Solomon Lew-led Premier’s sales, profit boost delivers dividend windfall

Shares in the retailer, led by billionaire Solomon Lew, surged 13 per cent after it bounced back from the pandemic with record sales, generating bumper dividends.

Record sales from pyjama retailer Peter Alexander and women’s fashion chain Portmans has generated better than expected full year revenue and profits for Solomon Lew’s Premier Investments.

Shareholders are now being rewarded with almost $200m in ordinary and special dividends.

However, the sharemarket shake-out and sustained falls across equity markets did take a large chunk out of the value of Premier Investments’ 26.2 per cent stake in kitchen brands company Breville with that stake now valued at $760.3m, compared to $1.2bn in 2021.

Shares soared 13.6 per cent to $23.47 by midafternoon.

Stronger trading by department store owner Myer and its improving share price saw the value of Premier Investments’ stake in Myer grow by $12m over 2022.

Premier Investments, whose brands also include Smiggle, Just Jeans and Dotti has bounced back from Covid-19 lockdowns to post record sales for fiscal 2022 and record pre-tax earnings.

Sales at Peter Alexander have been booming. Picture: Jono Searle.

And despite the uncertainty in the economic outlook, Premier Investments will direct a large portion of its almost $500m in cash reserves to investors after it announced on Thursday a series of capital management actions to reward shareholders.

Premier Investments, which is controlled by the billionaire, has unveiled a fully franked final dividend of 54c per share, up from 46c for the same time last year, as well as a special fully franked dividend of 25c per share.

Premier will also conduct an on-market share buyback of up to $50m over the next 12 months.

To be paid on January 25, investors will be handed $199m in dividends for 2022 against $127m in 2021 and $111m in 2020.

Premier Investments last paid a special dividend of 20c per share in 2009.

Mr Lew, whose family own 42.43 per cent of Premier Investments, will pocket $84.4m in dividend payments for 2022 and could also see his stake in the fashion retail owner grow slightly, if he doesn’t sell into the share buyback.

Premier Investments CEO Richard Murray and chairman Solomon Lew have seen a strong start to FY23. Picture: Ian Currie

Premier Investments was the last major retailer to unveil its full-year results for 2022, to record a 3.94 per cent rise in full-year revenue to $1.5bn for the 12 months to July 30 as net profit lifted 4.91 per cent to $285.2m.

The current reporting period was 52 weeks against 53 weeks for 2021.

The profit was ahead of market consensus of net earnings of $248.1m, while the company’s revenue for the year was also ahead of expectations of around $1.45bn.

Mr Lew, chairman of the group, said the company delivered an impressive full year result for its shareholders, especially in the context of significant operational challenges that included government mandated lockdowns, global supply chain complexities and omicron disruption.

“Premier Retail earnings before interest and tax is up 10.1 per cent on the prior year and is more than double pre-pandemic levels,” he said.

“This is testament to the seamless leadership transition to Richard Murray, the unrelenting focus on execution by our management team, and the commitment of our people.”

Across Premier Retail, its portfolio of fashion retail operations, sales rose 5.2 per cent despite 42,675 store trading days lost in the first half of fiscal 2022 due to Covid-19 lockdowns.

It delivered record Peter Alexander sales of $428.5m, up 11.4 per cent while Smiggle rebounded after being particularly impacted by school shutdowns from the pandemic with sales of $261.2m, up 24.6 per cent.

Premier Retail chief executive Richard Murray, who Mr Lew poached from JB Hi-Fi, said the continuing challenges of the pandemic had been a focus in his first year with Premier.

“So it is deeply rewarding to announce a successful result to our stakeholders against the background of such a difficult environment,” Mr Murray said.

“Our portfolio of seven iconic brands has continued to perform, building on their distinctive market positions during the year. We continue to invest in our omni-channel offering, delighting our customers however they choose to engage with us.”

The value of Premier Investments’ stake in Myer grew by $12m in 2022. Picture: Britta Campion

Premier Investments said the first half of 2023 had opened strongly with total sales for the first seven weeks up 46.7 per cent.

“The strong start to the first half of 2023 and clean inventory position has given the group confidence that it is well positioned to drive sales through the critical Black Friday, Cyber Monday, Christmas, Boxing Day Sales and ‘Back to School’ trading periods ahead,” the company said.

Premier Investments was also sitting on a Myer stake worth $75.9m at the end of fiscal 2022, up from $63.5m booked in 2021.

Last month, Mr Lew fired off his latest salvo in his now five-year campaign to grab board control of Myer, using a recently increased stake in the department store owner to demand the appointment of ex-Myer Grace Bros boss Terence McCartney as director.

Premier Investments is the department store’s largest shareholder with a stake of just under 23 per cent and has tried repeatedly to get a number of candidates, including Mr McCartney onto the Myer board in recent years.

Mr Lew is seeking a motion at the Myer annual meeting in November to place Mr McCartney, a non-executive director of Premier Investments, on the company’s board.

Originally published as Solomon Lew-led Premier’s sales, profit boost delivers dividend windfall