Full Year Results Announcement

Results for announcement to the market
Name of issuer BRISCOE GROUP LIMITED
Reporting Period Full-Year - 28 January 2019 to 26 January 2020
Previous Reporting Period Full-Year - 29 January 2018 to 27 January 2019
Currency New Zealand Dollars
Amount (000s) Percentage change
Revenue from continuing operations $653,017 +3.3%
Total Revenue $653,017 +3.3%
Net profit/(loss) from continuing
operations
$ 62,583* -1.3%
Total net profit/(loss) $ 62,583* -1.3%
Final Dividend
Amount per Quoted Equity Security $ 0.12500000
Imputed amount per Quoted Equity
Security
$ 0.04861111
Record Date 23 March 2020
Dividend Payment Date 31 March 2020
Current period Prior comparable period
Net tangible assets per Quoted Equity
Security
$ 1.3892 $1.2230
A brief explanation of any of the figures
above necessary to enable the figures
to be understood
* $62,583 above represents net profit after tax (NPAT) after the
impact of the new NZ IFRS 16 accounting standard. NPAT of
$65,007 is directly comparable to last year’s NPAT as both are
before the impact of NZ IFRS 16.
Refer tables below for further detail in relation to the impacts of
NZ IFRS 16 on income statement and balance sheet.

Refer to the section below “Full Year Review” for commentary.
Earnings before interest and tax (EBIT) is a non-GAAP measure.
Authority for this announcement
Name of person

authorised to make this
announcement
Geoff Scowcroft
Contact person for this announcement Rod Duke
Contact phone number + 64 9 815 3737
Contact email address rod.duke@briscoegroup.co.nz
Date of release through MAP

16/03/2020

Audited abridged financial statements accompany this announcement.

Full Year Review

Briscoe Group Limited (NZX/ASX code: BGP)

Highlights for the full year ended 26 January 2020:
• Total sales $653.0 million, +3.34%
• Same store sales growth, +2.04%
• Gross profit $257.5 million, +1.64%
• Gross profit margin 39.43% vs 40.09% last year
• Online sales growth, +16.20%
• Full year NPAT (before NZ IFRS 16 adjustment) $65.0 million, +2.54%
• Final Dividend 12.5cps, increase from 12.00cps last year, +4.17%
• Total Dividend 21.0cps, increase from 20.0cps last year, +5.00%

Rod Duke, Group Managing Director, said: “We are pleased to announce record sales, an
increased final dividend payment and, what would have been, another record profit for Briscoe
Group except for the accounting adjustment the company was required to make in relation to
the new leases accounting standard (see below). To achieve such results despite the ongoing
competitiveness and widely reported difficulties faced by many retailers, is a commendable
result.”

The earnings were generated on sales revenue of $653.0 million, an increase of 3.34% on the
$631.9 million generated for the previous year.

Gross Margin dollars increased 1.64% for the period with gross margin percentage decreasing
from 40.09% to 39.43%. The decreased gross margin percentage reflects the continued
intensity of competition across the retailing environment.

Rod Duke, said: “As we commented in February, the concentration of sales around Black
Friday promotions is increasingly influencing the traditional steady build through to Christmas.
New behaviours in customers continue to emerge and we are excited by the strategic initiatives
the team is developing in response. We operate in highly competitive markets, and while major
event-based campaigns are critical, customers are also constantly looking for more resourceful
and new ways to shop with us. This is a demanding time for retailers but we also see it as an
exciting next phase of our ongoing development.”

In addition to the competitive trading environment, the full-year reported bottom line, as was
the case for the half-year, will be impacted by the introduction of the new international
accounting standard in relation to the treatment of leases (NZ IFRS 16). The effect on the
Group’s income statement will be to lower the NPAT in comparison to the NPAT which would
have been reported under the previous accounting treatment. The impact of this change will be
$2.4 million and result in a reported NPAT of $62.58 million for the year (52 weeks) ending 26
January 2020. It is important to note that the impact of NZ IFRS 16 has no cash effect to the
Group and is for financial reporting purposes only (see tables below for more detail in relation
to the impacts of the new standard).

The 2019/20 NPAT includes dividends received of $6.8 million from the Group’s shareholding
in Kathmandu Holdings Limited. In addition, $2.7 million was received for rights entitlements
not exercised as a result of the Group’s decision to take up only half of its entitlement in
relation to Kathmandu’s capital raising process associated with their acquisition of the Rip Curl

business. Mr Duke said, “Including the $13.6 million additional investment made this year, the
total cost of our investment in Kathmandu is now $87.9 million and represents a 16.3%
shareholding. The Board considers the level of investment to be at an appropriate level and as
the largest single shareholder we continue to maintain a close interest in the company.”

In addition to the additional investment in Kathmandu, $19.2 million of capital investment was
made by the Group during the year of which $10.1 million represents predominantly
development of property owned by the Group. 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 $87.4 million at year-end, $6.4 million higher than the $81.0 million reported
for last year, predominantly reflecting the impact of the three new stores opened by the Group
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.

The store development programme progressed well throughout the year. During the first half,
following earthquake strengthening works, both the Briscoes Homeware and Rebel Sport
stores in New Plymouth underwent full refurbishments.

Projects continued at pace during the second half of the year lead by the completion of the
Group’s new Support Office at 1 Taylors Road, Auckland with the full support team relocated
by the end of August. Rod Duke said, “It’s a brilliant space and wonderful to have the full
support team together in one location.”

In September the existing Briscoes Homeware store at 36 Taylors Road was relocated to retail
space on the ground floor of the new Support Office building. This now allows for a complete
rebuild on the existing site for which siteworks have recently commenced.

September also saw the opening of a new Rebel Sport store in Newmarket, Auckland as part
of the exciting new Westfield retail redevelopment. This store reflects a contemporary fit-out
and design, parts of which will be replicated in future new and refurbished Rebel Sport stores.

The opening of new Briscoes Homeware and Rebel Sport stores - including online fulfilment
centres, in Mt Roskill during October were welcome additions to the Group’s Auckland network.
In addition to these new stores, the existing Briscoes Homeware store at Riccarton, in
Christchurch was relocated to a new site on Riccarton Road and an extension and full
refurbishment of the Tauranga Briscoes Homeware store was completed.

The Group’s online channels continued to experience strong growth finishing the year 16% up
on the previous year and now represents just over 11% of total Group sales. Rod Duke said,
“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 opportunities. The rollout of our ‘Click
and Collect’ offering will continue in the current year enhancing the way we engage with
customers across both the online and physical store channels.

“New Zealand retailing remains highly competitive and sensitive to continued cost and margin
pressures, an unpredictable New Zealand dollar, subdued consumer and business confidence
as well as the increasing significance of the COVID-19 (coronavirus) issue - all of which will
make it difficult for retailers to maintain margins. However, notwithstanding these headwinds,
we are confident that we have the right programmes and initiatives in place to leverage

opportunities to grow the business and deliver the experience and value to our customers to
ensure that we continue to be the first choice for homeware and sporting goods in New
Zealand.”

Group Chair Dame Rosanne Meo said, “This year’s results emphasise the Group’s ability to
perform and deliver improved performance in difficult trading conditions. 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.

In relation to the economic and social impact of the Government’s border control
announcements in the last two days and with the broader economic package still outstanding,
we are not underestimating the challenges we will face as an employer and as a business. It is
a complex outlook, but we feel that we are as well placed as any retailer to respond to our
customers’ ongoing and changing needs.”

Rod Duke this morning announced that in response to the growing economic uncertainty
surrounding COVID-19 (coronavirus) that he will be taking no salary at all through until at least
the end of July. He said, “I’m particularly proud of how the team is facing the challenge ahead. I
met this morning with the senior management team who unanimously agreed to a freeze on
their salary increases for the same period. We continue to monitor the situation closely, taking
steps to help protect our team and customers and to mitigate interruption to our business.”

Dame Rosanne announced that the directors have resolved to pay a final dividend of 12.5
cents per share (cps). The dividend is fully imputed and, when added to the interim dividend of
8.5cps, brings the total dividend for the year to 21.0cps, an increase of 5.00% over last year’s
total dividend of 20.00cps.

The final dividend will be paid on 31 March 2020. The share register will close to determine
entitlements to the dividend at 5pm on 23 March 2020.



Monday 16 March 2020
Contact for enquiries:

Rod Duke
Group Managing Director
Tel: + 64 9 815 3737








Briscoe Group Limited is a company incorporated in New Zealand and registered in Australia as a foreign company under the name
Briscoe Group Australasia Limited (ARBN 619 060 552). It is listed on the NZX Main Board and also the Australian Securities Exchange
as a foreign exempt entity. (NZX/ASX code: BGP).

TABLE 1: INCOME STATEMENT - IMPACTS OF NZ IFRS 16
PERIOD ENDED 26 JANUARY 2020

PERIOD ENDED
27 JANUARY
2019

VARIANCE
ACTUAL

ACTUAL

January 2020 vs January 2019

Previous
classification Adjustments under NZ IFRS 16
NZ IFRS 16
classification



Previous
classification
NZ IFRS 16
classification

Back out
rental
expense
Include
lease
depreciation
Include
lease
finance cost




$000 $000 $000 $000 $000

$000

$000 $000
Sales revenue

653,017

- -

-

653,017

631,919


21,098 21,098
Cost of goods sold

(395,515)

- -

-

(395,515)

(378,564)


(16,951)

(16,951)
Gross profit

257,502

- -

-

257,502

253,355


4,147 4,147
Other income

9,661

- -

-

9,661

6,994


2,667 2,667
Store expenses

(109,916)

28,813

(19,239)

-

(100,342)

(103,202)


(6,714) 2,860
Administration expenses

(70,161)

1,232

(669)

-

(69,598)

(71,152)

991

1,554
Earnings before interest and tax

87,086

30,045

(19,908)

-

97,223

85,995


1,091 11,228
Finance income

724

- -

-

724

754


(30) (30)
Finance costs

(131)

- -

(13,504)

(13,635)

(142)


11

(13,493)
Net finance income / (costs)

593

- -

(13,504)

(12,911)

612


(19)

(13,523)
Profit before income tax

87,679

30,045

(19,908)

(13,504)

84,312

86,607


1,072 (2,295)
Income tax expense

(22,672)

(8,412)

5,574

3,781

(21,729)

(23,214)


542

1,485
Net profit attributable to
shareholders

65,007

21,633

(14,334)

(9,723)

62,583

63,393


1,614 (810)

TABLE 2: BALANCE SHEET - IMPACTS OF NZ IFRS 16

FULL YEAR AS AT 26 JANUARY 2020

Previous
classification

NZ IFRS 16
classification

Difference
$000

$000

$000
ASSETS




Current assets




Cash and cash equivalents 67,414

67,414

-
Trade and other receivables 3,533

3,533

-
Inventories 87,414

87,414

-
Held-for-sale assets 5,408

5,408

-
Derivative financial instruments 269

269

-
Total current assets 164,038

164,038

-
Non-current assets




Property, plant and equipment 97,265

97,265

-
Intangible assets 3,464

3,464

-
Right-of-use assets -

266,001

266,001
Deferred tax 3,240

11,676

8,436
Investment in equity securities 154,104

154,104

-
Total non-current assets 258,073

532,510

274,437
TOTAL ASSETS 422,111

696,548

274,437
LIABILITIES




Current liabilities




Trade and other payables 82,601

81,260

(1,341)
Lease liabilities -

17,744

17,744
Taxation payable 4,895

4,895

-
Derivative financial instruments 1,014

1,014

-
Total current liabilities 88,510

104,913

16,403
Non-current liabilities




Trade and other payables 852

852

-
Lease liabilities -

278,664

278,664
Total non-current liabilities 852

279,516

278,664
TOTAL LIABILITIES 89,362

384,429

295,067
NET ASSETS 332,749

312,119

(20,630)
EQUITY




Share capital 60,752

60,752

-
Cashflow hedge reserve (519)

(519)

-
Equity-based remuneration reserve 841

841

-
Other reserves 66,251

66,251

-
Retained earnings 205,424

184,794

(20,630)
TOTAL EQUITY 332,749 312,119 (20,630)

BRISCOE GROUP LIMITED
CONSOLIDATED INCOME STATEMENT
for the 52 week period ended 26 January 2020


Period ended
26 January 2020
Period ended
27 January 2019
$000 $000
Sales revenue 653,017 631,919
Cost of goods sold (395,515) (378,564)
Gross profit
257,502 253,355
Other income
9,661 6,994
Store expenses (100,342) (103,202)
Administration expenses (69,598) (71,152)
Earnings before interest and tax 97,223 85,995

Finance income 724 754
Finance costs (13,635) (142)
Net finance income (12,911) 612

Profit before income tax 84,312 86,607
Income tax expense (21,729) (23,214)
Net profit attributable to shareholders 62,583 63,393

Comparative figures in the above consolidated income statement have not been restated to reflect the impact of NZ IFRS 16

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 52 week period ended 26 January 2020


Period ended
26 January 2020
Period ended
27 January 2019
$000 $000
Net Profit attributable to shareholders 62,583 63,393
Other comprehensive income:
Items that will not be subsequently reclassified to profit or loss:
Change in value of investment in equity securities 38,513 994
Items that may be subsequently reclassified to profit or loss:
Fair value gain recycled to income statement (4,077) (3,904)
Fair value gain taken to the cashflow hedge reserve 3,022 5,509
Deferred tax on fair value gain taken to income statement 1,142 1,093
Deferred tax on fair value gain taken to cashflow hedge reserve (846) (1,543)
Total other comprehensive income 37,754 2,149
Total comprehensive income attributable to shareholders 100,337 65,542


Comparative figures in the above consolidated statement of comprehensive income have not been restated to reflect the impact of
NZ IFRS 16

BRISCOE GROUP LIMITED
CONSOLIDATED BALANCE SHEET
As at 26 January 2020


26 January 2020 27 January 2019
$000 $000
ASSETS
Current assets
Cash and cash equivalents 67,414 80,777
Trade and other receivables 3,533 2,822
Inventories 87,414 81,017
Held-for-sale assets 5,408 -
Derivative financial instruments 269 793
Total current assets 164,038 165,409

Non-current assets
Property, plant and equipment 97,265 92,016
Intangible assets 3,464 2,520
Right-of-use assets 266,001 -
Deferred tax 11,676 3,418
Investment in equity securities 154,104 101,989
Total non-current assets 532,510 199,943
TOTAL ASSETS 696,548 365,352

LIABILITIES

Current liabilities

Trade and other payables 81,260 83,754
Lease liabilities 17,744 -
Taxation payable 4,895 6,830
Derivative financial instruments 1,014 448
Total current liabilities 104,913 91,032

Non-current liabilities
Trade and other payables 852 779
Lease liabilities 278,664 -
Total non-current liabilities 279,516 779
TOTAL LIABILITIES 384,429 91,811

Net assets 312,119 273,541

EQUITY
Share capital 60,752 58,929
Cashflow hedge reserve (519) 240
Equity-based remuneration reserve 841 1,097
Other reserves 66,251 27,738
Retained earnings 184,794 185,537

TOTAL EQUITY 312,119 273,541


Comparative figures in the above consolidated balance sheet have not been restated to reflect the impact of NZ IFRS 16

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
for the 52 week period ended 26 January 2020


Period ended
26 January 2020
Period ended
27 January 2019
$000 $000
OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers 652,701 631,881
Rent received 12 589
Dividends received 6,832 6,405
Premium received from KMD rights issue 2,720 -
Interest received 850 748
Insurance recovery 97 -
663,212 639,623
Cash was applied to:
Payments to suppliers & employees (525,678) (529,107)
Interest paid (13,631) (142)
Net GST paid (20,310) (20,405)
Income tax paid (24,085) (24,249)
(583,704) (573,903)

Net cash inflows from operating activities 79,508 65,720

INVESTING ACTIVITIES
Cash was provided from:
Proceeds from sale of property, plant and equipment 11 4,905
11 4,905
Cash was applied to:
Purchase of property, plant and equipment (17,410) (19,632)
Purchase of intangible assets (1,768) (1,959)
Investment in equity securities (13,602) (5,568)
(32,780) (27,159)

Net cash outflows from investing activities (32,769) (22,254)

FINANCING ACTIVITIES
Cash was provided from:
Issue of new shares 1,620 2,178
Net proceeds from borrowings - -
1,620 2,178
Cash was applied to:
Dividends paid (45,494) (43,090)
Lease liabilities payments (16,264) -
(61,758) (43,090)

Net cash outflows from financing activities (60,138) (40,912)

Net decrease in cash and cash equivalents (13,399) 2,554
Cash and cash equivalents at beginning of period 80,777 78,193
Effect of exchange rate changes on cash and cash
equivalents 36 30

CASH AND CASH EQUIVALENTS AT END OF PERIOD 67,414 80,777



Comparative figures in the above consolidated statement of cash flows have not been restated to reflect the impact of NZ IFRS 16

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the week period ended 26 January 2020

Share Cashflow Equity-Based Other Retained Total
Capital Hedge Remuneration Reserves Earnings Equity



Reserve Reserve



$000 $000 $000 $000 $000 $000
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 fair value of investment in equity securities

- - - 994 - 994
Net fair value gain 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
Impact of adopting NZ IFRS 16

- - - - (18,205) (18,205)
Adjusted balance at 28 January 2019

58,929 240 1,097 27,738 167,332 255,336
Net profit attributable to shareholders for the period

- - - - 62,583 62,583
Other comprehensive income:


Change in value of investment in equity securities

- - - 38,513 - 38,513
Net fair value loss taken through cashflow hedge reserve

- (759) - - - (759)
Total comprehensive income for the period

- (759) - 38,513 62,583 100,337
Transactions with owners:


Dividends paid

- - - - (45,494) (45,494)
Share options charged to income statement

- - 168 - - 168
Performance rights charged to income statement

- - 105 - - 105
Share options exercised

1,823 - (203) - - 1,620
Transfer for share options lapsed and forfeited

- - (373) - 373 -
Deferred tax on equity-based remuneration

- - 47 - - 47
Balance at 28 July 2019

60,752 (519) 841 66,251 184,794 312,119


Prior year figures in the above consolidated statement of changes in equity have not been restated to reflect the impact of NZ IFRS 16

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 28.2 28.7
Diluted EPS 28.0 28.3

Dividends Paid / Payable

Date Paid / To be paid Cents per share (fully
imputed)
Interim Dividend for the period ended
26 January 2020
8 October 2019 8.50
Final Dividend for the period ended
26 January 2020
31 March 2020 12.50

Segment Information




For the period ended
26 January 2020

Homeware

$000


Sporting goods

$000

Eliminations /
Unallocated
$000


Total Group

$000

Sales Revenue


410,908

242,109

653,017


Earnings Before Interest
and tax



49,390

36,447

11,386

97,223





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

Comparative figures in the above segment information have not been restated to reflect the impact of NZ IFRS 16

---

Template
Distribution Notice

Updated as at 18 December 2019



Please note: all cash amounts in this form should be provided to 8 decimal places

Section 1: Issuer information
Name of issuer Briscoe Group Limited
Financial product name/description Ordinary Shares
NZX ticker code BGP
ISIN (If unknown, check on NZX
website)
NZBGRE0001S4
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 23/03/2020
Ex-Date (one business day before the
Record Date)
20/03/2020
Payment date (and allotment date for
DRP)
31/03/2020
Total monies associated with the
distribution
1

$ 27,777,312.50000000
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.17361111
Gross taxable amount
3
$0.17361111
Total cash distribution
4
$0.12500000
Excluded amount (applicable to listed
PIEs)
$-
Supplementary distribution amount $0.02205882
Section 3: Imputation credits and Resident Withholding Tax
5

Is the distribution imputed Fully imputed X
Partial imputation
No imputation

1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.

If fully or partially imputed, please
state imputation rate as % applied
6

28%
Imputation tax credits per financial
product
$0.04861111
Resident Withholding Tax per
financial product
$0.00868056
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
%
Start date and end date for
determining market price for DRP

Date strike price to be announced (if
not available at this time)

Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)

DRP strike price per financial product
$
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms

Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Geoff Scowcroft
Contact person for this
announcement
Geoff Scowcroft
Contact phone number +64 9 815 5678
Contact email address geoff@briscoes.co.nz
Date of release through MAP

16/03/2020





6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.