JB Hi-Fi produces record first half but share price plunges

Despite tough retail conditions hurting the rest of the Australian industry, JB Hi-Fi (ASX: JBH) has produced a record half year profit.

The electronics retailer lifts its first-half profit 37.4 per cent to $151.7 million after a healthy Christmas sales performance across its expanded store network.

Revenue for the first six months surged by 41 per cent, up to $3.69 billion. This result reflects the group's November 2016 acquisition of The Good Guys.

JB Hi-Fi's strong result has defied the gloomy outlook for the retail industry which has hit the likes of Myer and Retail Food Group.

Chief executive of JB Hi-Fi, Richard Murra,y says he is pleased with the half year performance and says the company expects a full-year profit of between $235 and $240 million. That compares to 2017's full year profit of $172.4 million.

"It was another strong result for the JB Hi-Fi business in Australia, particularly through the important November and December periods," says Murray.

"We are pleased with the progress we have made at The Good Guys and are confident about the future opportunities for the group."

During the first half the company opened seven new JB Hi-Fi stores in Australia, and closed one in New Zealand. Two new The Good Guys stores were also opened.

Sales growth at the electronics retailer was largely driven by growth in communications, computers, audio, drones, and games hardware sales. In Australia sales grew 10.8 per cent to $2.48 billion.

The company lifted its interim dividend 14 cent to 86 cents, fully franked.

Shares in JB Hi-Fi suffered their largest intraday fall in three years, and at around 11.45am AEDT were down by 7.5 per cent to $25.98 as the results were below expectations and the company sacrificed its margins to remain competitive.

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Business News Australia