given double-digit gross sales growth in January and February, the nine stores it’ll open, and the opportunity of an growth in New Zealand.

the corporate targets to have 400 shops open in Australia and New Zealand with the aid of the end of June, and 450 retailers through 2017. it’s also desirous about rising personal-label and on-line gross sales, and ramming dwelling that its costs are aggressive.

“The remaining two years has actually been that effort of that worth notion, and what we’re beginning to see is in Australia while it’s a good marketplace for retail at the moment, you do not get sixteen per cent EBITDA growth [in Australia] in six months except you are getting some of that perception right.”

the company has declared a 7¢ meantime dividend, fully franked.