Dick Smith profit rockets 525%

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Dick Smith profit rockets 525%
Nick Abboud

Dick Smith has announced a 525 percent rise in net profit after tax in its first yearly report as a publicly listed company.

In the year to 30 June 2014, Dick Smith reported $42.1 million of NPAT – a massive surge from $6.7 million one year previously, and more than 5 percent above the prospectus forecast.

It is a remarkable turnaround in fortunes since Woolworths sold the retailer off for just $20 million in November 2012. Pro forma sales reached $1.227 billion, just above the prospectus forecast of $1.226 billion.

Nick Abboud, managing director and CEO of Dick Smith Holdings, said: "What that did from a profit point of view – our EBIDTA result – is that we overachieved. We hit $74.4 million – 3.6 percent ahead of the prospectus."

Abboud said the results came despite challenging conditions, with store openings contributing positively.

"We're obviously a [high-volume, low-pricing] strategy business. We're in the market more often than we were 12 months ago and that ensures while retail was difficult in the second half, we were able to work our way through that."

"What we said from day one was that we want to grow our store network. We grew 54 stores in financial year 2014."

Dick Smith currently has 377 stores, but will embark on further expansion in the coming years.

"If you look at the vision I've got for the business, internally we'll see 450 stores [in three years time] across Australia and New Zealand. That's roughly 20 new stores a year," said Abboud. "We'll see 20 stores opening in financial year 2015."

The company has store openings planned for Queensland, Western Australia, NSW and Victoria over the next three months. The expansion includes the David Jones embedded presence and the fashion-orientated Move brand.

"We're in a fairly good position with a very strong balance sheet. We have no debt, and we've got a very strong position going forward," Abboud said.


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