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| Business Description | |
| Company's activities |
David Jones (DJS) is a leading retailer with stores throughout Australia. The Group operates 36 department stores and 2 warehouse outlets. |
| Strategic Analysis | |
| Analysis of company's stated forward thinking |
DJS is focused on increasing the number of exclusive lines in effort to deliver a differentiated product offering with strong and up-market brands. Uncertainty surrounding the sale of Myer stores has provided DJS an opportunity to lock in exclusive supply arrangements luring brands way from Myer. DJS has also expressed interest for up to 10 Myer stores. Management commented that stores pitched for would be a valuable growth avenue for shareholders. A successful deal could significantly improve group profitability.DJS is continuing with its strategic review of core department stores. The restructure has seen the exit from Foodchain (achieved June 03), repositioning the Online business (general merchandise ceased to be available online from July 2003) and a thorough review and assessment of the store portfolio. Core department store revenue growth has been supported by ongoing store refurbishments.In response to a slowing retail environment DJS aims to maintain profit growth through their cost efficiency program and tight inventory management. Capital expenditure will also be capped at $50 million between FY04 and FY08.David Jones reported NPAT up 14.7% to $54.5 for the half-year ended 31 December 2005. Revenues from ordinary activities were $962.8m, compared to $978.4m from the same period last year. Diluted EPS was 11.8 cents compared to 10.4 cents last year. Net operating cash flow was $75.2m compared to $41.5m last year. The interim dividend declared was 7.0 cents compared with 6.0 cents last year. A key contributor to the half's solid profit was the strong performance of the company's Core Department Store business, which reported an 18.6% increase in EBIT on the pcp. The company reaffirmed its previous profit after tax guidance of the lower end of its 5%-10% target growth range. A mild strengthening of consumer spending is expected in FY07 and the company believes that its scheduled refurbishment projects as well as the completion of its 400 new brand installations will see an increase in sales and gross margin for FY07. |
| Last Financial Year End | |
| Reporting period |
30/07/05 |
| Indices | |
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Data and Analysis provided by Huntley Investment Information Pty Ltd
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