Half Year Results announcement

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 Quarterly
Half Year X Special
DRP applies
Record date 22/09/2020
Ex-Date (one business day before the
Record Date)
21/09/2020
Payment date (and allotment date for
DRP)
01/10/2020
Total monies associated with the
distribution
1

$ 20,021,940.00000000
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.12500000
Gross taxable amount
3
$0.12500000
Total cash distribution
4
$0.09000000
Excluded amount (applicable to listed
PIEs)
$-
Supplementary distribution amount $0.01588235
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
$0.03500000
Resident Withholding Tax per
financial product
$0.00625000
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

08/09/2020





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

---

Results for announcement to the market
Name of issuer BRISCOE GROUP LIMITED
Reporting Period Half-Year - 27 January 2020 to 26 July 2020
Previous Reporting Period Half-Year - 28 January 2019 to 28 July 2019
Currency New Zealand Dollars
Amount (000s) Percentage change
Revenue from continuing operations $292,407 -3.5%
Total Revenue $292,407 -3.5%
Net profit/(loss) from continuing
operations
$ 27,979 -1.3%
Total net profit/(loss) $ 27,979 -1.3%
Interim Dividend
Amount per Quoted Equity Security $ 0.090
Imputed amount per Quoted Equity
Security
$ 0.035
Record Date 22 September 2020
Dividend Payment Date 1 October 2020
Current period Prior comparable period
Net tangible assets per Quoted Equity
Security
$ 1.0715 $1.1013
A brief explanation of any of the figures
above necessary to enable the figures
to be understood
Refer to the section below “Half 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

08/09/2020

Unaudited abridged financial statements accompany this announcement.

Half Year Review

Highlights for the 26 week period – 27 January 2020 to 26 July 2020:
• Total sales $292.41 million, -(3.49)%
• Online sales growth, +99.85%
• Online sales as mix of total Group sales, 22.17%
• Gross profit $123.28 million, +0.32%
• Gross profit % 42.16% vs 40.56% last year
• Net profit after tax (NPAT) $27.98 million, -(1.30)%
• Interim Dividend 9.00 cps increase from 8.50 cps last year, +5.88%

The directors of Briscoe Group Limited (NZX/ASX code: BGP) announce a net profit after
tax (NPAT) of $27.98 million for the half-year ended 26 July 2020 compared to $28.35
million achieved for last year’s first half. The half-year results are unaudited.

The directors have resolved to pay an interim dividend of 9.00 cents per share (cps). This
compares to last year’s interim dividend of 8.50 cps. Books will close to determine
entitlements at 5pm on 22 September 2020 and payment will be made on 1 October 2020.

Rod Duke, Group Managing Director, said: “We’re delighted to have produced a strong first
half result despite the extraordinary upheavals experienced during this first six months. To
achieve a profit so close to last year, with stores unable to open for 50 days of that time, is
a great result.

“The Group was only eligible for the first round of Government wage subsidy and received
$11.5 million which assisted the result and supported our ability to pay the team’s normal
remuneration throughout Alert Levels 4 and 3. Other steps taken by the Group to minimise
the impact of Covid-19 disruptions also positively impacted profit. These included:
negotiating equitable solutions in relation to a wide range of trade and non-trade
expenditure with suppliers and landlords and salary and fee sacrifices across the senior
leadership team and Board.”

Also included in the result is a credit adjustment to tax expense totaling $0.53 million. This
has arisen from two reversals of deferred tax liability arising from: the sale of the Group’s
Nelson property and the reintroduction of tax depreciation on commercial and industrial
buildings as part of the COVID-19 Response (Taxation and Social Assistance Urgent
Measures) Act.

The Group did not receive a dividend during the period from its investment in Kathmandu
Holdings Limited (Kathmandu) as a result of their response to the COVID-19 situation. Last
year the Group’s half-year result included $1.71 million from Kathmandu.

Dame Rosanne Meo, Briscoe Group Chairman said, “The health and wellbeing of our team
and customers and the protection of existing jobs and incomes continue to be the primary
focus for the Board and leadership team. Whilst we recognise the extreme level of
uncertainty that continues to exist, I’m extremely proud of how the Group has achieved this

to date, especially the commitment and dedication from our front-line teams in-store and at
the distribution centre.”

The earnings were generated on sales revenue of $292.41 million compared to the
$302.98 million generated for the same period last year. First quarter sales decreased by
35.58% compared to last year, while second quarter sales, assisted by the extraordinary
increase in demand post-lockdown, rebounded to finish 28.24% ahead of the same period
last year.

Despite the shortfall to last year in sales, gross margin dollars closed the half year ahead of
last year as a result of the gross margin percentage increasing from 40.56% to 42.16%.
Rod Duke said, “The massive disruption to trading meant we needed to quickly re-think the
way we constructed our promotional activity and our ability to analyse and scenario-plan
has been invaluable for us. End-of-season product concentrated online, for example, has
been very successful. Working with suppliers to ensure continuity of product was also key
to protecting and growing margin during this half. Having less inventory in the business
also meant that, post lockdown, stores were significantly more efficient in processing and
managing stock-flows which positively impacted both sales and gross margin.”

In the period under review, homeware sales decreased 3.74% from $191.50 million to
$184.35 million and sporting goods sales decreased 3.07% from $111.48 million to
$108.06 million.

With the move to lockdown in March the Group’s online business experienced
extraordinary growth which has continued to be strong since stores reopened. During the
half-year online sales grew 99.85% compared to the first half of last year. Rod Duke said,
“The new online platform has managed the increased demand superbly and we now look
forward to leveraging its capability to further enhance the customer online experience.
During the half we also completed the roll-out of ‘Click and Collect’ across all stores. This
service is proving to be incredibly popular with customers and for the August period
accounted for over 30% of all online orders.”

Inventory levels as at 26 July 2020 were $86.67 million, down from $88.83 million at the
same time last year, despite an additional 3 stores. This reflects the significant disruption to
the supply chain, as a result of Covid-19, as well as highlighting the strength of the
relationships the Group has with suppliers to renegotiate orders already placed pre-Covid-
19. Rod Duke said, “We are grateful to our supply partners for the collaboration and co-
operation shown through these extraordinary times.”

Cash balances closed the period at $98.56 million compared to $67.42 million held at the
beginning of the financial period. Rod Duke, said “The steps taken by the Group to protect
the Company and preserve liquidity have ensured our balance sheet has remained strong
which is critically important in these uncertain and unpredictable times. The strong balance
sheet gives us the flexibility to continue to protect the business as well as fund strategic
initiatives to grow company profitability.”

Despite the major distraction across the entire business due to Covid-19, the Group
progressed a number of store development projects during this first half. In May both the

Briscoes Homeware and Rebel Sport Nelson stores were relocated to a new dual site with
more carparking and better access for customers. The new stores are bigger and brighter
with the Rebel Sport store featuring the new generation fit-out. The former Rebel Sport
premises which was owned by the Group was sold.

In July the refurbishment of the Tauranga Briscoes Homeware and Rebel Sport stores was
completed. The new configuration has resulted in a bigger Briscoes Homeware store and
new back-of-house and common team facilities.

Work also continued on a number of projects in relation to Group owned properties. The re-
roofing of Briscoes Invercargill is making good progress and is expected to be completed
by the end of October 2020.

Site works commenced at 36 Taylors Road, Auckland after the demolition of the former
Briscoes Homeware store. Rod Duke said, “We’re excited about the potential of this new
store, which will be bigger, brighter and feature a new contemporary fit-out. The opening of
this store is expected during the first quarter of 2021 and will then allow us to introduce a
new Rebel Sport store in the retail space on the ground floor of the new Support Office
building at 1 Taylors Road.”

The development at Silverdale is also continuing well with completion estimated late
October 2021. This will see the opening of new generation Briscoes Homeware and Rebel
Sport stores to service the significant catchment of Silverdale, Hibiscus Coast, Orewa and
surrounding areas.

Rod Duke, said “Towards the end of last year we established a range of plans to sustain
and build the business across the next 3-5 years. These plans revolve around three key
areas:
• Significantly enhancing the shopping experience our customers enjoy with us,
• An end to end review and redesign of our supply chain, from source to customer,
and
• Developing new streams of revenue.

“Work has begun on all three areas including engaging with KPMG to launch an internal
project to identify and implement supply chain improvements. We’re very excited about the
potential to unlock across all these streams and would expect to see some ‘quick wins’
emerging before the end of the year.

“The economic outlook for the second half is very uncertain, with the potential for disruption
ever present as we have experienced just recently during August with the imposition of
Alert Levels 3 and 2. We are extremely conscious of the widely reported need for
continuing caution in relation to future negative impacts of COVID-19 on key economic
indicators such as consumer spending, economic growth and unemployment.
Nevertheless, we are encouraged by the recovery we have seen since lockdown ended in
May and how that has been largely sustained across both online and physical stores.

“August has started the second half strongly for us and closed ahead of the same month
last year for sales, gross profit $s and gross profit %, despite our Auckland stores being
closed from 12 August through to and including 23 August.

“The senior leadership team continues to display a high degree of flexibility to this volatile
trading environment, whilst continuing to lay the foundations for strategic growth. I know we
have the right team in place across the entire business to weather these unpredictable
times and am confident that we have the right programmes underway to deliver improved
profit and returns to shareholders.”



Tuesday 8 September 2020
Contact for enquiries:

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

BRISCOE GROUP LIMITED
CONSOLIDATED INCOME STATEMENT
for the 26 week period ended 26 July 2020 (unaudited)


Period ended
26 July 2020
Restated
Period ended
28 July 2019
$000 $000
Sales revenue 292,407 302,984
Cost of goods sold (169,132) (180,102)
Gross profit
123,275 122,882
Other income
106 1,790
Store expenses (41,987) (47,170)
Administration expenses (35,446) (31,843)
Earnings before interest and tax 45,948 45,659

Finance income 228 477
Finance costs (7,456) (6,588)
Net finance income (7,228) (6,111)

Profit before income tax 38,720 39,548
Income tax expense (10,741) (11,201)
Net profit attributable to shareholders 27,979 28,347

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 26 week period ended 26 July 2020 (unaudited)


Period ended
26 July 2020
Restated
Period ended
28 July 2019
$000 $000
Net Profit attributable to shareholders 27,979 28,347
Other comprehensive income:

Items that will not be subsequently reclassified to profit or loss:
Change in value of investment in equity securities (97,935) (11,522)
Items that may be subsequently reclassified to profit or loss:

Fair value gain recycled to income statement (3,048) (1,025)
Fair value gain taken to the cashflow hedge reserve 1,989 1,439
Deferred tax on fair value gain taken to income statement 853 287
Deferred tax on fair value gain taken to cashflow hedge reserve (557) (403)
Total other comprehensive income (98,698) (11,224)
Total comprehensive income attributable to shareholders (70,719) 17,123

BRISCOE GROUP LIMITED
CONSOLIDATED BALANCE SHEET
As at 26 July 2020 (unaudited)


26 July 2020

Restated
28 July 2019
$000 $000
ASSETS

Current assets
Cash and cash equivalents 98,560 55,529
Trade and other receivables 2,672 2,659
Inventories 86,673 88,827
Held-for-sale assets - 5,521
Derivative financial instruments 65 924
Total current assets 187,970 153,460

Non-current assets
Property, plant and equipment 108,720 94,763
Intangible assets 3,463 2,634
Right-of-use assets 260,368 226,190
Deferred tax 14,240 11,070
Investment in equity securities 56,169 90,467
Total non-current assets 442,960 425,124
TOTAL ASSETS 630,930 578,584

LIABILITIES
Current liabilities
Trade and other payables 87,177 73,488
Lease liabilities 18,364 16,491
Taxation payable 4,237 2,398
Derivative financial instruments 1,814 192
Total current liabilities 111,592 92,569

Non-current liabilities
Trade and other payables 969 808
Lease liabilities 276,801 238,121
Total non-current liabilities 277,770 238,929
TOTAL LIABILITIES 389,362 331,498

Net assets 241,568 247,086

EQUITY

Share capital 60,869 60,074
Cashflow hedge reserve (1,282) 538
Equity-based remuneration reserve 892 994
Other reserves (31,684) 16,216
Retained earnings 212,773 169,264

TOTAL EQUITY 241,568 247,086

Net Tangible Assets per Security (cents) 107.15 110.13

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
for the 26 week period ended 26 July 2020 (unaudited)


Period ended
26 July 2020
Restated
Period ended
28 July 2019
$000 $000
OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers 292,366 302,633
Rent received 7 6
Dividends received - 1,707
Interest received 220 483
Insurance recovery - 77
292,593 304,906
Cash was applied to:
Payments to suppliers & employees (211,168) (254,641)
Interest paid (7,456) (6,589)
Net GST paid (11,475) (7,893)
Income tax paid (13,666) (15,896)
(243,765) (285,019)

Net cash inflows from operating activities 48,828 19,887

INVESTING ACTIVITIES
Cash was provided from:
Proceeds from sale of property, plant and equipment 1,996 -
1,996 -
Cash was applied to:
Purchase of property, plant and equipment (12,587) (11,174)
Purchase of intangible assets (846) (489)
Investment in equity securities - -
(13,433) (11,663)

Net cash outflows from investing activities (11,437) (11,663)

FINANCING ACTIVITIES
Cash was provided from:
Issue of new shares 99 1,017
Net proceeds from borrowings - -
99 1,017
Cash was applied to:
Dividends paid - (26,613)
Lease liabilities payments (6,289) (7,904)
(6,289) (34,517)

Net cash outflows from financing activities (6,190) (33,500)

Net decrease in cash and cash equivalents 31,201 (25,276)
Cash and cash equivalents at beginning of period 67,414 80,777
Foreign cash balance cash flow hedge adjustment (55) 28

CASH AND CASH EQUIVALENTS AT END OF PERIOD 98,560 55,529

BRISCOE GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the 26 week period ended 26 July 2020 (unaudited)


.
Notes Share Cashflow Equity-Based Other Retained Total
Capital Hedge Remuneration Reserves Earnings Equity
Reserve Reserve
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
$000 $000 $000 $000 $000 $000

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

- - - - 28,347

28,347
Other comprehensive income:
Change in value of investment in equity securities 10 - - - (11,522) - (11,522)
Net fair value gain taken through cashflow hedge reserve - 298 - - - 298
Total comprehensive income for the period

- 298 -

(11,522) 28,347 17,123
Transactions with owners:
Dividends paid 13 - - - - (26,613) (26,613)
Share options charged to income statement - - 168 - - 168
Performance rights charged to income statement - - 43 - - 43
Share options exercised 12 1,145 - (128) - - 1,017
Transfer for share options lapsed and forfeited - - (198) - 198 -
Deferred tax on equity-based remuneration - - 12 - - 12
Balance at 28 July 2019 (Restated)

60,074 538 994

16,216 169,264 247,086
Net profit attributable to shareholders for the period

- - - - 34,236

34,236
Other comprehensive income:
Change in value of investment in equity securities 10 - - - 50,035 - 50,035
Net fair value loss taken through cashflow hedge reserve - (1,057) - - - (1,057)
Total comprehensive income for the period

- (1,057) - 50,035 34,236

83,214
Transactions with owners:
Dividends paid - - - - (18,881) (18,881)
Share options charged to income statement - - - - - -
Performance rights charged to income statement - - 62 - - 62
Share options exercised 678 - (75) - - 603
Transfer for share options lapsed and forfeited - - (175) - 175 -
Deferred tax on equity-based remuneration - - 35 - - 35

Balance at 26 January 2020 60,752 (519) 841 66,251 184,794 312,119
Net profit attributable to shareholders for the period

- - - - 27,979

27,979
Other comprehensive income:
Change in value of investment in equity securities 10 - - - (97,935) - (97,935)
Net fair value gain taken through cashflow hedge reserve - (763) - - - (763)
Total comprehensive income for the period

- (763) -

(97,935) 27,979

(70,719)
Transactions with owners:
Dividends paid 13 - - - - - -
Share options charged to income statement - - - - - -
Performance rights charged to income statement - - 68 - - 68
Share options exercised 12 117 - (18) - - 99
Transfer for share options lapsed and forfeited - - - - - -
Deferred tax on equity-based remuneration - - 1 - - 1
Balance at 26 July 2020

60,869 (1,282) 892 (31,684) 212,773 241,568

Earnings per Security (EPS)

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

Current half-year
(cents per share)
Previous corresponding half-
year (cents per share)
Basic EPS 12.59 12.78
Diluted EPS 12.52 12.66

Dividends Paid / Payable

Date Paid / To be paid Cents per share (fully
imputed)
Final Dividend for the period ended
26 January 2020
Cancelled
Interim Dividend for the period ended
31 January 2021
1 October 2020 9.00

Segment Information




For the period ended
26 July 2020

Homeware

$000


Sporting goods

$000

Eliminations /
Unallocated
$000


Total Group

$000

Sales Revenue


184,347

108,060

292,407


Earnings Before Interest
and tax



28,062

16,885

1,001

45,948





For the period ended
28 July 2019

Homeware

$000


Sporting Goods

$000


Eliminations /
Unallocated
$000


Total Group

$000


Sales Revenue


191,503

111,481

302,984


Earnings Before Interest
and tax


25,825

17,167

2,667

45,659

Restatement
The Group adopted NZ IFRS 16 Leases on 28 January 2019 and the impacts of this adoption was
disclosed in the interim financial statements of the Group for the period ended 28 July 2019. As disclosed
in the financial statements for the period ended 26 January 2020 there has been significant change in
market practice in relation to deriving the incremental borrowing rate. The financial statements for the
period ended 26 January 2020 were prepared with incremental borrowing rates that better aligned with the
changed market practice. The comparatives in these interim financial statements of the Group have been
restated to reflect the transition note included in the financial statements for the period ended 26 January
2020.

Extracts from the consolidated balance sheet and the consolidated income statement are shown below
detailing the specific impacts as a result of the restatement.


Consolidated Income Statement (extract):




26 Week Period
28 July 2019
Unaudited
Before Restatement
$000
Adjustments



$000
26 Week Period
28 July 2019
Unaudited
After Restatement
$000

Store expenses (46,531) (639) (47,170)
Administration expenses (31,814) (29) (31,843)

Earnings before interest and tax 46,327 (668) 45,659

Finance costs (7,360) 772 (6,588)
Net finance income/(costs) (6,883) 772 (6,111)

Profit before income tax 39,444 104 39,548
Income tax expense (11,172) (29) (11,201)
Net profit attributable to shareholders 28,272 75 28,347







Consolidated Balance Sheet (extract):




28 July 2019
Unaudited
Before Restatement
$000
Adjustments


$000
28 July 2019
Unaudited
After Restatement
$000

Right-of-use assets 211,426 14,764 226,190
Deferred tax 11,770 (700) 11,070

Current lease liabilities 14,988 1,503 16,491

Non-current lease liabilities 227,360 10,761 238,121

NET ASSETS 245,286 1,800 247,086

Retained earnings 167,464 1,800 169,264