Super Retail fast-tracks CEO exit

Super Retail’s CEO will step down ahead of schedule after it discovered a second instance of its staff being underpaid.

Incoming Super Retail Group CEO Anthony Heraghty with outgoing chief Peter Birtles at the Super Cheap Auto store in Lawton. Picture: AAP

The chief executive of Super Retail Group Peter Birtles will step down from the retail chain earlier than first announced after the company discovered a second instance of its staff being underpaid.

Last year, Super Retail, whose chains include BCF, Macpac, Rebel and Supercheap Auto, revealed that staff had been underpaid by around $8 million but this morning the company said it had now discovered another instance of workers being short changed, this time retail managers.

Super Retail said it will book costs of $43m in its half-year result linked to the discovery it had underpaid some of its store managers.

Mr Birtles was to step down at the end of March and make way for the new CEO but after the latest underpayment issue was unearthed he approached the board and offered to exit the company on February 20, accelerating his departure.

Unveiling its provisional December half results this morning, which showed group sales of $1.4 billion, up 6 per cent, and pre-tax earnings of $124.5m, up 9.6 per cent, the retailer (SUL) said it would make back payments and compensatory interest to its retail managers after completing a review into underpayments.

Super Retail Group also revealed EBITDA of $166.2m for the half, an increase of 11.3 per cent.

In its half-year results, to be released on Thursday, the company will book roughly $32m in pre-tax charges to cover the estimated cost of these back payments and another $11m in interest and payroll tax.

Super Retail was considered by many analysts as being especially exposed to competition from the recent entry of Amazon in Australia as well as other online players seems to have held up its sales and profit growth in the six months to Christmas.

All three of its retail segments generated an increase in EBIT for the first half.

Sales at its auto retailing arm, which is Supercheap Auto chains, lifted sales by 2.7 per cent to $530.8m with like for like sales growth of 1.8 per cent. Segment EBIT grew by 2.5 per cent to $57.1m.

Outdoor retailing, which includes the Macpac retail brand as well as BCF and Rays, saw sales increase by 16.5 per cent to $348.5m as EBIT increased 39.6 per cent to $22.9m. Gross margins at BCG were pinched by intense competition in the sector.

Its Rebel and sports retailing arm lifted sales by 4 per cent to $523.9m with like for like sales growth of 3.2 per cent. EBIT grew by 5.2 per cent to $54.4m.

In a trading update, the company said that like for like store sales growth was running at around 4 per cent in Supercheap Auto over the first six weeks of the second half, BCF had delivered around 8 per cent growth while Macpac has been 2 per cent below the growth for the same time last year. Like for like sales growth at Rebel was up 8 per cent over the six weeks period.