FY to 29/01/2017 $59.42M ($47.14M) +26.1% Fin Div 11.00cps

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RETAINED EARNINGS BRISCOE GROUP LIMITED
28 March, 201731/03/2017
$
$24,148,465
In dollars and cents
Date Payable
Enter N/A if not
applicable
31 March, 2017
$0.1100
NZD$0.019412
$0.007639$0.042778
TO FAX ++64-4-473-1470
Geoffrey Peter Scowcroft
Briscoe Group Limited
Briscoe Group Limited Ordinary SharesNZBGRE0001S4
Notice of event affecting securities
09 815 373709 815 3738
Directors Resolution
03201714

---

BRISCOE GROUP LIMITED
Results for announcement to the market
Reporting Period Full Year 1 February 2016 to 29 January 2017
Previous Reporting Period Full Year 26 January 2015 to 31 January 2016

Amount (000s) Percentage change
Sales revenue from
ordinary activities

$582,840

+5.4%
Profit from ordinary
activities after tax
attributable to shareholders


$59,420


+26.1%
Net Profit attributable to
shareholders.

$59,420

+26.1%

Final Dividend Gross amount per share Imputed amount per share

11.00 cents 11.00 cents

Audit The abridged financial statements attached to this report
have been audited.

Comments: Refer to the section “Full Year Review” for commentary.
Earnings before interest and tax (EBIT) is a non-GAAP
measure.

Full Year Review

Highlights for the full year ended 29 January 2017
 Total sales $582.84 million, +5.42%
 Same store sales growth (adjusted for prior year 53rd week), +4.94%
 Gross profit $239.36 million, +6.92%
 Gross profit margin 41.07% (Last year 40.49%)
 EBIT $79.83 million, +21.07%
 NPAT $59.42 million, +26.06%
 Final dividend 11.00 cents per share, +15.79%
 Total dividend for the year 18.00 cents per share, +16.13%

The directors of Briscoe Group Limited announce an audited net profit after tax (NPAT) of $59.42
million for the year (52 weeks) ending 29 January 2017, a 26.06% increase on the $47.14 million
for the previous year (53 weeks).

The result includes a $2.03 million gain from the sale of property in Hastings and also the
subsequent $0.79 million deferred tax liability reversal in relation to this property created in 2011
as a result of legislation introduced in relation to the tax deductibility of depreciation on buildings.
Excluding these adjustments NPAT for the full year was $56.70 million or 20.28% higher than the
full year result reported for last year.

Group Managing Director, Rod Duke, said “We are pleased to announce another record profit for
Briscoe Group in a market that has been challenging for many retailers. The focus we place on
managing and improving our retail brands underpins our strong profit growth of recent years as we
continually drive to improve the way we do things in every area of the business. This year’s result
represents an increase of 77% over the result posted just three years ago at a compound annual
growth rate of 21% for the same period.”

The directors have resolved to pay a final dividend of 11.00 cents per share (cps). This compares
to last year’s final dividend of 9.50 cps. The dividend is fully imputed and, when added to the
interim dividend of 7.00 cps, brings the total dividend for the year to 18.00 cps, an increase of
16.13% over last year’s total dividend of 15.50 cps.

The final dividend will be paid on 31 March 2017. The share register will close to determine
entitlements to the dividend at 5 pm on 28 March 2017.

The earnings were generated on sales revenue of $582.84 million, an increase of 5.42% on the
$552.89 million reported in the previous year.

The Group operates on a weekly trading and reporting cycle resulting in 52 weeks for most years
with a 53 week year occurring once every 6 years as was the case last year. On a same store
basis and adjusting for the additional week included in last year’s 53 week period, the Group’s
sales for the year were 4.94% ahead of the same period last year.

The Group’s gross profit margin for the year increased from 40.49% to 41.07%, reflecting the
continued focus the Group has on inventory and promotion management. The ongoing refinement
of product ranges, careful foreign exchange management, enhancements to inventory allocation
processes and improvements in the analysis of promotions and store inventory are all important
factors in protecting and growing gross profit margin. Rod Duke said, “The relatively late start to
summer and unsettled weather patterns in most parts of the country made the selling of seasonal
products a little tougher but by identifying the issues quickly and holding our nerve we have sold
through seasonal stocks at an acceptable rate, protecting both margin and our closing inventory
position.”

Earnings before interest and taxation (EBIT) increased 21.07% from $65.94 million for 2015-16 to
$79.83 million for the 2016-17 year.

The profit result includes dividends received of $4.41 million from the Group’s 19.9% shareholding
in Kathmandu Holdings Limited. Rod Duke said, “We continue to monitor Kathmandu’s
performance closely as they seek to restore historical levels of profitability.”

The number of homeware stores across the Group remained at 47 during the year with the
opening in March 2016 of a Briscoes Homeware store at the new Northwest shopping
development at Westgate in Auckland offset by the closure in July 2016 of the Living & Giving
store in Albany. These changes, the relocation to larger premises of the Hastings Briscoes
Homeware store and extensions to the Dunedin, Te Rapa and Taranaki Street stores have
resulted in an increase in total floor area for homeware stores from 100,085 to 104,122 square
metres. Sporting goods store numbers increased by one during the year to 36 with the opening of
the new Rebel Sport store at Westgate, Auckland. Floor area also changed through projects at Te
Rapa and Hastings resulting in the total floor area for sporting goods stores increasing from 56,394
to 57,490 square metres.

On an adjusted same store sales basis the homeware and sporting goods segments returned
sales increases of 3.79% and 7.04% respectively for the year ended 29 January 2017.

During the year $18.28 million of capital investment was made by the Group of which $11.45
million represents development of property owned by the Group in Wellington at Taranaki Street
and in Petone and also in Auckland at Taylors Road. The balance of capital investment was
primarily for the fit-out of two new stores, the relocation of two stores, the refurbishment of five
stores and enhancements to system software and hardware.

Inventories totaled $78.93 million at year-end, being $1.27 million lower than the $80.20 million
reported for last year, reflecting the continual focus management has on inventory control.

Cash and bank balances as at 29 January 2017 were $60.07 million, compared to $17.55 million at
31 January 2016. This increase was impacted by the financial year-end cut-off date falling two
days before the end of the calendar month. Approximately $22 million of creditor payments are
included in the trade payables balance at year-end which were subsequently paid on 31 January
2017.

Net cash inflows from operating activities were $85.99 million, $46.09 million above those of last
year, primarily as a result of the abnormally high payments made in the previous year due to the
53 week financial period, as well as this period’s earlier closing date.

The results are for the 52 week period from 1 February 2016 to 29 January 2017.

Group Managing Director, Rod Duke, said “We completed another very full year of store
development, upgrades and refurbishments. Briscoes Homeware and Rebel Sport stores were
opened in March as part of the new Northwest shopping centre at Westgate in Auckland. This
development will grow in popularity as the remaining stages are completed and the surrounding
population growth takes effect. In May our Briscoes Homeware store at Wairau Park in Auckland
closed temporarily as a result of fire damage. We took the opportunity to completely re-fit the store
which reopened in July and has traded strongly since. A stockroom extension was undertaken
during June at The Base in Te Rapa, Hamilton delivering improved stock flow and additional space
was also secured adjacent to the Dunedin profit centre allowing us to expand its retail area,
improve storage capacity and add an online fulfilment centre for both Briscoes Homeware and
Rebel Sport. Our Briscoes Homeware and Rebel Sport stores in Hastings were relocated towards
the end of the year to an improved site with appropriately sized retail stores sharing back-of-house
facilities.

“A number of Group owned property projects were also progressed during the year. Our Briscoes
Homeware store at Taranaki Street in Wellington was extended, earthquake strengthened and re-

roofed and now offers a larger retail area and a much improved shopping environment. Demolition,
site works and construction is well underway at our Group owned Petone property in Wellington.
New Briscoes Homeware and Rebel Sport stores are on track to open during the first half of this
year replacing the two existing Briscoes Homeware stores at Petone and Lower Hutt as well as the
Lower Hutt Rebel Sport store, all of which will close. Demolition and site works began at 1-5
Taylors Road in Auckland. This site, which is very close to the existing Briscoes Homeware store
and the Group’s Support Office, will become the location for a new Support Office and a temporary
Briscoes Homeware store as we demolish and rebuild the existing Briscoes Homeware store. On
completion of the rebuild a new Rebel Sport store will open beneath the new Support Office. We
expect this major project to be completed during 2018.

“Our online business saw strong sales growth during the year and process reviews across all
service areas has resulted in improved order picking accuracy, reduced backorders, quicker
picking speed and faster dispatch times delivering a better service experience for our growing
number of online customers. Online sales growth was in excess of 40% and accounted for over
6% of Group sales for the year with strong growth anticipated to continue for the foreseeable
future. We remain committed to continual improvement of the overall shopping experience.

“Improved product availability both online and in bricks and mortar stores remains a key focus for
all teams across the business. During the second half of the year we improved our analytical ability
to obtain enhanced insights by store around this key performance metric. These insights are
assisting both store and support teams to better understand the size of the opportunities for
improvement. Trials are planned to test enhanced stock management processes which will drive
better product availability for customers and increase sales.


“We look forward to another year of improving and growing our business. Providing improved
service and engagement across all our channels and brands is always a priority for us and while
we have improved our performance measure in this area during the year we believe we can do
much better. To support this continued improvement we trialed a simplified customer engagement
programme across a number of stores. The trial was well received by the store teams involved and
immediately impacted positively on the performance measures. As a result we will expand to a
wider group of stores to drive its benefits through all stores.

“While Rebel Sport has continued to benefit from the popularity of ‘athleisure’ products there are
now more mainstream competitors in this sector. To combat this increased competition the Rebel
Sport merchandising team are working closely with our supply partners to ensure we have the best
range of products from the best brands.

“In addition to continuing work in relation to completing the Group owned property projects
commenced during the year, the store development team have a number of projects planned to
reconfigure or refurbish a number of stores across the Group. Three new online fulfilment sites will
be established in existing stores which will alleviate pressure as well as build capacity for further
online growth. A new Briscoes Homeware store at Rangiora in Christchurch is planned to open
toward the end of 2017.

“It is clear that the New Zealand retailing environment remains challenging with a number of
retailers struggling for growth, but we remain cautiously optimistic about the year ahead for Briscoe
Group.

“Online growth has continued at pace and we will support further growth by continuing to
streamline all processes and by trialing the effectiveness of ‘click and collect’ later in the year. Our
merchandise, operations and marketing teams will continue to focus on the protection of gross
profit margin percentage while driving sales growth across all categories and across all stores.
Inventory is in good shape as we start the new financial year and the team are excited about the
initiatives we have planned to improve sales and profitability. We are confident that we will
continue to strengthen our position as New Zealand’s leading retailer of homeware and sporting
goods.

“On behalf of the Board I would like to acknowledge the huge contribution again, from all team
members and thank them for their continued support and effort over the past 12 months.”

Tuesday 14
th
March 2017

Contact for enquiries:

Rod Duke
Group Managing Director
Tel: (09) 8153737

BRISCOE GROUP LIMITED
CONSOLIDATED INCOME STATEMENT
for the 52 week period ended 29 January 2017


52 Week
Period ended
29 January 2017
53 Week
Period ended
31 January 2016
$000 $000
Sales revenue 582,840 552,892
Cost of goods sold
(343,483) (329,021)
Gross profit
239,357 223,871
Other operating income
7,457 2,881
Store expenses (100,461) (94,758)
Administration expenses (66,526) (66,059)
Earnings before interest and tax 79,827 65,935

Finance income 237 1,007
Finance costs (369) (650)
Net finance income (132) 357

Profit before income tax 79,695 66,292
Income tax expense (20,275) (19,155)
Net profit attributable to shareholders 59,420 47,137

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 52 week period ended 29 January 2017


52 Weeks
Period ended
29 January 2017
53 Weeks
Period ended
31 January 2016
$000 $000
Net Profit attributable to shareholders 59,420 47,137


Other comprehensive income:

Items that may be subsequently
reclassified to profit or loss:
Change in value of investment in equity securities
15,637 (7,738)
Fair value loss/(gain) recycled to income statement
3,726 (14,950)
Fair value (loss)/gain taken to the cashflow hedge reserve (7,375) 13,480
Deferred tax on fair value (loss)/gain taken to income statement (1,043) 4,186
Deferred tax on fair value loss/(gain) taken to cashflow hedge
reserve 2,065 (3,775)
Total other comprehensive income 13,010 (8,797)
Total comprehensive income attributable to shareholders 72,430 38,340

BRISCOE GROUP LIMITED
CONSOLIDATED BALANCE SHEET
as at 29 January 2017


Period ended
29 January 2017
Period ended
31 January 2016
$000 $000
ASSETS

Current assets
Cash and cash equivalents 60,066 17,554
Trade and other receivables 2,559 2,334
Inventories 78,931 80,204
Held-for-sale assets - 5,375
Derivative financial instruments 44 2,620
Total current assets 141,600 108,087

Non-current assets
Property, plant and equipment 76,081 63,527
Intangible assets 960 1,538
Deferred tax 3,015 1,321
Investment in equity securities 76,582 60,945
Total non-current assets 156,638 127,331

TOTAL ASSETS 298,238 235,418

LIABILITIES

Current liabilities
Trade and other payables 84,970 63,261
Taxation payable 6,284 6,810
Derivative financial instruments 1,112 210
Total current liabilities 92,366 70,281

Non-current liabilities
Trade and other payables 719 713
Total non-current liabilities 719 713

TOTAL LIABILITIES 93,085 70,994

Net assets 205,153 164,424

EQUITY

Share capital 52,756 48,242
Cashflow hedge reserve (816) 1,811
Share options reserve 957 1,291
Other reserves 7,899 (7,738)
Retained earnings 144,357 120,818

TOTAL EQUITY 205,153 164,424

Net Tangible Assets per Security (cents) 93.02 74.86

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
for the 52 week period ended 29 January 2017

52 Weeks
Period ended
29 January 2017
53 Weeks
Year ended
31 January 2016
$000 $000
OPERATING ACTIVITIES

Cash was provided from

Receipts from customers 582,579 553,839
Rent received 792 874
Dividends received 4,414 2,008
Interest received 179 1,349
Insurance recovery 220 -
588,184 558,070
Cash was applied to

Payments to suppliers & employees (459,993) (479,164)
Interest paid (361) (683)
Net GST paid (20,373) (21,857)
Income tax paid (21,473) (16,468)
(502,200) (518,172)

Net cash inflows from operating activities 85,984 39,898

INVESTING ACTIVITIES

Cash was provided from

Proceeds from sale of property, plant and equipment 7,315 28
7,315 28
Cash was applied to

Purchase of property, plant and equipment (17,661) (12,097)
Purchases of intangible assets (615) (1,080)
Purchase of investment in equity securities - (68,683)
(18,276) (81,860)

Net cash outflows flows from investing activities (10,961) (81,832)

FINANCING ACTIVITIES

Cash was provided from

Net proceeds from borrowings - -
Issue of new shares 3,713 1,418
3,713 1,418
Cash was applied to

Dividends paid (36,051) (31,475)
(36,051) (31,475)

Net cash outflows from to financing activities (32,338) (30,057)

Net (decrease)/increase in cash and cash equivalents 42,685 (71,991)
Cash and cash equivalents at beginning of period 17,554 89,690
Foreign cash balance cash flow hedge adjustment (173) (145)

Cash and cash equivalents at period end 60,066 17,554

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the 52 week period ended 29 January 2017


Share Cashflow Share Other Retained Total

Capital Hedge Options Reserves Earnings Equity



Reserve Reserve



$000 $000 $000 $000 $000 $000
Balance at 25 January 2015

46,550 2,870 1,058 -

105,081
155,559
Net profit attributable to shareholders for the period

- - - - 47,137

47,137
Other comprehensive income:


Change in fair value of investment in equity securities

- - -

(7,738) -

(7,738)
Fair value gain recycled to income statement

- (14,950) - - - (14,950)
Fair value gain taken to cashflow hedge reserve

- 13,480 - - - 13,480
Deferred tax on fair value gain taken to income statement

- 4,186 - - - 4,186
Deferred tax on fair value gain to cashflow hedge reserve

- (3,775) - - - (3,775)
Total comprehensive income for the period

- (1,059) - (7,738) 47,137 38,340
Transactions with owners:


Dividends paid

- - - - (31,475) (31,475)
Share options charged to income statement

- - 582 - - 582
Share options exercised

1,692 - (274) - - 1,418
Transfer for share options lapsed and forfeited

- - (75) - 75 -
Balance at 31 January 2016


48,242 1,811

1,291

(7,738)
120,818 164,424
Net profit attributable to shareholders for the period

- - - - 59,420 59,420
Other comprehensive income:


Change in value of investment in equity securities

- - - 15,637 - 15,637
Fair value loss recycled to income statement

- 3,726 - - - 3,726
Fair value loss taken to cashflow hedge reserve

- (7,375) - - - (7,375)
Deferred tax on fair value loss taken to income statement

- (1,043) - - - (1,043)
Deferred tax on fair value loss to cashflow hedge reserve

- 2,065 - - - 2,065
Total comprehensive income for the period

- (2,627) - 15,637 59,420 72,430
Transactions with owners:


Dividends paid

- - - - (36,051) (36,051)
Share options charged to income statement

- - 637 - - 637
Share options exercised

4,514 - (801) - - 3,713
Transfer for share options lapsed and forfeited

- - (170) - 170 -
Balance at 29 January 2017

52,756 (816) 957 7,899 144,357 205,153

Earnings per Security (EPS)

Calculation of basic and fully diluted EPS in accordance with IAS 33: Earnings Per Share

Current full year
(cents per share)
Previous corresponding full
year (cents per share)
Basic EPS 27.2 21.7
Diluted EPS 26.5 21.2

Dividends Paid / Payable

Date Paid / To be paid Cents per share (fully
imputed)
Interim Dividend for the period ended
29 January 2017
10 October 2016 7.00
Final Dividend for the period ended
29 January 2017
31 March 2017 11.00

Segment Information




For the period ended
29 January 2017

Homeware

$000


Sporting goods

$000

Eliminations /
Unallocated
$000


Total Group

$000

Sales Revenue


372,507

210,333

-

582,840


Earnings Before Interest
and tax



46,381

27,747

5,699

79,827





For the period ended
31 January 2016

Homeware

$000


Sporting Goods

$000


Eliminations /
Unallocated
$000


Total Group

$000


Sales Revenue


357,875

195,017

-

552,892


Earnings Before Interest
and tax


40,449

24,962

524

65,935