FY to 27/01/2019 $63.39M ($61.32M) +3.37% Fin Div 12.00cps

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EMAIL: announce@nzx.com
Notice of event affecting securities
Briscoe Group Limited
Geoffrey Peter ScowcroftDirectors Resolution
09 815 373709 815 373812032019
Briscoe Group Limited Ordinary SharesNZBGRE0001S4
In dollars and cents
RETAINED EARNINGS BRISCOE GROUP LIMITED
$0.1200
Enter N/A if not
applicable
$$0.008333$0.046667
$
NZD$0.021176
$26,597,940
Date Payable
29 March, 2019
26 March, 201929/03/2019

---

BRISCOE GROUP LIMITED
Results for announcement to the market
Reporting Period Full Year 29 January 2018 to 27 January 2019
Previous Reporting Period Full Year 30 January 2017 to 28 January 2018

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

$631,919

+4.4%
Profit from ordinary
activities after tax
attributable to shareholders


$63,393


+3.4%
Net Profit attributable to
shareholders.

$63,393

+3.4%

Final Dividend Gross amount per share Imputed amount per share

12.00 cents 12.00 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

Briscoe Group Posts Record Profit

Briscoe Group Limited (NZX/ASX code: BGP)

Highlights for the full year ended 27 January 2019
• Total sales $631.92 million, +4.43%
• Same store sales growth, +3.10%
• Gross profit $253.36 million, +4.74%
• Gross profit margin 40.09% (Last year 39.97%)
• EBIT $86.00 million, +3.16%
• NPAT $63.39 million, +3.37%
• Final dividend 12.00 cents per share, +4.35%
• Total dividend for the year 20.00 cents per share, +5.26%

The directors of Briscoe Group Limited announce a record net profit after tax (NPAT) of $63.39
million the year (52 weeks) ending 27 January 2019, a 3.37% increase on the $61.32 million for
the previous year (52 weeks).

Group Managing Director, Rod Duke, said “We are pleased to announce another record profit for
Briscoe Group in a challenging retail market which continues to contend with erratic consumer
confidence and economic indicators making customers even more determined than ever to seek
true value for money. The commitment and focus of the entire Briscoe Group team, both at
Support Office and throughout the retail operations network, has enabled us to remain focused on
delivering our unique value proposition which clearly resonates strongly with customers.”

The earnings were generated on sales revenue of $631.92 million, an increase of 4.43% on the
$605.14 million generated for the previous year.

Gross Margin dollars increased 4.74% for the period with gross margin percentage increasing from
39.97% to 40.09%. The increased gross margin percentage reflects improvements in stock-loss
measurements from improved loss prevention initiatives as well as targeted operational and buying
strategies designed to optimise the availability of product in relation to online fulfilment stores and
for specific promotional events.

As previously reported for the half-year result, the introduction of accounting standard NZ IFRS 15:
Revenue from contracts with customers, now means sales revenue reported by the Group includes
delivery fees charged to online customers for the delivery of products purchased directly online.
The corresponding cost incurred by the Group for delivery of product to customers is included in
the total cost of goods sold. Previously these amounts were offset and the net cost shown within
store expenses. The reclassification has the effect of increasing sales revenue and cost of goods
sold, while decreasing gross profit and store expenses. There is no impact on the Group’s reported
net profit after tax. The table below shows the full-year effect of the reclassification on selected
Group reported amounts, for both this year and last year.

Full Year 2018/19 Full Year 2017/18
Before
Reclassification
After
Reclassification
Before
Reclassification
After
Reclassification
Sales ($000) 629,612 631,919 603,086 605,136
Sales growth (%) 4.40% 4.43%
Same-store-sales growth % 3.06% 3.10%
Gross profit ($000) 256,088 253,355 244,172 241,894
Gross profit (%) 40.67% 40.09% 40.49% 39.97%
Store expenses ($000) 105,935 103,202 101,763 99,485
Earnings before interest and tax ($000) 85,995 85,995 83,364 83,364
Net profit after tax ($000) 63,393 63,393 61,325 61,325


During the year $21.59 million of capital investment was made by the Group of which $16.11
million represents predominantly development of property owned by the Group in Auckland and
Silverdale. The balance of capital investment was for the fit-out of new and relocated stores, online
platform improvements, security system upgrades and enhancements to system software and
hardware.

Inventories totalled $81.02 million at year-end, $6.53 million higher than the $74.49 million reported
for last year, reflecting the impact of the two additional Rebel Sport stores opened during the year,
the increased demand for online shopping as well as a higher mix of imported inventory this year
compared to last year’s year-end position.

Mr Duke said, “Economic uncertainty had certainly tested consumer confidence; increased wage
pressures, erratic fuel prices and a challenging New Zealand dollar, all factors which have and will
continue to impact retailers’ ability to maintain margins.

“Providing customers with an exceptional shopping experience whether it be through a physical
store, via online - or both, is a major focus for us and critical in defending our market position
against new and emerging competition.

“Our development programme progressed well during the year with two new Rebel Sport stores; in
Kerikeri during February 2018 and also at the new North Link Retail Centre at Papanui,
Christchurch in November. The Northlands Briscoe Homeware store relocated to the North Link
Retail Centre also during November.

“Progress has continued at pace on the build to replace the Group’s Support functions in Taylors
Road, Auckland. The new offices and retail space are on track for the Support Office to relocate by
September 2019 before the temporary relocation of the existing nearby Briscoes Homeware store,
to allow for its complete rebuild.

“Our online business continues to produce excellent sales growth, finishing the year around 27%
up on the previous year and we look forward to the launch of our new online platform later this
year. We constantly review the size and location of our fulfilments hubs to optimize the service
level and cost to serve from this important sales channel.

“We will continue to focus on our online offering while maintaining our proven strategy of adding
stores to our network as and when we identify suitable opportunities. Leveraging customer data
and our own knowledge and experience, provides a rich platform for us to deliver an outstanding
shopping experience for customers to access the best brands at the best prices.”

The 2018/19 NPAT includes dividends received of $6.40 million from the Group’s 18.9%
shareholding in Kathmandu Holdings Limited. Mr Duke said, “As the largest single shareholder,
Briscoe’s Board remains an interested observer of Kathmandu’s performance.

Group Chair Dame Rosanne Meo said, “This year’s results continue to show that customers
recognise and support a quality value proposition based around product, price and service.

“On behalf of the Board, I would like to acknowledge the great work done by all staff to maintain
Briscoe Group’s status as New Zealand’s top homeware and sporting goods retailer.”

Dame Rosanne announced that the directors have resolved to pay a final dividend of 12.00 cents
per share (cps). The dividend is fully imputed and, when added to the interim dividend of 8.00 cps,
brings the total dividend for the year to 20.00 cps, an increase of 5.26% over last year’s total
dividend of 19.00 cps.

The final dividend will be paid on 29 March 2019. The share register will close to determine
entitlements to the dividend at 5pm on 26 March 2019.


Tuesday 12 March 2019

Contact for enquiries:

Rod Duke
Group Managing Director
Tel: (09) 8153737

BRISCOE GROUP LIMITED
CONSOLIDATED INCOME STATEMENT
for the 52 week period ended 27 January 2019


52 Week
Period ended
27 January 2019
Restated
1.

52 Week
Period ended
28 January 2018
$000 $000
Sales revenue 631,919 605,136
Cost of goods sold (378,564) (363,242)
Gross profit
253,355 241,894
Other operating income
6,994 6,260
Store expenses (103,202) (99,485)
Administration expenses (71,152) (65,305)
Earnings before interest and tax 85,995 83,364

Finance income 754 567
Finance costs (142) (136)
Net finance income / (costs) 612 431

Profit before income tax 86,607 83,795
Income tax expense (23,214) (22,470)
Net profit attributable to shareholders 63,393 61,325

1. Refer below: Adoption of NZ IFRS 15

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 52 week period ended 27 January 2019


52 Week
Period ended
27 January 2019
52 Week
Period ended
28 January 2018
$000 $000
Net Profit attributable to shareholders 63,393 61,325

Other comprehensive income:

Items that may be subsequently
reclassified to profit or loss:
Change in value of investment in equity securities
994 18,845
Fair value (gain)/loss recycled to income statement from
cashflow hedge reserve
(3,904) 484
Fair value gain/(loss) taken to the cashflow hedge reserve 5,509 (621)
Deferred tax on fair value gain/(loss) taken to income statement
from cashflow hedge reserve
1,093 (136)
Deferred tax on fair value (gain)/loss taken to cashflow hedge
reserve (1,543) 174
Total other comprehensive income 2,149 18,746
Total comprehensive income attributable to shareholders 65,542 80,071

BRISCOE GROUP LIMITED
CONSOLIDATED BALANCE SHEET
as at 27 January 2019


Period ended
27 January 2019
Period ended
28 January 2018
$000 $000
ASSETS

Current assets
Cash and cash equivalents 80,777 78,193
Trade and other receivables 2,822 2,737
Inventories 81,017 74,494
Derivative financial instruments 793 47
Total current assets 165,409 155,471

Non-current assets
Property, plant and equipment 92,016 83,326
Intangible assets 2,520 1,364
Deferred tax 3,418 2,983
Investment in equity securities 101,989 95,427
Total non-current assets 199,943 183,100

TOTAL ASSETS 365,352 338,571

LIABILITIES

Current liabilities
Trade and other payables 83,754 81,161
Taxation payable 6,830 6,980
Derivative financial instruments 448 1,276
Total current liabilities 91,032 89,417

Non-current liabilities
Trade and other payables 779 726
Total non-current liabilities 779 726

TOTAL LIABILITIES 91,811 90,143

Net assets 273,541 248,428

EQUITY

Share capital 58,929 56,467
Cashflow hedge reserve 240 (915)
Share options reserve 1,097 1,045
Other reserves 27,738 26,744
Retained earnings 185,537 165,087

TOTAL EQUITY 273,541 248,428

Net Tangible Assets per Security (cents) 122.30 111.90

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
for the 52 week period ended 27 January 2019

52 Week
Period ended
27 January 2019

Restated
1.

52 Week
Period ended
28 January 2018
$000 $000
OPERATING ACTIVITIES


Cash was provided from

Receipts from customers 631,881 605,146
Rent received 589 801
Dividends received 6,405 5,216
Interest received 748 472
Insurance recovery - 243

639,623 611,878
Cash was applied to

Payments to suppliers & employees (529,107) (498,099)
Interest paid (142) (129)
Net GST paid (20,405) (22,418)
Income tax paid (24,249) (21,704)
(573,903) (542,350)

Net cash inflows from operating activities 65,720 69,528

INVESTING ACTIVITIES

Cash was provided from

Proceeds from sale of property, plant and equipment 4,905 6

4,905 6
Cash was applied to

Purchase of property, plant and equipment (19,632) (12,888)
Purchases of intangible assets (1,959) (1,116)
Investment in equity securities (5,568) -
(27,159) (14,004)

Net cash outflows from investing activities (22,254) (13,998)


FINANCING ACTIVITIES

Cash was provided from

Net proceeds from borrowings - -
Issue of new shares 2,178 3,282
2,178 3,282
Cash was applied to

Dividends paid (43,090) (40,710)
(43,090) (40,710)


Net cash outflows from to financing activities (40,912) (37,428)

Net increase in cash and cash equivalents 2,554 18,102
Cash and cash equivalents at beginning of period 78,193 60,066

Effect of exchange rate changes on cash and cash
equivalents 30 25
Cash and cash equivalents at period end 80,777 78,193

1. Refer below: Adoption of NZ IFRS 15

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the 52 week period ended 27 January 2019

Share Cashflow Share Other Retained Total
Capital Hedge Options Reserves Earnings Equity



Reserve Reserve



$000 $000 $000 $000 $000 $000
Balance at 29 January 2017

52,756 (816) 957

7,899

144,357 205,153
Net profit attributable to shareholders for the period

- - - - 61,325

61,325
Other comprehensive income:


Change in fair value of investment in equity securities

- - - 18,845 - 18,845
Net fair value loss taken through cashflow hedge reserve

- (99) - - - (99)
Total comprehensive income for the period

- (99) - 18,845 61,325 80,071
Transactions with owners:


Dividends paid

- - - - (40,710) (40,710)
Share options charged to income statement

- - 632 - - 632
Share options exercised

3,711 - (429) - - 3,282
Transfer for share options lapsed and forfeited

- - (115) - 115 -
Balance at 28 January 2018

56,467 (915)

1,045

26,744 165,087 248,428
Net profit attributable to shareholders for the period

- - - - 63,393 63,393
Other comprehensive income:


Change in value of investment in equity securities

- - - 994 - 994
Net fair value loss taken through cashflow hedge reserve

- 1,155 - - - 1,155
Total comprehensive income for the period

- 1,155 - 994 63,393 65,542
Transactions with owners:


Dividends paid

- - - - (43,090) (43,090)
Share options charged to income statement

- - 483 - - 483
Share options exercised

2,462 - (284) - - 2,178
Transfer for share options lapsed and forfeited

- - (147) - 147 -
Balance at 27 January 2019

58,929 240 1,097 27,738 185,537 273,541

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 28.7 27.8
Diluted EPS 28.3 27.3

Dividends Paid / Payable

Date Paid / To be paid
Cents per share (fully
imputed)
Interim Dividend for the period ended
27 January 2019
11 October 2018 8.00
Final Dividend for the period ended
27 January 2019
29 March 2019 12.00

Segment Information




For the period ended
27 January 2019

Homeware

$000


Sporting goods

$000

Eliminations /
Unallocated
$000


Total Group

$000

Sales Revenue


403,159

228,760

-

631,919


Earnings Before Interest
and tax



46,689

31,062

8,244

85,995





Restated
1.

For the period ended
28 January 2018

Homeware

$000


Sporting Goods

$000


Eliminations /
Unallocated
$000


Total Group

$000


Sales Revenue


385,217

219,919

-

605,136


Earnings Before Interest
and tax


46,120

30,225

7,019

83,364

1. Refer below: Adoption of NZ IFRS 15

Adoption of NZ IFRS 15

The adoption of NZ IFRS 15 has given rise to the reclassification of both delivery fees charged to
customers and the corresponding cost incurred by the Group for these customer deliveries. Delivery
fees charged to customers are considered to be part of the same performance obligation as the sale of
the goods, as control of the goods passes to customers when they physically receive the goods.
Previously, the delivery fees charged to customers and the corresponding cost incurred by the Group
have been offset and the net cost shown under store expenses. Under NZ IFRS 15, it has been
determined that control of the goods does not pass to the customer until delivery, because the
customer cannot use or otherwise benefit from the goods until obtaining possession of the goods,
which occurs on delivery. The reclassification has the following effects in the period ended 27 January
2019:
o increases sales revenue and receipts from customers by the amount of the delivery fees
charged by the Group to customers by $2.31 million,
o increases the cost of goods sold by the amount of the cost incurred by the Group for the
deliveries by $5.04 million, and
o decreases store expenses by $2.73 million
o increases payments made to suppliers by $2.31 million.


The Group’s income statement for the comparative period shown in these consolidated financial
statements has been restated to reflect the reclassification outlined above. A reconciliation
showing the adjustments made to the income statement to restate the prior period comparatives is
shown below:



Period Ended Adjustments Period Ended

28 January 2018 28 January 2018
Before Restatement After Restatement
$000 $000 $000
Sales revenue 603,086 2,050 605,136
Cost of goods sold (358,914)

(4,328) (363,242)
Gross profit 244,172

(2,278) 241,894
Other operating income 6,260

- 6,260
Store expenses (101,763)

2,278 (99,485)
Administration expenses (65,305) - (65,305)
Earnings before interest and tax 83,364

- 83,364

Finance income 567 - 567
Finance costs (136) - (136)
Net finance income/(costs) 431 - 431

Profit before income tax 83,795 - 83,795
Income tax expense (22,470) - (22,470)
Net profit attributable to
shareholders

61,325

- 61,325
As a result of the above reclassification the statement of cashflows for the period ended 28 January 2018 has
been restated to increase receipts from customers and payments made to suppliers by $2.05 million.