The Super Retail Group Ltd (ASX: SUL) share price jumped 8% to $8.50 after the company released its annual results to the market this morning. Here's what you need to know
- Revenue rose 2% to $2,466 million
- Net profit after tax (NPAT) rose 62% to $102 million
- Normalised NPAT rose 25% to $138 million
- Earnings per share of 51.6 cents
- Dividends of 46.5 cents
- Net debt of $381 million
- Like-for-like sales growth of approx. 4% across the portfolio
- Outlook for continued transformation of the business
- Cost savings to be invested in lower prices
- Capital management expected to result in cash flow coming in ahead of profit over next few years
So what?
A strong result for Super Retail Group, especially given the headwinds facing some other retail businesses like department stores as we saw here. Super Retail managed to generate like-for-like sales growth of around 4% across the portfolio, especially given the ongoing changes to the business.
As we wrote earlier in the year, Super Retail has announced that it plans to retire its legacy Amart brand, and consolidate all Amart and Rebel Sports stores under the Rebel Sports brand. This is expected to put the business on a stronger footing given the influx of competition into Australia. The transition is expected to be complete by June 2018.
Now what?
Due to the transition, there'll be no new sports stores opened during the year. Leisure and Automotive Retail however are moving ahead with expansion plans; Leisure is opening 3 new stores, and Automotive has a total of 9 new stores plus 46 relocations and refurbishments planned. Like-for-like sales has been strong at all 3 businesses since the start of the 2018 financial year.
Management continues to invest in lower prices and better service (e.g. via click and collect) at all its brands, and the results are showing in the company's growth, which is well ahead of the wider market. Super Retail is a solid business with a great track record of performance, and I'd consider buying shares today.
