Super Retail's super profit

Net profit jumps 23% with all divisions humming along

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published August 21, 2013 11:36 am AEST

Super Retail Group (ASX:SUL), has today reported a 23% jump in net profit after tax for the 2013 financial year.

Net profit after tax came in at $102.7 million, on revenues of $2.0 billion, with the company reporting strong like-for like sales from all divisions. The Auto Retailing division, which includes Supercheap Auto stores, reported sales of $789 million, and like for like sales growth of 5%. It continues the brands strong run of growing same store sales since 2008.

The Leisure division, which contains brands Rays Outdoors, BCF Boating Camping Fishing and the FCO Fishing Camping Outdoors brand, saw sales of $522.5 million, and like for like growth of 3.1%. Sports Retailing, which includes Rebel and Amart Sports businesses saw $703.5 million in sales, 53% higher than the previous period. Like for like sales growth was strong at 8%.

But Super Retail is not sitting on its laurels. The company plans to spend around $110 million on capital expenditure in 2014 to support its further development and growth, as well as keeping competitors like Metcash's (ASX:MTS) Autobarn stores, as well as Woolworths' (ASX:WOW) Big W and Wesfarmers' (ASX:WES) Target and Kmart honest.

Super Retail plans to roll out new stores as well as refurbish existing stores, is developing customer loyalty programs, improving the group's supply chain, with new distribution centres, as well as increasing the efficiency and productivity of the group's operations.

Foolish takeaway

Currently trading on a trailing P/E ratio of 23 times, Super Retail doesn't appear a bargain. But if the company can continue to grow in the near future as it has over the past five years, today's share price might look super cheap!

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Motley Fool writer/analyst Mike King owns shares in Woolworths.

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