Premier was established as an investment company to maximise growth in capital returns to shareholders through the acquisition of controlling or strategic shareholdings in premier Australian companies with a particular concentration on the areas of retailing, importing and distributing. In August 2008 Premier was successful in obtaining control of the Just Group. Premier now owns the brands Just Jeans, Jay Jays, Portmans, Jacqui E, Peter Alexander, Dotti and Smiggle.
Premier Investments Limited ( Premier ) reports release of the financial results.
Group profit
Underlying profit before tax (before one off costs) of $73.3 million, in line with recent profit guidance
Underlying profit after tax of $51.5 million
Reported profit after tax of $40.5 million
Comparison between FY2011 and FY2010
FY2011 comprised 52 weeks; FY2010 comprised 53 weeks with the extra week contributing $2.3 million to the underlying profit before tax in FY2010
FY2010 reported profit after tax also included a $16.6 million one off tax benefit arising from the acquisition of The Just Group
FY2011 reported profit after tax includes the one off costs of $15.8 million ($11.0 million after tax) associated with Premier Retail (The Just Group) Strategic Review (as above)
Premier Retail (The Just Group) contribution to Premier performance:
Total sales for the year up 1.1% on a 52 week comparable basis
Underlying EBIT of $65.3 million, in line with recent guidance
Premier investment income up 29% pcp
Higher interest income on cash reserves
Strong dividend income from investment in Breville Group
Premier cash flows
Cash flows from operation of $71.0 million
Capex of $22.8 million
Final earn out payment for the acquisition of Smiggle of $18.4 million
Premier balance sheet remains strong with year end
Cash on hand of $308 million
Inventories clean and in a strong position
Investment in Breville worth approximately $105 million
Franking credit pool of $229 million
Just Group
- Total sales $866m (-0.5% on FY10; +1.1% on a comparable weeks basis)
- LFL sales down 2.8% (Aust -2.0%; NZ -4.2% in NZD)
- Gross margin increased by 53bps
- CODB up 280bps
- Strategic Review Announced July 2011
- FY11 EBIT of $65.3m before one-off costs, down 22.6% on LY (down 20.3% on comparable weeks basis to FY10)
- FY11 One off costs related to the strategic review $15.8m
- FY11 EBIT $49.5m
- FY11 PBT $39.8m
- All Strategic Review initiatives on track
Geographic summary
Australia
- Total sales up 1.7%
- LFL sales down 2.0%
- Consumer spending remains soft in discretionary categories such as clothing (ABS clothing sales down 0.8% for last 12 months)
- Sales driven by markdowns and promotions to attract
customers and maintain share
New Zealand
- Total sales up 0.5% (in NZD)
- LFL sales down 2.4% (in NZD)
- 9 stores closed since the February earthquake; 5 stores
permanently closed; 4 stores reopening in mid September
- Sales lost due to earthquake significant
- Insurance proceeds of NZ$1.5m recognised in FY11
P&L related to asset and profit losses
Stores
- Total sales down 1.2%
- Solid result in a tough market
- Brand is well positioned under focused leadership to perform well in a competitive market
- 251 stores at end of year
Jacqui E
- Total sales down 2.7%
- Challenging year with sales supported by promotions at the expense of margin
- 108 stores at end of year
Jay Jays
- Total sales down 8.5%
- New leadership team appointed and focused on brand turnaround
- 15 stores closed during the year
- 238 stores at end of year
Dotti
- Total sales up 5.2%
- LFL Sales Negative, 9 stores opened during the year, including 3 stores previously trading as Portmans and 1 previously trading as Peter Alexander
- 116 stores at end of year
Portmans
- Total sales up 3.6%
- Portmans to be profitable in FY12
- Portmans stores continued to outperform competitors and take
share in key locations despite the weak consumer environment
- 19 stores closed during the year
- 111 stores at end of year
Peter Alexander
- Total sales up 21.8%
- Excellent result in a weak discretionary market proves the strength of the brand and the importance of having the right offer
- 7 stores opened during the year
- 15-30 stores to open over the next 3 years
- 39 stores at end of year
Smiggle
- Aus/NZ total sales up 20.3%
- 13 stores opened during the year
- 100 stores at end of year in Australia & New Zealand
- Opportunity to open up to 50 more stores in Australia and New
Zealand over the next 3 years
- Very successful opening in Singapore, with 2 stores opened in FY11 and another store opened in September 2011
- Singapore is a very exciting growth opportunity
- Brand and operating model has translated well in the new market
- Singapore business already contributing to group profitability
Premier Retail (The Just Group) trading outlook
The Macro economic environment and consumer confidence has continued to deteriorate in August
Management is focussed on
- Reinvigoration of our products and brands
- Improving gross margin through better sourcing
- Accelerating the cost reduction program
- Inventory clean in all brands
- New Peter Alexander and Smiggle stores are on track to open pre Christmas
- Premier Retail fully hedged for FY12
- Based on the successful implementation of the strategic initiatives to date, and subject to the macro environment stabilising and Christmas trading, Premier reaffirms recent market guidance for FY12 Premier Retail EBIT to be in the range of $80 million $95 million
Dividends and capital managemen
The Premier Board has declared a final fully franked dividend of 18cps
Total full year fully franked dividend of 36cps
- This represents a payout above earnings
Premier Board made the dividend decision after reviewing
The underlying earnings of the group
Premier Retail (The Just Group) trading outlook
Future potential for The Just Group earnings as a result of the strategic review and enhanced management team
Maintaining cash reserves for future opportunities
The strength of the Premier balance sheet
