Super Retail warns wheels falling off as interest rates bite
Super Retail Group has reported a 19.9 per cent fall in net profit as supply chain costs and pandemic restrictions ate into its earnings.
Super Retail sales continue to rise (file photo)
The company, which owns the BCF, Macpac, Rebel and SuperCheap Auto brands, has also warned that conditions were likely to worsen as interest rates rise and the pent-up demand from consumers during the pandemic subsided.
It said sales for the year were up by 2.8 per cent to $3.5 billion with digital sales now accounting for $600 million, an increase of 44 per cent.
The bottom-line profit was $241 million.
A fully franked dividend of 43 cents a share was declared for the second half bringing the full-year payout to 70 cents.
Among its brands, profit before tax fell significantly at its BCF division. It was down from $96 million in 2021 to $59 million. SuperCheap Auto fell from $192 million in 2021 to $176 million. Rebel also fell from $166 million to $141 million.
Macpac increased profit slightly.
Managing director Anthony Heraghty said record online sales and the decision to invest in inventory underpinned the first half.
“Our solid inventory levels allowed us to capture consumer demand when retail spending rebounded in the second quarter following the end of the Covid-19 lockdowns,” he said.
“The group delivered a strong second half result with like for like sales increasing by 5 per cent.”
The company said its start to the current financial year had been strong. Like-for-like sales growth against the pre-pandemic 2019 was up 29 per cent.
“Low unemployment and high levels of household savings are currently supporting strong consumer demand and foot traffic in shopping centres continues to build,” it said.
“While current trading levels are strong, the group expects rising interest rates and higher cost of living will start to impact consumer spending in the second half and that elevated levels of demand that arose during the pandemic will begin to subside.
“To prepare for more challenging macro-economic conditions the group is taking cost control actions focused on supply chain normalisation, store cost normalisation, maximising COGS efficiency and implementing a variable cost plan to align costs with revenue.”
Heraghty said the company would make a significant investment to take advantage of the data it had on its customers by launching new loyalty programs, developing a customer data platform and building customer analytics.
He said the company now had 9 million club members and this represented a significant opportunity.
