JB Hi-Fi lifts dividend 22.5% as profit rises 6%

JB Hi-Fi will pay shareholders 337.0 cents a share for the year to 30 June, a rise of 22.5%, on group sales of $11.06 billion and net profit of $489.9 million reported to the ASX on Monday.

Profit rose 6.0% and earnings before interest and tax rose 5.8% to $734.4 million. Sales grew 4.8%. The dividend grew close to four times as fast as the profit behind it. The final payment of 127.0 cents is 75% of net profit and is fully franked.

The Australian JB Hi-Fi chain sold $7.42 billion, up 4.4%, with comparable sales up 3.2% and earnings of $547.3 million. Its gross margin slipped five basis points to 21.94%. The company put the growth down to computers, mobile phones, fitness products and small appliances, and said the fourth quarter slowed as supplier prices rose and technology stock ran short.

The Good Guys sold $2.94 billion, up 2.7%, and lifted earnings 6.0% to $184.0 million on a margin of 6.25%. New Zealand sold NZ$499.5 million, up 26.0%, and turned a NZ$4.3 million loss into NZ$4.1 million of earnings. e&s, the premium appliance business, sold $273.1 million and lost $0.4 million.

Online sales at the Australian chain were $1.28 billion, up 7.0%, and 17.2% of that business. The Good Guys sold $481.3 million online, up 13.1%.

Group chief executive Nick Wells said the company was "pleased to report record sales and solid earnings" and that "the group's brands continued to resonate and its teams continued to execute to a high standard" in what he described as uncertain retail conditions.

The company finished the year holding $206.5 million in net cash with no interest-bearing debt. It said it will keep opening stores and spending on digital capability and supply chain.

Two numbers are worth carrying into the new year. The first is whether the supplier price increases that slowed the fourth quarter keep going, because they arrive at the customer before they arrive in the accounts. The second is the Australian gross margin, the only one of the four businesses that went backwards this year while the payout ratio went up.