The Super Retail Group Ltd
(ASX: SUL) share price has risen 4% after announcing its FY23 result.
Super Retail is the business that owns Supercheap Auto, Rebel, BCF and Macpac.
FY23 result
This result is for the 12 months to 1 July 2023, here are some of the highlights:
- Total sales rose 7% to $3.8 billion
- Segment profit before tax (PBT) up 12% to $391 million
- Underlying net profit after tax (NPAT) rose 12% to $274 million
- Statutory net profit increased 9% to $263 million
- Final ordinary dividend of $0.44 per share
- Special dividend of $0.25 per share
None of the segments reported a sales decline for FY23 – Supercheap Auto like for like (LFL) sales rose 10%, Rebel sales rose 9%, BCF sales were flat, Macpac sales jumped 24% and total sales grew 8%.
In the second half of FY23, total LFL sales rose 6%, with each LFL segment sales growing by between 3% to 7%.
The business expanded its store network, with 24 new stores opened, and it successfully launched the BCF superstore format in Townsville and Kawana.
Good balance sheet
Super Retail reported that its total inventory declined by $11 million. Group inventory levels are expected to stabilise around current levels as a percentage of sales.
It had no drawn bank debt and finished with a $192 million cash balance.
The ASX retail share also announced that it had signed a long-term lease agreement with Goodman Group (ASX: GMG) for the construction and leasing of a new 65,000 square metre automated distribution centre in Victoria. Completion is expected in the first half of FY26. This will be funded by operating cash flows.
Outlook for the Super Retail share price
In the first six weeks of FY24, total sales were up 2% year on year. Supercheap Auto sales were up 4%, Rebel sales were up 1%, BCF sales were up 6% and Macpac sales were down 8%.
The Super Retail Managing Director and CEO Anthony Heraghty said:
“Sales growth has continued to moderate as the Group cycles strong sales in the prior year and rising interest rates and cost of living pressures dampen consumer spending. The Group has a solid track record of performance through the economic cycle. Our customer value proposition and low average ticket price means we are well positioned for a more value conscious consumer environment.
We will continue to execute our strategy by focusing on organic growth opportunities in our four core brands. In FY24 we are planning to open 24 new stores, continue the roll-out of the BCF Superstore and rebel rCX store formats and convert more Supercheap Auto stores to our next generation format. We also see a significant opportunity to leverage our customer loyalty base, including through the relaunch of the rebel loyalty program prior to Christmas.
Considering the economic pain we’re meant to be seeing, these numbers were impressive in my eyes. Amazingly, the Super Retail share price is higher than it was during COVID-19, so I don’t think this is the right time to invest. There are other ASX growth shares I’d rather buy.
