By Sue Mitchell
JB Hi-Fi's net profit rose a better than expected 11.5 per cent to $152.2 million in 2016, underpinned by robust demand for consumer electronics and market share gains in the wake of the collapse of Dick Smith.
The net profit result beat consensus forecasts of about $146.6 million and exceeded JB Hi-Fi's $143 million to $147 million guidance, which was updated in May.
Sales rose 8.3 per cent to $3.95 billion, exceeding guidance of $3.9 billion, as new stores augmented like-for-like sales growth of 5.4 per cent and buoyant sales of audio visual equipment and mobile phones offset slowing demand for fitness products.
Strong promotions in May and June, including generous discounts on computers, helped JB Hi-Fi grow sales in the fourth quarter even though it was cycling 8 per cent like-for-like sales growth spurred by small business tax incentives in June 2015.
JB Hi-Fi shares have risen 40 per cent to a record $27.38 this year, fuelled by expectations it will acquire appliances chain The Good Guys.
Last week JB Hi-Fi gained clearance from the competition regulator to pursue a bid should The Good Guys' owners, the Muir family, not proceed with an initial public offering.
The Australian Competition and Consumer Commission concluded that JB Hi-Fi and The Good Guys focus on different product categories and customers, so an acquisition would not significantly reduce competition.
An acquisition of The Good Guys would boost JB Hi-Fi's sales from $3.9 billion to almost $6 billion, add $110 million to earnings before interest, tax, depreciation and amortisation - before synergies estimated to be worth as much as $40 million - and lift its total store footprint by 100 stores to 294.
JB Hi-Fi increased its final dividend by 6¢ to 37¢ a share, payable September 9, taking the full-year payout to $1.