JB Hi-Fi Limited Reports FY24 Results and Strategic Acquisition
JBH (JBH) Share Update August 2024 Sunday 11th
JB Hi-Fi Limited Announces Strong FY24 Results and Strategic Acquisition
JB Hi-Fi Limited (ASX: JBH) has announced its full-year results for FY24, showcasing strong financial performance and strategic growth initiatives, including the acquisition of E. & S. Trading Co.
Instant Summary:
- Total sales of $9.59 billion.
- EBIT of $647.2 million.
- Net profit after tax (NPAT) of $438.8 million.
- Earnings per share (EPS) of 401.4 cps.
- Total ordinary dividend for FY24 of 261.0 cps.
- Acquisition of 75% of E. & S. Trading Co. for $47.8 million.
- Special dividend of 80 cps fully franked.
FY24 Financial Performance
JB Hi-Fi Limited reported total sales of $9.59 billion for FY24, reflecting a solid performance across its various brands. The company achieved earnings before interest and tax (EBIT) of $647.2 million and a net profit after tax (NPAT) of $438.8 million. Earnings per share (EPS) stood at 401.4 cents per share (cps).
The total ordinary dividend for FY24 was declared at 261.0 cps, demonstrating the company's commitment to returning value to shareholders. Additionally, JB Hi-Fi announced a special dividend of 80 cps fully franked, which, together with the final dividend, will distribute $200 million to shareholders.
Strategic Acquisition
In a significant move, JB Hi-Fi has entered into an agreement to acquire E. & S. Trading Co. (Discounts) Pty. Ltd. ('e&s'), initially acquiring 75% for a cash consideration of $47.8 million. This acquisition is expected to enhance JB Hi-Fi's product offerings and customer segments, particularly in the premium home appliance and bathroom categories.
The acquisition will be funded through existing cash reserves and is expected to be completed in September 2024, subject to customary completion conditions. Rob Sinclair will continue as Managing Director of e&s, ensuring continuity in leadership.
Trading Performance
JB Hi-Fi Australia reported total sales of $6.61 billion, a 1.0% increase from the previous year, driven by strong demand for technology and consumer electronics products. Online sales grew by 2.8% to $1.03 billion, accounting for 15.5% of total sales.
In New Zealand, JB Hi-Fi saw a 12.3% increase in total sales to NZD327.9 million, with online sales surging by 32.4% to NZD42.6 million. However, EBIT in New Zealand was negative at NZD2.3 million, reflecting ongoing investments in new stores and strategic initiatives.
The Good Guys, another brand under JB Hi-Fi, experienced a 4.8% decrease in total sales to $2.68 billion, with a corresponding decrease in comparable sales. Despite this, the brand's core home appliance categories remained resilient.
Sustainability Initiatives
JB Hi-Fi's FY24 Sustainability Report highlights the company's commitment to positive impacts on its people, communities, and the environment. Key achievements include improved gender diversity, leadership development programs, and significant investments in renewable energy and waste reduction initiatives.
The company installed solar power generation in seven stores, bringing the total to 30, and added 'Green Power' to its energy mix. JB Hi-Fi also implemented battery, mobile phone, and small e-waste recycling kiosks, collecting 16 tonnes of e-waste for recycling.
FY25 Outlook
Looking ahead, JB Hi-Fi remains optimistic about its growth prospects. The company reported strong sales momentum in July 2024, with total sales growth of 5.6% in Australia and 12.2% in New Zealand. The Good Guys also saw a 2.7% increase in total sales.
Group CEO Terry Smart attributed the positive results to the dedication of over 15,000 team members and the company's focus on offering the best value and exceptional customer service. JB Hi-Fi plans to continue innovating and adapting to meet customer needs in the coming year.
The strong financial performance and strategic acquisition are likely to positively impact JB Hi-Fi's stock price. The acquisition of e&s is expected to diversify the company's product offerings and customer base, potentially leading to increased revenue streams. The special dividend announcement also signals confidence in the company's financial health, which may further boost investor sentiment.
Investor Reaction:
Analysts are likely to view JB Hi-Fi's FY24 results and strategic acquisition favorably. The company's ability to maintain solid sales performance in a challenging retail environment, coupled with its focus on sustainability and growth initiatives, positions it well for future success. The special dividend announcement is expected to be well-received by shareholders, reflecting the company's strong cash flow and commitment to returning value to investors.
Conclusion:
JB Hi-Fi Limited's FY24 results and strategic acquisition highlight the company's resilience and growth potential. Investors should keep an eye on the completion of the e&s acquisition and monitor the company's ongoing initiatives to drive long-term value. With a strong financial foundation and a focus on innovation, JB Hi-Fi is well-positioned to navigate the challenges and opportunities ahead.