JB Hi-Fi Limited (JBH) serves up big HY dividend

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JB Hi-Fi Limited (ASX:JBH) shares will be a focal point for ASX investors today following the release of its 2020 half-year financial report.

About JB Hi-Fi

JB Hi-Fi is one of Australia’s largest device and home appliance retailers with its network of The Good Guys and JB Hi-Fi stores. JB Hi-Fi was established in 1974 by Mr. John Barbuto (JB), trading from a single store in East Keilor, Victoria.

Underlying Vs. Normalised Results

In the Rask video above, Owen explains the difference between ‘underlying’ or ‘normalised’ results and ‘statutory’ results. Knowing the difference between these two numbers is essential to understanding a financial report.

JB Hi-Fi’s Key Results

This period Last period Change
Revenue 3995.2 3843.7 3.94%
Profit 170.6 160.1 6.56%
Cash flow 284.5 280.3 1.5%
Dividends 99 91 8.79%

Source: JB Hifi announcements; author calculations. All figures in millions.

As can be seen above, JB Hi-Fi’s revenue came in at $3,995.2 million, up $151.5 million on the prior period.

At the bottom line, profit was $170.6 million, up $10.5 million. And on the cash flow statement, which is an important financial statement since it represents the underlying health of a business, operating cash flow was $284.5 million, up $4.2 million.

“We are pleased to report record sales and earnings in the first half, with JB HI-FI Australia and The Good Guys recording strong earnings growth,” JB Hi-Fi CEO Richard Murray said.

The company’s Australian JB Hi-Fi operations and The Good Guys stores reported comparable sales growth of 4.4% and 0.6%, respectively.

“In a competitive environment we remained focused on growing sales and market share in a sustainable manner whilst continuing to evolve the business,” Mr Murray added.

Importantly for income-seeking shareholders, JB Hi-Fi’s board declared an interim dividend of 99 cents per share, up 8.79%, fully franked. The dividend will be paid on March 6th, 2020.

What Happens Next?

Looking towards the future, JB Hi-Fi expects to report total sales of $7.33 billion for its full 2020 financial year, with $4.93 billion coming from its namesake Australian operations. The company also expects to report a profit result between $265 million and $270 million, before the effects of the accounting standard AASB 16 are applied.

“We are pleased with our performance in the important first half of FY20,” Murray concluded. “We are clear on our objectives for the next 6 months and are excited by the outlook for the business.”

JB Hifi shares were last seen trading at $40.10, giving the company a market capitalisation more than $4.5 billion.