- Adairs (ADH) has seen its statutory net profit after tax increase 233.4 per cent to $43.9 million in H1 FY21
- Despite closing its Greater Melbourne stores for nearly half the period due to COVID-19, the home goods retailer delivered record sales and profit
- Earnings before interest and tax was up 166 per cent to $60.2 million while group sales were up 34.8 per cent to $243 million
- Online sales were also up 20.9 per cent and accounted for 28.9 per cent of all sales in the half-year
- The construction of the company’s National Distribution Centre is progressing well and remains on track to be operational by the end of Q1 FY22
- Once fully operational, the centre is expected to deliver $3.5 million in annual savings
- Finally, due to the success of the half, Adairs will repay the $6.1 million it received in JobKeeper benefits
- Adairs is down 1.19 per cent on the market and shares are trading at $4.15
Adairs (ADH) has seen its statutory net profit after tax increase 233.4 per cent to $43.9 million in H1 FY21.
Despite closing its Greater Melbourne stores for nearly half the period due to COVID-19, the home goods retailer delivered record sales and profit.
Adairs credits these increases to differentiated product offering and a higher average selling price.
Earnings before interest and tax (EBIT) was $60.2 million, up 166 per cent from $22.6 million in H1 FY20.
Group sales were up 34.8 per cent to $243 million, with online sales up 20.9 per cent to $90.2 million.
Additionally, online sales accounted for 28.9 per cent of total sales, up from 17.9 per cent in H1 FY20.
Adairs’ loyalty club, Linen Lover Club, continued to grow strongly and now has more than 900,000 members.
Three new homemaker stores opened during the half with one in Warragal in Victoria, one in Belmont in WA, and one in Botany, NZ.
Unfortunately, two of its smaller stores closed – a regular Adairs store in South Australia and an Adairs Kids store in Bondi, NSW.
Adairs finished the half with inventory intentionally reduced to provide more space in store.
Mocka
Despite consistent stock shortages, Adairs’ subsidiary Mocka still achieved record sales in the half.
It received $28 million in sales for H1 FY21, a 44.4 per cent increase from H1 FY20, as well as a 100 per cent increase in EBIT to $7 million.
“Our first-half FY21 results are outstanding and a clear testament to the strategic health, operational excellence and resilience for our business,” CEO and Managing Director Mark Ronan commented.
“For the group to achieve an EBIT outcome in six months equal to the EBIT of the full year in FY20, which itself was a record for the company, is something every member of the Adairs and Mocka teams can be proud of,” he said.
National Distribution Centre
The construction of the National Distribution Centre is progressing well and remains on track to be operational by the end of Q1 FY22.
However, there were some delays due to Victorian building restrictions and delays in receiving parts from overseas due to COVID-19.
Once fully operational, the centre is expected to deliver $3.5 million in annual savings.
JobKeeper
Due to the success of the half, Adairs will repay the $6.1 million it received in JobKeeper benefits.
This will be recognised in its H2 FY21 results.
Balance sheet
At the end of the half, Adairs had $22.1 million in cash, compared to a net debt of $1 million at the end of FY20.
Adairs is down 1.19 per cent on the market and shares are trading at $4.15 at 12:38 pm AEDT.