Dick Smith defies market slump to beat sales forecast
Dick Smith has beaten its sales forecast to record unaudited sales of AU$1.228 billion for the year ended 29 June 2014.
The figures put the electronics retailer slightly ahead of its forecast $1.226 billion – detailed in its November prospectus – but behind last year's $1.280 billion.
In a statement to the ASX, the company says it expects net profit after tax of $40 million. Earnings before interest tax depreciation and amortisation are expected to reach $71.8 million.
The company says a highlight of the sales performance was a strong improvement in Australian sales, with Q4 FY14 pro forma sales increasing more than 15% and like-for-like sales up 4%.
“This improvement reflects the growth in our store network and 'can do' trading mentality.
"This was achieved despite encountering challenging trading conditions, including further deterioration in Australian consumer sentiment, which has declined steadily since issuing the prospectus.”
No mention of the New Zealand operations is made in the ASX market announcement.
An accompanying presentation by Nick Abboud, Dick Smith managing director and CEO, shows the company's New Zealand store numbers are holding steady at 61 stores.
The company opened 57 stores and closed three in Australia since 29 June 2013, with Australian outlets now number 316, including four more 'fashtronics' stores and 29 Electronics Powered by DS stores.
In April, Abboud noted that New Zealand had seen 'strong underlying sale improvement' to -5.6% for Q3 of FY14, a 12.4 percentage point improvement on Q2 FY14, as the company benefited from a stronger Kiwi dollar.
He expected underlying sales growth would return to the New Zealand operations in FY15.
The company has integrated its New Zealand marketing and buying operations into Australia and ousourced its New Zealand warehouse management.
Private equity firm Anchorage Capital bought the electronics chain from Woolworths in September 2012 in a deal worth AU$94 million, before selling all bar 20% of its stake in an initial public offering last December.
The shares were offered at a price of $2.20 each, implying a market capitalisation of the company of $520 million.
