HY to 30/07/2017 $28.58M ($27.26M) +4.8% Int Div 7.50cps

BRISCOE GROUP LIMITED Results for announcement to the market Reporting Period; Half-Year 30 January 2017 to 30 July 2017 Previous reporting period; Half-Year 1 February 2016 to 31 July 2016 Amount (000s); Percentage change Sales revenue from ordinary activities $280,257 +4.4% Profit from ordinary activities after tax attributable to shareholders $28,576 +4.8% Net profit attributable to shareholders. $28,576 +4.8% EPS: 13.0cps 12.5cps Interim Dividend Gross amount per share 7.50 cents Imputed amount per share 7.50 cents Record Date: 22/09/17 Payment Date: 02/10/17 Imputation tax credit: $0.029167 Half Year Review Highlights for the 26 week period ended 30 July 2017: o Total sales $280.26 million, +4.44% o Same store sales growth, +4.43% o Gross profit $114.99 million, +2.30% o Gross profit margin 41.03% vs 41.89% last year o EBIT $39.13 million, +3.26% o NPAT $28.58 million, +4.84% o Interim Dividend 7.50 cps increase from 7.00 cps last year, +7.14% The directors of Briscoe Group Limited (NZX/ASX code: BGP) announce a net profit after tax (NPAT) of $28.58 million for the half-year ended 30 July 2017. This compares to last year's $27.26 million half year result. The half-year results are unaudited. The directors have resolved to pay an interim dividend of 7.50 cents per share (cps). This compares to last year's interim dividend of 7.00 cps. Books will close to determine entitlements at 5pm on 22 September 2017 and payment will be made on 2 October 2017. The earnings were generated on sales of $280.26 million compared to the $268.36 million generated for the same period last year. On a same store basis the Group's sales for the half year ended 30 July 2017 were 4.43% ahead of the same period last year. Earnings before interest and tax (EBIT) of $39.13 million were generated for the six months to 30 July 2017. This compares to $37.89 million for the same period last year and represents an increase of 3.26%. Gross margin dollars has increased 2.30% for the period with gross margin percentage decreasing from 41.89% to 41.03%. The decrease in gross margin percentage reflects the continued intensity of competition across the retailing environment. In addition, the first half presented a number of challenges for the business. Fires in Christchurch in February, a major flood in Edgecumbe in April, a relatively late start to winter across the country, warmer than average temperatures in Auckland and the central North Island, over key promotional campaigns in June followed by intense cold, snow and heavy rain affecting many parts of the country during July. In the period under review, homeware sales increased 4.56% from $170.21 million to $177.96 million and sporting goods sales increased 4.23% from $98.15 million to $102.29 million. On a same store basis, homeware sales increased by 5.01%, while sporting goods sales increased by 3.43%. Inventory levels as at 30 July 2017 were $84.95 million, up from $78.43 million at the same time last year, reflecting increased stock holdings to satisfy the increases experienced in online sales, the new Briscoes Homeware and Rebel Sport stores now operating at Petone in Wellington, as well as higher than anticipated closing stocks for categories carrying seasonal product impacted by the unusual weather conditions experienced during the first half. Rod Duke, Group Managing Director, said: "Despite the ongoing competitiveness of the retail environment and the impact on winter-dependent categories with the late start to the colder months, overall we are satisfied with the positive sales and profit growth achieved for this first six months. "We have progressed and completed a number of store projects during this first half. February saw the completion of a full refurbishment of our largest Briscoes Homeware store at Panmure in Auckland. During March we added an online fulfilment facility to our Briscoes Homeware store in Hamilton, extended and refurbished the Rebel Sport store at Lyall Bay in Wellington and relaunched the completely renovated Briscoes Homeware store at Taranaki Street in central Wellington. "In April, we opened our new Rebel Sport and Briscoes Homeware stores in Petone, Wellington. These two stores replaced our existing two Briscoes Homeware stores at Petone and Lower Hutt which were closed along with the Rebel Sport Lower Hutt store. This project was a major investment in the region and we are proud of the offer now available for our customers. "In May we completed the extension and refurbishment of the Briscoes Homeware store at Takanini allowing a larger and much improved offer in this area of high population growth. The Briscoes Homeware stores at Henderson and Pukekohe were both refurbished during June. We are extremely pleased with all the projects completed during this first half. "During the second half of the year the Rebel Sport store at Albany in Auckland and the Briscoes Homeware store at Rotorua will be refurbished. Our Rebel Sport store at Riccarton in Christchurch will be relocated to a different location within the Riccarton Shopping Mall. "A new Briscoes Homeware store will open next week at Rangiora in Canterbury and we also expect to open a new Briscoes Homeware store at Glenfield Mall in Auckland before Christmas. A new Rebel Sport store in Kerikeri is planned to commence trading early next year. "During the six months we received a dividend of $1.60 million from our 19.8% investment in Kathmandu Holdings Limited. As the largest single shareholder we continue to watch their performance closely and note the progress management is making as they seek to restore historical levels of profitability. We were pleased to be able to amicably settle the dispute between the two companies relating to the reimbursement of expenses associated with the takeover activity during 2015. There was no material impact on the financial statements as a result of the settlement. "We continue to experience excellent growth through our online channels which now represent more than 7% of the total Group sales. The number of fulfilment stores has helped to improve online capacity with further additions planned for later in the year. Continuous improvement is our key goal across all parts of our online business. "The economic outlook for the second half remains uncertain. With the New Zealand general election imminent and house prices appearing to have stagnated, we believe that consumers will be as controlled and discerning as ever in relation to discretionary spending. However, we are optimistic that we will continue to be the first choice for homeware and sporting goods in New Zealand and are confident that we have the right programmes in place to deliver improvements in the ranges and quality of brands we offer, the levels and quality of service we provide and the experience available in our stores and online." Friday 8 September 2017 Contact for enquiries: Rod Duke Group Managing Director Tel: + 64 9 815 3737 End CA:00306929 For:BGP Type:HALFYR Time:2017-09-08 11:21:42