Briscoe Group raised its interim dividend for an 11th straight year as the retailer remains confident it can keep boosting profit and shareholder returns, despite flagging consumer confidence.
The board declared an interim dividend of 8 cents per share to be paid on Oct. 11, up from 7.5 cents a year earlier. That amounts to $17.7 million of the company’s $29.3 million 2019 first-half net profit, which rose 2.7 percent from a year earlier.
Briscoe paid $40.7 million, or 19 cents per share, of dividends in the 2018 financial year compared to just $11.7 million, or 5.5 cents, in 2009. Over that same period, annual profit has climbed to $61.3 million from what was a trough of $11.6 million in the wake of the global financial crisis and the last domestic recession. The shares hit a low of 60 cents in March 2009, and were recently at $3.48, representing a dividend yield of 7.5 percent.
The retailer had already indicated profit would be up in the half on a 4.3 percent increase in sales to $292.2 million. Managing director Rod Duke, who owns more than three-quarters of the company, again noted the downturn in consumer activity.
“The economic outlook for the second half remains uncertain with flagging consumer confidence, increased industrial action, record-high fuel costs, increased wage pressures and a lower New Zealand dollar, all factors which will test retailers’ ability to maintain margins,” he said.
An economic survey yesterday showed consumer confidence at a six-year low, although official gross domestic product data released today showed household consumption grew 3.9 percent in the year to June 30.
“Despite these challenges we are confident that we have the right programmes in place to continue to maintain market share and to deliver the quality products, service and shopping experience to ensure improved bottom line profit and returns to shareholders,” Duke said.
Briscoe typically burns through cash in the first half, stocking up inventory for the end of year sales and paying a bigger final dividend. Operating cash inflow grew to $7.6 million, while capital investment more than doubled to $15.1 million. That partly reflected the company’s participation in Kathmandu Holdings’ recent equity raising. The retailer held cash and equivalents of $46.2. million at the balance date.