Full Year Results Announcement

BRISCOE GROUP LIMITED Results for announcement to the market Reporting Period: Full-Year 27 January 2020 to 31 January 2021 Previous Reporting Period: Full-Year 28 January 2019 to 26 January 2020 Currency: New Zealand Dollars Amount (000s); Percentage change Total revenue $701,797 +7.5% Net profit $73,199 +17.0% Final Dividend Amount per share: $0.13500000 Imputed amount per share: $0.05250000 Record date: 24 March 2021 Payment date: 31 March 2021 Net tangible assets per share Current period: $1.1482 Prior comparable period: $1.3892 Full Year Review Briscoe Group Posts Record Profit and Sales Briscoe Group Limited (NZX/ASX code: BGP) Highlights for the full year ended 31 January 2021: o Total sales $701.8 million, +7.47% o Gross profit $307.1 million, +19.27% o Gross profit margin 43.76% vs 39.43% last year o Online sales growth, +79.65% o Online sales as mix of total Group sales, 18.82% o Net profit after tax (NPAT) $73.2 million, +16.96% o Final Dividend 13.5 cps The directors of Briscoe Group Limited announce a record net profit after tax (NPAT) of $73.20 million for the year ending 31 January 2021, a 16.96% increase on the $62.58 million reported for the previous year. The result incorporates an additional week's trading in comparison to the 52-week period last year. The additional week is necessary because the Group operates on a weekly trading and reporting cycle of 52 weeks for most years with a 53-week year required once every five to six years to realign the financial and calendar year-ends. Board Chair, Dame Rosanne Meo announced that the directors have resolved to pay a final dividend of 13.5 cents per share (cps). The dividend is fully imputed and, when added to the interim dividend of 9.0cps and the special dividend paid in January of 6.0cps, brings the total dividend for the year to 28.5cps. The final dividend will be paid on 31 March 2021. The share register will close to determine entitlements to the dividend at 5pm on 24 March 2021. "We're delighted to be in a position to increase both the interim and final dividend payments, in addition to the recent special dividend paid to shareholders in January. "We're very proud of how our team has performed, the financial results produced and also of how the Company has endeavoured to balance the interests of stakeholder groups - team, customers, suppliers and shareholders alike." Rod Duke, Group Managing Director, said, "We are pleased to announce record sales and profit for Briscoe Group in a year truly like no other. Navigating the twists and turns encountered this year really has been like riding a retail roller-coaster. I'm immensely proud of the commitment and effort shown by the entire Briscoe Group team which has enabled us to remain focused on delivering our unique value proposition which clearly continues to resonate strongly with customers. It is a priority for the business that the momentum established this year continues as the basis for on-going growth and success." The earnings were generated on sales revenue of $701.8 million, an increase of 7.47% on the $653.0 million generated for the previous year. Gross Margin dollars increased 19.27% for the period with gross margin percentage increasing from 39.43% to 43.76%. Rod Duke said, "The massive disruption to trading from Covid-19 accelerated our strategic plans to optimise margin. Our program of work focuses on all stages of the product life cycle including; o optimising our pre-season planning and buying processes, o use of enhanced data analytics to maximise our seasonal trading events, o improving inventory flow to shelf for new and replenishment product, and o reducing our level of clearance product." Included in the result is a credit adjustment to tax expense totaling $0.68 million. This has arisen from two reversals of deferred tax liability arising from; the sale of the Group's Nelson property and the reintroduction of tax depreciation on commercial and industrial buildings as part of the Covid-19 Response (Taxation and Social Assistance Urgent Measures) Act. The Group did not receive a dividend during the year from its investment in Kathmandu Holdings Limited (KMD) as a result of their response to the Covid-19 situation. Last year the Group received $9.5 million of rights entitlements benefits and dividends, in relation to the KMD investment. During the year $27.43 million of capital investment was made by the Group of which $18.30 million represents development of property owned by the Group in Auckland, Silverdale and Invercargill. The balance of the capital investment was for the fit-out of relocated stores, online platform improvements, security system upgrades and enhancements to system software and hardware. Inventories totaled $91.47 million at year-end, $4.06 million higher than the $87.41 million reported for last year, predominantly reflecting imported homeware product, landed and receipted earlier than usual as a contingency against possible supply disruption. Rod Duke said, "Notwithstanding the widely reported 'pandemic-inflicted' pressures on product sourcing and supply, the strength of our supplier relationships has been incredibly valuable for us in securing consistency of supply. We are very grateful to our supply partners for the collaboration and co-operation shown through this extraordinary year." Despite the major distraction across the entire business due to Covid-19, the Group progressed a number of store development projects during the year. In May both the Briscoes Homeware and Rebel Sport Nelson stores were relocated to a new dual site with more carparking and better access for customers. The new stores are bigger and brighter with the Rebel Sport store featuring the new generation fit-out. The former Rebel Sport premises which was owned by the Group was sold. In July the refurbishment of the Tauranga Briscoes Homeware and Rebel Sport stores was completed. The new configuration has resulted in a bigger Briscoes Homeware store, new back-of-house and common team facilities. Work also continued on a number of projects in relation to Group owned properties. The re-roofing of Briscoes Invercargill was completed in October 2020 and the construction of a new Briscoes Homeware store at 36 Taylors Road, Auckland is now nearing completion and on target for opening in early April 2021. Rod Duke said, "We're excited about the potential of this new store, which will be bigger, brighter and feature a new contemporary fit-out. The opening of this store will then allow us to introduce a new Rebel Sport store in the retail space on the ground floor of the Support Office building at 1 Taylors Road." The development at Silverdale is continuing well with the building construction now well over half completed. The opening of these new generation Briscoes Homeware and Rebel Sport stores in October 2021 will make it easier for our customers in Silverdale, Orewa, on the Hibiscus Coast and surrounding areas to shop with us. The Group's online business experienced extraordinary growth with the move to the national lockdown in March and continued to produce strong growth throughout the remainder of the year finishing with growth of 79.65% above online sales for the 2019/20 year. Rod Duke said, "This represents 18.8% of total Group sales and whilst this mix was clearly assisted by the closure of bricks and mortar stores during the two lockdown periods, we are confident that the online mix of sales moving forward will have experienced a significant step-change from the 11.3% recorded for the previous year. The accelerated roll-out of Click and Collect across the entire network proved invaluable during the lockdown periods and is a great example of how quickly the team can respond and accelerate plans when required. The service is proving extremely popular accounting for 30% of all online sales processed during the second half of the financial year. Rod Duke said "While the recovery across most of New Zealand retailing since the end of lockdown has been significant, the agility shown by the Briscoe Group team to adapt to and leverage the new trading conditions has also been nothing short of incredible. "In addition, the strategic initiatives established at the start of 2020 have laid the foundations for a range of plans to sustain and build the business across the next 3-5 years. These plans revolve around three key areas: o Significantly enhancing the shopping experience our customers enjoy with us, o An end to end review and redesign of our supply chain, from source to customer, and o Developing new streams of revenue. "We have partnered with KPMG in relation to identifying and implementing supply chain improvements. Their experience from working with a number of other retailers will be invaluable and benefits have already started to be realised." Group Chair Dame Rosanne Meo said, "This year's results highlight the Group's ability to perform, adapt and deliver improved performance under the most extraordinary trading conditions. The quality of the leadership shown by the senior executive team has been impressive and on behalf of the Board I would like to acknowledge the great work done by the entire Briscoe Group team. The outlook is certainly complex and uncertain but we are confident that the business is well placed in relation to both team and strategy to deliver improved profit and returns to shareholders." Tuesday 16 March 2021 Contact for enquiries: Rod Duke Group Managing Director Tel: + 64 9 815 3737 End CA:00369213 For:BGP Type:FLLYR Time:2021-03-16 12:20:36