Super Retail Group Ltd (ASX: SUL) has reported a strong first-half result. Despite this, the Super Retail share price is trading around 2% lower at the time of writing in late morning trade.
Super Retail Group is a diversified retail conglomerate comprising well-known brands such as Supercheap Auto, Rebel Sport, Macpac and BCF (Boating Camping and Fishing).
Super Retail Group’s HY21 results
Super Retail Group delivered a record first-half, powered by solid revenue growth, improved gross margins and containment of costs.
Overall sales for the group came in at $1.78 billion, translating into a rise of 23.1% when compared to the prior corresponding period (pcp) of HY20. Importantly, like-for-like (LFL) sales growth was 23.8%.
Further, online sales growth greatly outperformed in-store sales, up a whopping 87.3%.
All of Super Retail’s brands delivered strong sales growth with the exception of Macpac, which dropped 5.3%. A snapshop of sales by brand can be found below.
On the back of higher gross margins, group EBITDA was up 94.9% to $311.4 million.
Super Retail Group’s balance sheet ended the half in great shape, having no bank debt and cash of $416.8 million.
Dividend confirmed
Super Retail’s board confirmed eligible shareholders will receive a fully franked interim dividend of 33 cents per share. This compares favourably to the pcp, as the group moved to cancel its HY20 interim dividend last year on the back of COVID-19.
The group also confirmed its intention to maintain a dividend payout policy of 55%-65% of underlying net profit after tax.
Combined with the FY20 final dividend of 19.5 cents per share, this puts Super Retail shares on a trailing dividend yield of around 4.6%.
Management’s commentary
Super Retail Group’s Managing Director and CEO, Anthony Heraghty commented on the result, saying:
It has been a positive start to the second half, with strong trading across all of our brands. We remain well positioned to benefit from positive consumer sentiment and elevated consumer demand in the domestic outdoor leisure and travel sectors. We do expect current levels of consumer spending will moderate when government stimulus is phased out and international travel restrictions ease.
My take
I view Super Retail Group as one of the strongest companies in the wider retailing sector. From the result, I was most impressed with the level of online sales growth.
Another ASX retailer to consider is Adairs Ltd (ASX: ADH), which also reported a record first-half result.
