COVID-19 fires up Super Retail sales, but annual profit falls

One-off costs dented Super Retail’s profit, but a surge in sales momentum has accelerated into the new financial year.

At Rebel Sport sales increased by 3.3 per cent to $1.038bn.

Super Retail Group chief executive Anthony Hegarty, whose sprawling retail empire of almost 700 stores takes in Rebel, Supercheap Auto, BCF and Macpac, believes the sun has set on aggressive store roll out plans as consumers increasingly shift to shopping online.

“I can’t see a day where we will be opening stores to the degree we did historically, think those days have sunsetted, we would see our ongoing growth coming from online and also coming from our club members of which we now have 6.6 million,’’ Mr Hegarty told The Australian.

And Super Retail will be backing up that with investment in its digital platforms to ensure it meets high expectations of its customers.

“We plan to invest around $90m of capital in the business this financial year, and near enough to half will go into digital capability or the like.

“We have pushed hard at this for a couple of years and we are starting to see some good benefit.’’

The COVID-19 pandemic has certainly helped put a rocket under online sales with its digital platform generating a near 50 per cent sales boost in fiscal 2020.

However, more that $50m in one-off costs and the impact of the bush fires and the pandemic — which curtailed outdoor and leisure activities — cut its fiscal 2020 profit and saw the retailer slash its final dividend by around a third.

The company said trading had rebounded strongly in the fourth quarter as like for like sales jumped 27.2 per cent, benefiting from the opening up of some state economies as the pandemic eased and pent up demand for camping equipment, auto parts, leisure and sporting goods translated into stronger sales.

This has continued into 2021 with like-for-like sales growing by 32 per cent in the first seven weeks of the year,

Super Retail reported a 20.9 per cent fall in full-year net profit to $110.2m, hit by one off items of $54m for backpaid wages, the exit of non-core businesses, support office restructure costs and the accelerated write downs. The company said that normalised profit was $154.1m, up 1 per cent.

Total sales for the year rose 4.2 per cent $2.83bn while online sales improved by 44.4 per cent to $290.5m. Like-for-like sales were up by 3.6 per cent.

Super Retail declared a final dividend of 19.5c per share, down from 28c, and payable on October 2.

“The group’s omni-retail strategy has enabled our businesses to adapt quickly to changing consumer behaviour during COVID-19 and delivered a strong trading performance,” Mr Hegarty.

Following a successful $203m equity raising, completed in July, the group has a strong balance sheet, with no net bank debt, and is well positioned to execute its omni-retail strategy, optimise footprint and take advantage of growth opportunities.

Group online sales more than doubled in the fourth quarter compared with click & collect representing 34 per cent of sales. More than 1 million customers made their first online purchase with the group during the year.

Supercheap Auto retail chain sales were up 7.6 per cent, like for like sales better by 6.3 per cent and pre-tax earnings up by 11.9 per cent to $134.9m. Auto accessories and auto maintenance, which represents roughly three quarters of divisional revenue, was the strongest performing categories.

Rebel Sport sales increased by 3.3 per cent to $1.038bn and earnings lifted 3 per cent to $96.6m. Fitness and hardgoods were the best performing categories, as COVID-19 restrictions led to strong demand for home fitness products.

BCF, which sells boating, camping and fishing goods, reported a 4 per cent increase in sales to $535m with earnings down 25 per cent to $15.7m as the pandemic hit outdoor activity.

At camping chain Macpac sales fell by 5 per cent to $131.9m and earnings fell by almost half to $7.2m as the impact of summer bushfires on peak Christmas trading and COVID-19 hurt profits.

Shares in Super Retail rose 17c, or 1.6 per cent, to $10.68.